Seven deadly money disorders: financial incest

MoneySense writer Julie Cazzin spent five days at a workshop for people with severe money disorders in Nashville, Tenn. There she discovered the seven deadly money disorders.

Financial incest happens when adults force their children to take on an unreasonable, inappropriate role in their finances or relationship. It often happens when a parent doesn’t feel she has a satisfying relationship with her spouse or partner. Examples include using a child as a go-between in arguments about money (common in divorce), putting pressure on a child to work excessively to pay household bills, or expecting a child to keep a financial secret from another family member.

We probably all know children who take a caretaking role in the family. These children often develop a strong sense of financial responsibility for the rest of their lives. Typically, it’s a sign that the family is overwhelmed and doesn’t have an adequate support system. Like other forms of abuse, adults who experienced financial incest when they were young are more likely to reenact it with their own children. It can lead a child to develop a troubled relationship with money that might show up in adulthood as insecurity, overspending, workaholism or another money disorder.

Ramona Reed certainly recognizes herself and her family in that picture. Feeling that she was the most resilient of all her siblings, she has been a caretaker for her parents, brothers and sisters in one way or another for all her adult life. Last year, for instance, she discovered that her 85-year-old parents were eating from the dollar menu at McDonald’s seven days a week, so she drove 1,000 km across the country to stock up their freezer with healthy food. She ended up staying for three months to do repairs and maintenance on the old family farmhouse.

“I know I learned all of this behaviour from my parents,” says Reed. “I remember dad telling us while we were growing up that we had to take care of each other. He even assigned us caretaking tasks. I was No. 6 and had to take care of No. 8, my little brother. I had to feed him, bathe him and make sure he got to school on time. My mother was a manic depressive and hardly ever moved from her chair.”

These days, Reed can’t resist helping others — even when she doesn’t have to. “I think my childhood experiences are at the root of how I view money,” says Reed “I use money to take care of people and then I overspend on myself to fill the loneliness of not having kids of my own. It’s lead to the financial behaviour that’s now destroying my marriage.”

Overcoming financial incest
If you find yourself involving your kids too much in the family finances or relying on them as you would on a spouse, it’s a sign that your marriage is under extreme stress. The solution is to take your anxiety, frustration, and financial stress to a therapist or adviser and avoid involving your children in issues that you need to resolve yourself. You should admit to your child that you were wrong to put so much responsibility on their shoulders at such a young age. Then ask a friend, therapist or planner to keep an eye on your behaviour and have them hold you accountable.

At the Onsite workshop in Nashville, I watched therapeutic exercises designed to help those with severe money issues. I witnessed role-playing, meditation and behind-closed-doors group therapy, all of it designed to uncover the hidden motivations behind the money habits of the participants. One powerful session involved a ‘What if’ exercise that helped clients prioritize their goals. The participants were asked ‘What dream or longing will you leave unfulfilled?’ Melissa Hammel, a certified financial planner and group leader at the workshop, explains the thinking behind the exercise: “Your answer reveals your true passions — and if you can grab a hold of those, then you will follow a financial plan to get there, because that’s what rings true to your heart.”

In another Onsite session, the participants were told that they have only 24 hours to live. They were asked to name their unfulfilled dreams and goals. Ramona Reed’s answer was revealing. “I remembered how I had always wanted to open my own art studio,” she told me. “I’ve written and illustrated dozens of children’s stories, just for myself, of course. And my attic is full of paintings that I did in my 20s. But afraid I had no talent, I just gave it all up. I think now’s the time to take out those paints and easels and get a little gallery of my own.”

As I watched the diverse group of participants, most of them quite wealthy, all of them damaged in some way, I began to realize that most money disorders aren’t really about money at all. They are the symptoms — not the disease. A lot of personal finance advice just addresses those surface symptoms, while leaving the underlying problem untreated.

There are a lot of factors that contribute to financial success: you need a steady source of income, you need to know the personal finance basics, you need to know where you want to be, and you need a plan to get there. But even with all these things in place, you may find that you can’t make any progress. If that’s the case, it could be that some of your most deeply held financial beliefs — your money “truths” — aren’t really true.

To succeed, you need to identify those truths and work your way back to discover where they came from. Sometimes it’s a relatively easy process. Other times it’s brutally difficult. The first step is always identifying the problem, though, and I hope that I’ve been able to help you do that. Because once you understand your motivations, all the other factors — staying out of debt, sticking to a savings plan, spending within your means, enjoying a heathy financial relationship with your spouse — will start to fall into place.

You’ll achieve higher levels of satisfaction in all of your life goals and achievements. It takes time, effort, and yes, sometimes money, to delve into what’s really at the root of your financial beliefs and habits. But trust me. It will be the best investment you’ve ever made.