The Relationship with Money and Material Objects

Money and material objects are omnipresent throughout the diary. This is not surprising in a testimony about addictive buying, in which the author describes a person economic behavior in great detail. However, the symbolic meanings of products and money, which are sometimes explicitly mentioned and other times are implicit in the author’s interpretations of the buying episodes and other life events, reveal some deep-rooted materialistic values. For example:

I admit now that I dreamt of one day shopping in good shops like my big boss….haha… A friend (female) before she  got married, who was always dressed in the latest fashion, drew my attention a lot, like the boys who were well dressed. I was mistaken, but nothing can be done about it.

Although, at times, she seems to question the importance of money and material objects, these values constantly emerge. For example, an important motive for worry and anxiety is the damage that her buying behavior has caused to her husband and children. On one occasion, she mentions the possible emotional damage caused by her permanent state of anxiety and irritability; she also considers at one point that her spending habits have not set a good example for her children, but most of the references to this issue refer to the pain she feels because the accumulated debts now prevent her from buying things:

I see people with their flat all set up buy a car, things for their child, and I think how I have ruined my family… It takes a great effort to acknowledge these feelings, like seeing a friend who has kept his money under control and has many more things.

What is outstanding throughout the diary is the degree to which family relationships and friendship revolve around the purchase of products, going to shops as a leisure activity, and gifts, both in the form of material objects and money. One fact that illustrates this centrality is the friendship maintained for years with another buying addict from whom she frequently receives money and gifts.

Money, material objects and presents in family relationships and friendships.

What did I spend money on? On everything and on everyone.

It can repeatedly be seen that purchases, material objects, and money have always been and are present as means of communication and relating, both in family relationships and in friendships. Gifts of articles of clothing and other products to various family members and friends are frequent, not only on special occasions, but as a routine that is carried out either by buying or by paying for what others buy. For example:

Last week I went to get clothes for my nephew, I went with my niece… I think that they have forgotten about that affair of them buying me the suit, but it doesn’t matter.

At times, money and presents fulfill a reciprocal function: They are a way of paying for, or returning favors.

One day, I had a quarrel with my nephew, the one I always said was my child, and the relationship no longer feels the same to me. I feel sorry about the affection and about everything I spent on them. Of course, you must understand that they now have a good friend that gives them a lot, and an uncle without children who is giving them a lot of money, you can see it in their clothes and everything.

The inappropriate nature of my relationships with certain friends, based on excessive gifts, becomes evident to a good friend, someone from outside the family.

Everything I gave them didn’t seem right to my friend. When that happened, I was often with the wife of one of these friends. They had a daughter whom I was very fond of. As they didn’t have much money I always bought things for the girl, shoes, a dress, a jacket. My friend was right, it was too much. For my birthday, I went to the shop and I really took advantage of this friend, because he pays by installments. I bought a jacket, a skirt, a jersey, a jacket with a polo shirt, and, to round it off, two pairs of pants because last year’s pants are no use to me.

In fact, this friend’s gifts include clothes and other products for the husband and children. These family values, beliefs, and customs with respect to money and material objects, in short, the predominant material culture in this family generates an atmosphere of permissiveness that favors the development of addictive buying.

The behavior of both women during these visits reminds one of a relationship with a child, a nephew or niece, or a grandchild, because each time there is a visit, there is always, or nearly always, “pocket money”. Last Monday, my mother came to bring me prescriptions, well, I was waiting to see if she would give me something… she gave me five hundreds.

I’m going to draw a five hundreds for today or tomorrow because my nephews and nieces are coming. I draw a thousand because there are two of them and they’ll spend it on the machines, if not, I’d only take five hundred.

Family Background.

With regard to the influence of family background, three possible interrelated mechanisms are mentioned: genetic heritage, learning and the constitution of his/her personality, and emotional imbalance.

I ask myself now whether my problem is inherited, or whether it’s what I’ve seen, or whether I’m a dissolute person. Because my older brothers aren’t like that. The women are, though, they lied about shopping, they always said it cost less than it had; well, not when buying food; then, they said it had cost a bit more. The presence of two drinkers and an excessive spender in the family is posed as a possible genetic factor and also as a problem that could have led to her problems of emotional instability.

Reckless spending and the repeated recourse to loans to cover debts were constant in the family economy, even before he / her serious problems with buying started. This, and the habit of deceit about spending, clearly seems to be behavior traits learnt in his / her parents’ home.

I’ve just remembered my mother paying the bills in installments and in order to pay the rent for where we lived…, they never had money… So I think that I never saw anything that would have served as a good foundation… While I lived with them, my parents never had any savings … My mother had the habit that, when she bought something a little expensive, she wouldn’t tell the truth to father, she would say it had cost a little less.

With regard to her personality, the author is torn between the possibility of having inherited an inadequate personality—coherent with her behavior of selfish buying that harms those closest to her, and which generates a strong feeling of guilt—and the idea of being a victim during her childhood and youth of a damaging family setting that has led to pronounced emotional instability, which, in turn, has produced a loss of control over her behavior.

I don’t want to seem like a victim, but at the rate I’m going, I’m doing badly. I have the sensation that I’m wrong in the head, or that I’m a pig, like my parents and my little brother. Life has given me a lot of upsets and I’m paying dearly for them; what hurts most is my family member.

Crisis in family relationship.

A pattern frequently emerges in descriptions of cases of addiction to buying that can also be observed in this diary: Diverse psychological problems and inappropriate buying and spending habits are the background, or the antecedents, of addiction to buying. But that behavior pattern is habitually triggered in all its severity following a life crisis.

In this case, the crisis was caused by her perception of social isolation upon the birth of her second child and aggravated by the prior estrangement from her parental family and her work milieu. The qualitative change in his / her economic behavior materialized in the start of a private parallel reality of credit and purchases, unknown to her husband, in which there were no limits.

A friend (lady) of my – Helen was left very much alone after the birth of my second child, because of a quarrel with her parents a year before, the row with her brother, then stopping work, getting cut off from my friend. As she didn’t have anyone to leave the child with, that put an end to going out and dinners. And not only that, the relationship with our group of friends was nearly completely broken, because we stopped going out, even for a walk. That’s when she started to feel bad, lonely, with a complex, she had bad headaches and she didn’t have anyone around. Leaving the hospital was terrible… After that, Helen started to go very fast, because she think she was going slowly at first.

In the eyes of the diary’s author, her husband did not provide the help she needed at the time, and that was the determining factor in the start of the buying spiral. Helen also have to offer her opinion about her husband, because she think that if he had understood her a little, perhaps some of that could have been avoided… In November, he had a farewell dinner for a friend; well, he went to the dinner, it cost him X amount of money, Helen don’t know how much, but he spent more that night than he had ever spent on his wife and children, all in one go. That hurts a lot when one feels lonely. Well, Helen didn’t stop him from going; instead she said he should find a little time for both. That’s where she thinks the problem started, because he was earning and Helen was spending.

The author goes on at great length in her description of the lack of consideration, or even abandonment, in her husband’s behavior. Although at no point does she explicitly say so in her diary, in various passages, the reader gets the impression that taking revenge on her envy and anger on seeing couples and husbands and wives with their children, and me alone. Of course, she continued spending and buying.

In short, Helen proposes possible genetic causes, and she affirms the role of learning or socialization in consumption and spending, the role of low self-esteem, and the importance of a life crisis in triggering a spiral of buying and spending out of all control. After analyzes her behavior and its motives, besides the above-mentioned factors, she suggests the possibility that her will is another factor that has guided her behavior when she wonders whether she has inherited an inadequate personality and distinguishes between the motivations for confronting her low self-esteem and “buying for the sake of buying.”

Addiction to buying, also known as compulsive buying constitutes a compulsive pattern of acquisition of products that is analogous to drug addictions. Based on market research and prevalence studies estimate the scope of the problem in different countries at between 1% and 7% of the population.

However, in western consumer societies, a growing tendency has been noted of buying, which is impulsive, recreational, and compensatory for negative emotional states, and the percentage of consumers who are prone or vulnerable to addiction is estimated to be between 19.5% and 25% of the population. These figures indicate the social relevance of this phenomenon, which is not limited to a small percentage of subjects suffering from a mental disorder, but instead reflects a socio-cultural tendency whose medium- and long-term consequences should be considered.

The definitions of addiction to buying include as key characteristics a perceived difficulty in controlling one’s impulsive and excessive buying behavior, its chronic nature, its functions of emotional repair and of symbolically improving self-esteem, the development of a strong psychological dependence, and its damaging effects at the economic, psychological, and family levels. Similarly, they point to learning processes as factors that explain the difficulty to control the behavior and its repetitive nature, and they acknowledge vulnerability factors of a cultural, social, situational, and psychobiological nature.

The above-mentioned perception of difficulty to control, linked to the highly impulsive nature of buying, has led to different and, at times, contrary interpretations of the nature of addictive buying, even going so far as to indicate that addictive buying can present characteristics of voluntary behavior. This latter point of view has also been defended by other authors in the field of addiction to chemical substances (Megías et al., 2000; Peele, 1987) and of impulsive behavior in general (Baumeister, Heatherton, & Tice, 1994). These different conceptualizations are directly related to the different conceptual models of addictive behavior and to the issue of addicts’ personal responsibility for their own behavior and aspects.

Many factors affect the exchange rates and interest rates of currencies, such as political events, financial forecasts, economic stability, and inflation management. But the underlying theory remains the same. Countries that need to attract deposits generally do so with higher interest rates than countries that are doing better economically. Countries that are doing fine tend to have stronger currencies.

When It Makes Sense

Borrowing in a foreign currency makes sense only in a few circumstances. One such instance is when you don’t require the maximum debt allowed by the bank; when the bank allows you to borrow 80 percent of the property’s cost, but you borrow only 50 percent. That allows breathing room for currency and interest fluctuations.

Another instance is when you plan on repaying the borrowed amount using the same currency; using your Singapore dollar salary, for example. Also, borrowing a much smaller amount than a home mortgage is a safer circumstance.

The first golden rule when playing this game is not to borrow the maximum and to always match the borrowing currency with your planned repayment currency, if possible. The second golden rule is not to gamble on currency risk with borrowed money unless you can afford to lose it.

Borrower Beware

Financial advisers will show you past records and statistics to demonstrate that the fallout from this risk rarely happens. They will tell you that since you can get interest on the callable amount, you are adequately protected because it is money that you still own. They will tell you that when you see currencies moving in the wrong direction, you can switch back to the other currency.

I will tell you that they are usually misleading you. Often, they will not even be familiar with the basic theory of interest rates because they are blinded by the prospect of high commissions at the expense of ignoring the risks.

Many financial advisers won’t tell you that every time you switch currencies, they will make a significant profit on the bid or offer-spread of the currencies.

They won’t tell you the statistics that show how many people have been financially crippled by taking currency risks with which they are not familiar. They won’t tell you that you should never gamble on currencies with borrowed money, because you risk having the bank take your house away.

But I will tell you. As you can see, I take my job as their archenemy very seriously.

My current rant is against financial advisers who suggest borrowing in a currency with a low interest rate to purchase a home in a different country. That can work, but most people don’t understand the real risk.

For instance, some would find the appeal it purchasing a house in New Zealand using the Singapore dollar, which has a much lower interest rate than the New Zealand dollar. But there is danger in gambling with foreign currency using borrowed money.

Let’s say the new house will cost NZ$100,000. The bank will lend a maximum 80 percent of the cost. The bank will lend it in either Singapore dollar at an interest rate of 2 percent, or NZ dollars at an interest rate of 10 percent. But financial advisers often fail to tell you this critical point: based on pure interest rate theory, the NZ dollar will depreciate against the Singapore dollar by the differential of the interest rates of 2 per cent and 10 percent.

Of course, currencies and interest rates fluctuate for many reasons. The point is that if the bank has loaned you the maximum of NZ$80,000 in z. foreign currency equivalent whose value then rises, the bank will consider you to be in debt for more than NZ$80,000. A friend of mine in this situation, whose loan is far greater than NZ$80,000, recently received notice — a “margin call” — from her bank requesting a further S$175,000 to make up the difference, and she is now sick with worry.

And be aware. If you rely on NZ-dollar rentals from your new home to pay your Singapore-dollar mortgage, you are back in the currency risk trap. New Zealand dollar rental payments can in theory depreciate against the Singapore dollar over time, meaning that you risk receiving less when the rental is converted to Singapore dollars—and thus bringing in less to service your Singapore borrowings.

In some cases, the bank will allow you to give the margin-call money to them to hold on deposit, which you can earn interest on, but you continue the same risk of speculating with currencies using borrowed money. In fact, if you read the small print in your loan agreement you may find that the bank also has the right to demand a revaluation of the house if New Zealand property prices slide instead of increase. If the house valuation goes down, this has the same potential result of a margin call, in that your loan may now exceed 80 percent of the value of your house.