For much of her life,
Lynn assumed her love of spending money was nothing more than a carryover from her childhood.
“There were some warning signs, but I thought it was because I came from a family that didn’t have much money,” she says. “When I got a job, I would spend down to the last penny in my pocketbook. That’s no exaggeration.”
For
Lynn, things only deteriorated from there. On top of irrational spending sprees— “I’d go to the store and end up buying things at random whether I needed them or not”—she began to bounce checks regularly. She borrowed money from every source possible. It was only when she was diagnosed with bipolar disorder did she understand that her money problems ran even deeper than she thought.
“At one time I had eight outstanding payday advance loans, five of which I am still paying on. It got so bad with those that one time one of the lenders called me at work and said they were going to get me for Internet fraud because of applying for loans on the Internet and then not following through with the payment,” she says. “I ended up borrowing money from three co-workers to help pay off the most pressing loans. Nobody could believe the things I did.”
People with bipolar disorder are very much like everybody else, and how they handle money is no exception. Just as anyone, those with bipolar disorder can struggle with debt, ill-advised investment decisions, spending sprees, and other money snafus. The only trouble is, the dynamics of the disease can make the ramifications of such missteps all the more disastrous.
However, managing both a bipolar disorder condition and a healthy financial life aren’t lost causes by any means. It takes an understanding of the various ways that a bipolar disorder condition can impact your finances and, equally important, what you can do to head off any problems as effectively as possible.
One of the most common problems experienced by people with bipolar disorder are spending sprees—shopping expeditions that are really more about the spending process itself rather than any genuine desire for the items purchased.
“People use a variety of strategies to self-medicate. Shopping can definitely be one of them,” says John O’Brien, PhD, a
Portland, Maine, psychologist. “They can go off on spending sprees that grow into genuine manic episodes.”
But the possibility of real financial problems isn’t limited to low periods when spending can lift a mood. As Frank Mark Mondimore, MD, a psychiatrist and member of the clinical faculty of the Johns Hopkins University School of Medicine, points out, the opposite can prove just as devastating. During those “up” periods in which a patient’s confidence is exceedingly—if not excessively—high, financial choices can be made that seem sensible at the time but, in retrospect, are downright foolhardy.
“One of the hallmarks of the [up] condition is overconfidence,” says Dr. Mondimore. “People can do foolish things financially and take risks they may not otherwise take.”
It’s not uncommon for financial professionals to get a firsthand view of the damage that bipolar disorder can wreak on what once was a solid financial life. Financial planner Glen Clemans says he recently started working with a female client who presented him with a $400,000 financial portfolio. While seemingly substantial, it was paltry when compared to the $1 million nest egg with which she started out shortly before.
“She initially had $1 million, but then she started day-trading stocks on the Internet,” says Clemans. “She lost about $600,000 in a manic spree. When we started working together, she told me that she suffered from bipolar disorder.”
Unfortunately, the workings of bipolar disorder are often insidious enough that the problem is difficult to detect. For many people with bipolar disorder who dive into a morass of financial missteps, they are sufficiently out of sorts that it is clear that something is not right. However, there are others, Dr. Mondimore points out, who may settle into a state of hypomania. That, he explains, is not as visibly irrational or extreme as other states, but still problematic enough to prompt financial steps and decisions that, considered under different circumstances, would be dismissed as ill-advised.
“Hypomania is less severe, so it doesn’t come off as complete disorganization. Rather, it seems more [like] an elevation of mood and energy level,” he says. “That’s where people can really get into the most financial trouble. Because they’re not so grossly disorganized, people can walk into a dealership, buy a car, and no one would think twice about it. It really is the most dangerous state.”
The confusing nature of bipolar disorder can go even further than that. As Dr. Mondimore points out, a patient who may have been in a down state for weeks or months and suddenly emerges from that bleak setting is likely to be relieved that his mood has lifted. However, feeling better doesn’t necessarily bring emotional and psychological balance.
“Another difficult part is recognizing when a down period ends and what can happen after that,” he says. “Periods of feeling good—when you can make financial mistakes—are often not recognized as abnormal mood states.”
Nor do the financial problems only come down to self-serving spending orgies. Until she was diagnosed with bipolar disorder in her later 40s, Jackie thought her financial generosity to various inner city religious organizations was simply the right thing to do.
“I gave them all my retirement money, thinking that was what God wanted me to do,” she says. “I also charged about $40,000 for airline tickets, hotel rooms, and other expenses. It was only when I was out from under the grandiosity of the disorder that I saw what was happening.”
Couple those issues with the sheer variety and availability to spend money recklessly and the potential for lifelong financial hardship becomes all the more problematic. From mega malls with hundreds of retailers to the Internet where tens of thousands of shopping options are a mouse click away, a person with bipolar disorder looking to spend has an unhealthy lineup of choices. Furthermore, credit card offers arrive in the mail on a daily basis. Particularly perilous are television-based shopping shows and networks where items are pitched with glamorous ruthlessness.
“Those really feed into the manic energy that many patients with bipolar disorder experience,” says Dr. Mondimore.
Fortunately, there are a variety of steps and strategies that these people and their support providers can pursue to head off financial missteps or, at the very least, minimize damage. First is a matter of simple awareness. Both the person with bipolar disorder and those close to them should get to know the warning signs that suggest that a shift in mood—and potentially, in money habits—may be around the corner.
“The real key is recognizing the red flags that can crop up. I know one patient whose mood was about to change when he started tearing out response cards from magazines,” says Dr. Mondimore. “But, they’re as individual as the person, so [recognizing these red flags] comes with experience.”
Equally important is having a comprehensive plan in place to head off irrational money decisions before they even occur. For instance, if a person with bipolar disorder maintains an investment portfolio, it’s smart to work with a trustworthy financial planner, adviser, or broker. Work out a detailed overview of financial goals and reasonable steps needed to attain those objectives. If it’s appropriate, let them know about the bipolar disorder condition.
That’s sensible on several levels. For one thing, it’s simply smart to map out a financial plan, no matter the obstacles with which you may have to deal. But it also can prove valuable to a financial advisor who knows what your goals are and what you’ve agreed to do. That way, he or she can notice those instances when a certain sort of behavior doesn’t seem appropriate.
“I can’t legally say no if, for instance, a client calls and orders a trade that doesn’t seem to make sense,” says Clemans. “But if the behavior seems odd, that can provide a check. I can either suggest that we meet face-to-face to discuss it, or I can contact a family member or friend who may be able to intervene.”
“Even if they’re fairly depressed or manic, sometimes pointing out that what they’re suggesting doesn’t fit with the plan you agreed on may work,” adds Dr. O’Brien. “Sometimes, that can cut through the emotions and, even if it doesn’t, it’s still worth a try.”
That strategy can be taken a step further, if need be. Should the potential fallout be serious enough, investigate giving a friend or loved one financial power of attorney to limit individual money decisions. Even something as simple as checking accounts where two signatures are required can make it more difficult to follow through on ill-advised financial choices.
Consider some consumer-based moves as well. If you think you can manage, go without a credit card or, as an option, one with an exceedingly modest credit limit. Investigate debit cards as an alternative. Rather than a line of credit, these are tied to a bank account and can effectively limit spending to whatever assets are in the account.
Experts and people with bipolar disorder agree that it’s imperative to stick with both a treatment plan as well as a systematic approach to getting out of debt. If, for instance, you have several credit card debts, paying off the smallest one first gives you a sense of progress. As well, consider consolidating various debts to make monthly payments more affordable.
Above all, no matter how intimidating the prospects, don’t give up. As
Lynn herself notes: “It’s been a very destructive path that has cost me thousands and thousands of dollars over the past 30 years. It’ll probably take me many years to get out of that debt, but that’s something I am dealing with.”
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Jeff Wuorio is an award-winning author and journalist who writes about finance, entrepreneurial, and workplace issues from his home in Buxton, Maine.