Is shopaholism a big contributor to BK?

[JackBondLove]

I was thinking about the times that some friends and colleagues of mine had cut up their wives' CC's because they felt that they were spending too much. (I had one friend whose wife would bring home a new article of clothing EVERY WEEKDAY, stopping at the mall on the way home from work!) It seems that had these husbands not done so, there may have been some financial problems that - who knows - may have ended up in a BK as well.

I guess that the question that I am getting at is if folks here feel that had they - or others in BK - not spend so much on non-essential stuff, or let's say, spent more in line of what folks from their income bracket would spend, etc., then BK would not have resulted. Or do you think that shopaholism by and large only affects folks that aren't in danger of BK?

NOTE: I realize that my anecdotes here seem to be sexually slanted, but I've only known one case of a man whose wife had to put HIM on a financial diet (he always liked buying newer and faster bass boats and hunting rifles, etc. - he was NOT a metrosexual. )

[AngelinaCatHub]

Jack, a good thread point. My eldest daughter is a shopaholic. She buys Barbie dolls, then tapes, then DVDs and if my youngest gets an item, she gets a better or bigger of same. She cannot do without "things" and then does not use them.

My brother's ex wife has shoes galore in boxes with the tags still on. Yes there is a sickness like this.

Speaking for myself, when we had some big bucks, I would purchase any toy that I saw (man type toys like battery chargers and TVs stuff). Now when I get my yearly pay out of our Trust retirement, I actually enjoy paying my taxes and HSA account for wife and the like. The spending feeling is fun, such as the cracking of the first beer is. After the fourth beer, it is detrimental and after the over spending, it become less fun when the bill or the money runs out. It is what we all fight withing our "new start". Habits are very hard to stop. Thank God, I never have smoked and I do not do hard liquor. Reason: I am an addiction personality. I do like alcohol, but I do well to control this. I do like spending. I have to control this. Both are self damaging. 'Hub

[JackBondLove]

My brother's ex wife has shoes galore in boxes with the tags still on. Yes there is a sickness like this.

An old girlfriend of mine had this shoe rack that fit on a door - ALL THE WAY DOWN! When loaded, this thing was so heavy that the door would sag and scrape against the floor! She had them on 2 doors, for a total of about 100 pairs of shoes there, plus a sophisticated, multi-story rack in the closet, and then of course, nothing but shoes under the bed. For all the 200+ pairs or so that she had, it seemed like she always wore the same pair when we went out on the town (but then again, when I was with her, I wasn't interesting in looking at that.)

Now that I've stopped wearing boots, I think I only have 5 pairs of new shoes (I like to keep old shoes that have been superseded by new replacements to wear when it's raining, etc.), with one pair being flip flops and the other being ski boots! OK, maybe if I need to look good for a wedding/funeral (the only times I ever wear a tie!), I need to get a pair of dress shoes. But that's it!

[mountanddo]

Is shopaholism a big contributor to BK?

Well....of course it is. I would say it is the main contributor of Bankruptcy. If everyone paid cash for what they needed and lived within their means then credit cards wouldn't be necessary. There are not a lot of people that use credit cards to pay for only things that they need like food, gas, shelter. There really is no need for that. But then you knew that didn't you ;)

[AngelinaCatHub]

An old girlfriend of mine had this shoe rack that fit on a door - ALL THE WAY DOWN! When loaded, this thing was so heavy that the door would sag and scrape against the floor! She had them on 2 doors, for a total of about 100 pairs of shoes there, plus a sophisticated, multi-story rack in the closet, and then of course, nothing but shoes under the bed. For all the 200+ pairs or so that she had, it seemed like she always wore the same pair when we went out on the town (but then again, when I was with her, I wasn't interesting in looking at that.)

Now that I've stopped wearing boots, I think I only have 5 pairs of new shoes (I like to keep old shoes that have been superseded by new replacements to wear when it's raining, etc.), with one pair being flip flops and the other being ski boots! OK, maybe if I need to look good for a wedding/funeral (the only times I ever wear a tie!), I need to get a pair of dress shoes. But that's it!

You got it friend. The sickness needs not be shoes but anything. Since my retirement I have one tie. I used it for every hearing I had during my multi law suits by my now dead adversary.

The aim of your thread though is what takes over our rational mind that makes us "FEEL GOOD". That could be anything. It is called a habit, compulsions, addictions, and other things that a person knows is bad for them but the yearning feels so good. I think we all have this to a degree. Hoarding is one thing that I have addressed with a good friend who is losing her azz yet cannot bring herself to a yard sale. She cannot buy anything, but she cannot part with anything no matter what junk it is.

So, your thread is a real thinking machine as I know we all have this stigma. More or less, it can be very destructive, or beneficial. Just depends on the side effects such as how much damage it causes in several ways. 'Hub

[Drazil65]

I would have to say no in our case. We actually had very minimal charges for "things" and had been on the Dave Ramsey debt snowball for about 2 years and had paid off 2/3 of our outstanding debt. We had a tenant in our out of state rental that covered that nicely for over 4 years (we transferred to NC for DH job), DH had been working in this job for about 2.5 yrs and we decided to build a house here and did (not a huge house only 2300 sq ft) in a great location in a golf tourist area, with instant equity of about $60,000 (DH was the builder on the house). One month after we moved in DH was laid off from his job for the first time in his life, found a job in another city and was laid off fro that project 6 months later (after commuting on weekends for 6 months). We then made the decision we could not go through another lay off and he went back to school for another degree but this time in healthcare. We made the choice to do this knowing we would have to spend the remainder of our funds on school (he already has a 4 yr degree and we could not get any kind of financial aid or help). Its been a very tough decision and with me the only one working (this program has been full time and an excelerated program continually with clinicals including through this last summer) but we knew it was an investment in our future. We ended up using not only our savings during all this but also using CC to help to pay everyone and supplement our needs until we realized that was really stupid. We were so afraid of not paying the creditors that we were borrowing from a sigloc (that we had not used in over 2 yrs at that point) to pay everyone.

2 lay offs in less than a year does a lot of damage to your emergency fund/savings account. Couple that with our tenant moving after he was transferred this past September and that house is about $30,000 underwater. Tried to reach out to BOA for the entire year of 2011 to at least modify when we did have a tenant, no go they would not even talk to us until "we were at least 90 days behind", really? We did modify our house here and its been on the market since last June, no offers, too much inventory here. We will stay and pay until DH graduates in May and gets his license after July then we relocate. We still have equity but trustee cannot touch house as DH only one filing (everything was in his name) so we will live here until we need to go.

So a combination of things for us put us here but shopping continually was not one of them.

[bcohen]

Although there may very well be some people who are driven to BK by chronic overspending, "addiction" to shopping, etc, I believe that this idea of "irresponsibility" as the leading cause of bankruptcy is a myth put forth by the lending industry to coerce people into paying long after it is no longer in their interest to keep doing so. Are there people who accumulate too much debt and have to file BK because they're "addicted" to buying clothes, shoes, vehicles, electronics, or other luxury items that they don't need? Of course. But to say that these people are the majority--or even a large percentage of BK filers--is absurd.

Everyone that I know who has filed for bankruptcy has done so because of job loss, medical bills, or divorce--not because of chronic overspending. Likewise, although I have not filed yet (and may never file if I don't get sued) the reason I had to quit paying my debts was because of multiple job losses in a 2-year period followed by having my hours cut back in March of 2009. I quit paying my debts at that point because I needed the money to pay for necessary living expenses, and also was worried about losing my job, which I eventually did 5 months later.

I know that when I did have credit cards, I never used them to buy extravagent stuff such as clothes, shoes, jewelry, expensive electronics, or anything like that. In fact, most of my clothes are 8 to 10 years old, I buy cheap K-Mart shoes and use them until they're worn out, I don't own any jewelry, and I bought my TV, desktop computer, and laptop used from yard sales. Most of my credit card debt comes from buying tools and equipment for my job, paying for food, fuel, and medicine, and having to let the balances rise while I was unemployed or underemployed and still needed these things to live.

This is the exact same experience mirrored by several of my friends who I used to work with, who were also affected by job losses in the industry. The only difference is that they faced lawsuits and threats of liens/garnishment because they had houses and vehicles titled in their name; I live in a rental apartment, don't own a car, and have not been sued.

[Diesel73L]

I know that when I did have credit cards, I never used them to buy extravagent stuff such as clothes, shoes, jewelry, expensive electronics, or anything like that. In fact, most of my clothes are 8 to 10 years old, I buy cheap K-Mart shoes and use them until they're worn out, I don't own any jewelry, and I bought my TV, desktop computer, and laptop used from yard sales. Most of my credit card debt comes from buying tools and equipment for my job, paying for food, fuel, and medicine, and having to let the balances rise while I was unemployed or underemployed and still needed these things to live.

In our case I look at it as an investment gone bad. We graduated from college in 2006, got decent entry level jobs right away, bought a house shortly after that, and started a family. We used credit to buy the things we needed for the house-no extravagances, but every time we swiped the card for something we needed for the house (like a couch for the living room, materials for a small DIY project, or a mattress and boxspring set) we reasoned "our incomes will rise in the future-it will be OK." Fast forward to 2010. I was still stuck in the entry level job at basically the same entry level salary, but I hung on for dear life at that point because at that point I was lucky to have any job. My wife had put herself through graduate school and though she incurred a total student loan payment (undergrad and graduate combined) of $460/month, she also got an $8000/year bump in salary. Keeping up with our minimum payments was beginning to become a challenge because the money that we had thought would be there just wasn't. Fast forward to today-we have no disposable income-groceries, gas, and pretty much any expense you could think of goes on the cards because in order to keep up with the minimums, mortgage, student loans, and truck payment there isn't anything left. We gambled on the American Dream (a home of our own and a family) and lost. I'd like to invite the folks who think that the majority of filers are addicted to shopping to my house to see the jeans and boots I've been wearing since college, the endtables I fished out of the garbage, and the old TV, microwave, and lawn tractor I got for free on Craigslist-I wonder how those got us into credit card debt?

[keepsmiling]

We have an 1100 sq ft house.
I drive an ancient beater.
I shop exclusively at thrift shops and garage sales.
I extravagantly get my hair cut once a year.
We got into debt over health insurance. Couldn't afford it, dh refused to be without it because we'd be bk if something happened. Kept (and keep) hoping a job would turn up that included it.
Thankfully nothing happened but we are now bk due to it costing such a ridiculously huge chunk of our income. Wound up using the home equity and cc's to pay for either that or the basics we coudn't buy due to paying for it.
Yeah, backwards I know. Life is funny like that.
Such extravagance.

[lotsahats]

Although there may very well be some people who are driven to BK by chronic overspending, "addiction" to shopping, etc, I believe that this idea of "irresponsibility" as the leading cause of bankruptcy is a myth put forth by the lending industry to coerce people into paying long after it is no longer in their interest to keep doing so. Are there people who accumulate too much debt and have to file BK because they're "addicted" to buying clothes, shoes, vehicles, electronics, or other luxury items that they don't need? Of course. But to say that these people are the majority--or even a large percentage of BK filers--is absurd.

Everyone that I know who has filed for bankruptcy has done so because of job loss, medical bills, or divorce--not because of chronic overspending. Likewise, although I have not filed yet (and may never file if I don't get sued) the reason I had to quit paying my debts was because of multiple job losses in a 2-year period followed by having my hours cut back in March of 2009. I quit paying my debts at that point because I needed the money to pay for necessary living expenses, and also was worried about losing my job, which I eventually did 5 months later.

I know that when I did have credit cards, I never used them to buy extravagent stuff such as clothes, shoes, jewelry, expensive electronics, or anything like that. In fact, most of my clothes are 8 to 10 years old, I buy cheap K-Mart shoes and use them until they're worn out, I don't own any jewelry, and I bought my TV, desktop computer, and laptop used from yard sales. Most of my credit card debt comes from buying tools and equipment for my job, paying for food, fuel, and medicine, and having to let the balances rise while I was unemployed or underemployed and still needed these things to live.

This is the exact same experience mirrored by several of my friends who I used to work with, who were also affected by job losses in the industry. The only difference is that they faced lawsuits and threats of liens/garnishment because they had houses and vehicles titled in their name; I live in a rental apartment, don't own a car, and have not been sued.

Thank you!!! The majority of us are not shopaholics.

Job loss is what drove us into bankruptcy. Three years ago, my husband and I were both working, and living within our means. And then, I got pregnant, and had to be put on bedrest in my 2nd trimester. Then, my husband lost his job shortly after that. We lived off our credit cards for six months, until my husband was able to find work, again. We had some savings, but we used it to pay the minimum on the credit card, and anything else that we couldn't use the card for.

And, the kicker is that was three years ago! In the three years since, we've had a steady income, but have been unable to pay the cards off, because of high interest rates, so we ended up robbing Peter to pay Paul. Eventually, we had to come to terms with the fact that we were fighting a losing battle.

[IamOld]

Is shopaholism a big contributor to BK?

Well....of course it is. I would say it is the main contributor of Bankruptcy. If everyone paid cash for what they needed and lived within their means then credit cards wouldn't be necessary. There are not a lot of people that use credit cards to pay for only things that they need like food, gas, shelter. There really is no need for that. But then you knew that didn't you ;)

Actually the #1 cause of BK in the US is medical debt; I'd say along with job loss/income loss...sure I think many of us here - me included- overspent, BUT had we not lost jobs...we likely not have been here.

[HHM]

Overspending is symptom, but not a cause. Unfortunately, most of the middle class live right on the edge with there income; so it doesn't take much to push them over the edge. So, although a percentage of filers do over spend, it is rarely the cause of the BK, but more of a symptom of financial distress. The BK is usually brought about by a decrease income.

[lillymarlene]

Overspending is symptom, but not a cause. Unfortunately, most of the middle class live right on the edge with there income; so it doesn't take much to push them over the edge. So, although a percentage of filers do over spend, it is rarely the cause of the BK, but more of a symptom of financial distress. The BK is usually brought about by a decrease income.

Thank you, this is so true. I had credit cards since I was 18 years old (I'm 59 now) and I really didn't spend all that wildly. Though, a lot of my trouble was I used cards for just about everything over the years. For example, during the 80's I decided to complete my college education, and each semester I'd put my tuition, books and supplies on a card. I'm also a human yo-yo as far as body weight goes, and of course I needed clothing for my various sizes. From year 2000 until 2010, I put business expenses, even business rent, inventory, and supplies on credit cards. Of course I kept thinking things would just get better.:-)Then the last 5 years that I used the cards, it seemed it was too often for basic neccessities: medical/dental bills, groceries, clothing and utilities. I also played the cash advance and balance transfer game, whenever I felt I was running a little short.

My biggest problem may have been that much of my spending was simply mindless...I didn't think enough about where these $$$'s I was spending were going to come from. So for now, I'm actually grateful for this forced budgeting of my Chapter 13. I never want to have credit cards like that or live the way I did pre BK again.

[lillymarlene]

Just wanted to add from reading the other posts, it sure is not all women that are shopaholics. My Dad, who passed away 5 years ago, just loved to shop. He especially loved grocery stores, and coupons. He'd run around with his trunk filled with non-perishables, giving the excess away to friends and neighbors. My (brother who lived with him) was forever saying that he didn't need 18 packages of Froot Loops. LOL

My father and I sometimes worked together in the family business, and during the last years of his life, he would often hand me a stack of his credit cards, and ask me to find one with enough "room" so we could pay a vendor (who was also owed.) It was so sad, he was in great financial distress. To many people of that generation, bankruptcy was never an option.

[shark66]

The BK is usually brought about by a decrease income.

Have you been doing my taxes, HHM? LOL...

After moving several states away into a brand new custom-built home, I was given a choice of taking a $50K/year pay cut and keeping my benefits, or keeping the income until further notice and forgetting everything about benefits...

With a family of five (some of us with chronic ailments) it really was a no-brainer. I kept the benefits and swallowed the cut, but it was just a matter of time at that point...BK was in the cards, although it has taken me a couple of years to actually come to that conclusion...stupid old me...

I was never a shopaholic. Got my first credit card in my mid-30s and was never hooked on credit the way many people are. Could I have been more frugal during the higher-income years? Absolutely. In the long run, it really wouldn't have changed anything, though...

Good luck to us all.