How Addiction Impacts our Finances


When we hear the word addiction, whether it’s in a conversation or in a story on the news, we think of drugs, alcohol, gambling, or some other vice that “other” people in our world battle. We rarely think of addiction as something we personally deal with. I believe every person engages in some type of addictive behavior, often several, and the financial impact these can have are significant.

The biggest problem with an addiction is not recognizing that you have it. How can you know if you have an addiction? Actually, it’s quite simple. If you’ve ever faced a problem in your life that you could not fix, (who hasn’t?) there’s a good chance you’ve engaged in addictive behavior. In fact, the longer the problem goes unresolved, the more likely you are to develop harmful addictions to cope with the unresolved pain the problem causes.

All addictive behavior has at its root unresolved pain. The reasons for the pain are many. Some examples are harsh discipline from parents, not making the team, being rejected by a friend, dumped by a boyfriend or girlfriend, or worse, physical and emotional abuse, or experiencing divorce. Addictive behavior is initiated as a coping mechanism; a way of dealing with the unresolved pain we feel.

The problem with unresolved pain is that it doesn’t go away on its own. Time doesn’t heal ALL wounds, and the pain we feel will affect and influence our behavior. Because we can’t go around feeling bad all the time, we look for ways to cope with our pain.

The link between addiction and money?

Money is often at the center of addictive behavior. Today, we’re living in a time of great abundance. Most in the U.S. can easily provide for basic needs such as food, clothing, shelter. At the same time we have easy access to a wealth of goods and the available income or credit to allow us to buy many of the “wants” we desire. In many ways, this abundance is very good, except when money is used as a substitute for dealing with our real problems.  

A couple I met with years ago, Mary and John (not their real names) were struggling to find agreement in managing their money. They were continuously fighting over the way the money was spent. They both disagreed with how much the other was spending.

One specific area Mary was spending too much on was clothing. Although they agreed upon a certain amount for clothing, she would constantly go over, sometimes hundreds of dollars over the budget. After asking some probing questions, Mary revealed that she would often push her kids to buy designer clothes and more clothes than they initially asked for. She then said, “My kids hate going clothes shopping with me.”

After further probing Mary told me that when she was a teenager her father refused to spend money on name brand clothing for her. She felt embarrassed in front of her friends, a majority of whom wore name brand clothes. As she shared, it became clear that her overspending on clothing for her kids was a way to deal with the pain and embarrassment she felt as a teenage girl. Because she didn’t deal with her past pain properly she was unknowingly behaving in a way that was harmful to her family and finances.

There are perhaps countless examples like Mary’s. In some way, we all have used money as a substitute for dealing with the real issues and pain in our life. The problem with this approach is that it never fixes the real problem. More likely, the substitute money provides, although providing temporary relief to our pain, will only demand a greater and greater dose in order to continue to mask the unresolved pain.

Money is a revealer

Your spending reveals a lot about you! What you choose to spend money on doesn’t happen at random. Whether you’re aware of it or not, your spending decisions are influenced by your life experience, good and bad. It’s important that your decisions lead you to financial and emotional health.

People who don’t live by a financial plan (budget) are missing a vital component to experiencing a happy and satisfying life. A budget acts like a mirror allowing you to see the truth about your spending, and about you. It will show you when your spending is used as a substitute to your unresolved pain, which when dealt with properly can help you to find true healing.


Addictive behavior is not only bad for you, it’s bad for your wallet. It’s not unusual to be unaware of unresolved pain that causes addictive behavior, especially if the event happened in your childhood. By being intentional with your money, how you spend it, what you spend it on, and why you spend it, you can identify the negative behaviors in your life, begin dealing with the root causes and find real healing.