The Dangers of Financial Bulimia

As a Certified Financial Counselor, I see the dangers of financial bulimia firsthand. What is financial bulimia? It’s the money equivalent of binge-and-purge behavior. Here’s what it looks like:

Your spending is out of control, usually on credit cards. You’re not saving or investing for the future, tracking your net worth, or giving your personal finances the attention they deserve.

Then, you look at your bank balance or the credit card bill arrives.

You feel sick at what you see. It’s worse than you thought. You vow to change right now! You create a super-strict budget to punish yourself for your financial sins, and remove your credit cards from your wallet. You allocate zero dollars for fun in your plan because you don’t deserve it.

Then, after a few days, weeks, or months, you grow weary of the restraint.

Your “helpful” budget now feels like a suffocating straight jacket. You’re tired of never having fun. “Screw it! This is no way to live!” you say, as you grab your credit card out of its hiding place and head out for a night on the town or a shopping spree at your favorite store.

Sound familiar? I encounter clients who repeat this binge-and-purge pattern of financial bulimia on a constant loop. And it’s not just financially unhealthy, it’s emotionally unhealthy.

The Dangers of Financial Bulimia

It Perpetuates the Money Shame Cycle

The problem with financial bulimia, swinging between the extremes of out-of-control spending to extreme frugality, is the perpetuation of the money shame cycle.

When you make financial mistakes, you beat yourself up over them. This obviously doesn’t make you feel good, so you want to avoid the problem. And you certainly don’t want to tell anyone else about it, even if that someone can help you.

Because you’re not seeking the resources you need to solve the problem, you make more financial mistakes, and the cycle repeats. You might say to yourself, “I know what I should do: save money, spend less than I earn, and minimize my debt! Why can’t I make myself do it?!”

Understanding the emotional side of money is key to breaking the cycle of money shame. Our thoughts, emotions, and money stories from the past drive our behavior with money. If we don’t know how to uncover and fix our “money blueprint” we’ll have a very hard time achieving lasting Financial Dignity®.

You Don’t Learn How to Be Financially Healthy

When you alternate between spending sprees and extreme budgets, you don’t learn what healthy financial behaviors look like. I think this is why I have so many clients who have completed Dave Ramsey’s Financial Peace University, but haven’t stuck with it for the long term.

It’s very similar to healthy eating. If you’ve been binging on sugar for years, but then decide to embark on the Keto Diet, you only experience the extremes of way too much sugar and no sugar at all. You never learn how to eat sugar in moderation; it’s all or nothing.

With financial bulimia it’s the same thing. You don’t learn how to have a healthy relationship with your money. You don’t learn how to have portion-controlled fun with your finances while working on your long-term savings goals.

The best way to get physically healthy is to start replacing unhealthy food and habits with healthier ones, one or two at a time, so it doesn’t feel hard. It’s also the best way to get financially healthy!

When I’m working with my coaching clients, they usually have only 2 or 3 things to do in between session with me. Sometimes my clients want to do more or make bigger changes faster. I usually discourage them from doing so. Why? Because I don’t want them to burn out and backslide. And after working with me for six months, my clients are usually amazed at their progress because the changes didn’t seem hard.

Through this slow and steady process, my clients learn a healthy, balanced approach to managing their finances. One that’s easy to maintain, so they never feel pulled back into either extreme of excessive spending or austere budget plans.

If you’ve tried restrictive budgets in the past and you’ve failed to stick with them, it’s honestly not your fault! They set you up for a cycle of binge-and-purge financial behaviors and perpetuate feelings of money shame.

Ready to leave the dangers of financial bulimia behind? Watch my FREE training:

The 5 Steps to Lasting Financial Dignity®