How to Prevent Hoarding From Keeping You in Serious Debt

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Hoarding.

Although it’s a term many use lightly, it can be a true mental health disorder. One that can put a large strain on your life, especially your finances.

Here’s what you need to know about how this disorder can keep anyone suffering from it deep in debt.

What is a hoarder, really?

While most people have referred to hoarding before (usually in jest), it is a serious illness.

The Anxiety and Depression Association of America (ADAA) defines hoarding as “the persistent difficulty discarding or parting with possessions, regardless of their actual value.”

At first glance, this can sound like any of us sometimes. So how can you really tell whether someone suffers from a hoarding disorder?

The International OCD Foundation has a useful fact sheet on hoarding that says that while collectors seek to organize and display their things, hoarders do not. A few helpful facts about compulsive hoarding include:

  • A hoarder collects and keeps a lot of items, even things that appear useless or of little value to most people.
  • These items clutter the living spaces and keep the person from using their rooms as they were intended.
  • These items cause distress or problems in day-to-day activities.

How many people suffer from this? According to the American Psychiatric Association, two to five percent of the population. However, The Washington Post cites a much larger statistic of “6 percent of the population, or 19 million Americans.”

How hoarding behavior affects your finances

Like any disorder, hoarding affects many areas of your life. But a hoarder is also likely to see their finances take a major hit.

Especially when you consider the ADAA’s further descriptions of hoarding:

  • It can be related to compulsive buying (such as never passing up a bargain).
  • Hoarding can lead to a compulsive acquisition of free items (such as collecting flyers).
  • It can also drive the compulsive search for perfect or unique items (which may not appear to others as unique, such as an old container).

It may seem that only the first and last things would hurt your finances, but even the compulsion to hoard free things can have an effect. Here’s why.

Hoarding can lead to overspending

This first one is pretty clear. If you suffer from compulsively buying things, sticking to a budget might be pretty difficult to do.

Hoarding is an addiction, and that addiction to spending can’t easily be fixed with a budget on an excel spreadsheet.

Hoarding can cause you to miss bills

Many hoarders end up in a position in which they have so many things that they can hardly navigate their own homes. As piles of stuff overflow, many hoarders are forced to pave tiny walkways to get from one room to the next.

Now try to imagine finding your paper mail in all of that. Any hoarder who isn’t paying their bills online may end up missing bill due dates – because they can’t find their bills, to begin with.

Hoarding can lead to an increase in daily expenses

For the same reason above, hoarding can lead to an increase in daily expenses.

Serious hoarders who literally fill their homes with things are less likely to be able to use kitchen appliances, as they too will be buried. That means buying more meals out – probably all meals. That’s an expense that can topple even a strict budget fairly quickly.

Hoarding and debt

A compulsive need to buy things can lead anyone into debt. And hoarding is an addiction that can overrun the lives of those it touches.

While there are the physical and financial manifestations of it (not being able to use your own home and falling into debt) there’s also the reliance on the addiction.

Paying off debt requires diligence and an eye towards the future. It requires a belief that you have a future worth fighting for.

But if you have an addiction, that’s going to be the loudest and most important thing in your life. And it’s going to focus you on the here and now. Thinking towards the future with an addiction might be a lot easier said than done.

If someone is suffering from a hoarding disorder and debt, the best thing they can do is seek help for the hoarding first.

How all of us can be a little too attached to our things

While hoarding doesn’t affect the majority of the population, we can all be susceptible to being a little too attached to some of our things.

Lifehacker recently wrote an article about why this is, based on a TED Talk on the same subject. They talked about the “endowment effect” and the “ownership connection” (valuing something because you own it), as well as “sense of self” (letting the things we own provide us with a sense of identity).

Think back to some of the things you might have a hard time getting rid of. Do any of these attributes apply?

The problem with over-attachment to our things

If you don’t identify with hoarding, you might not think it’s a big deal to be attached to your things. But this emotion can run deeper: thinking we need these things to be happy. With hoarding, this emotion happens to the extreme. But it’s something we all deal with from time to time.

Thinking we need things to be happy can lead to large amounts of debt. Imagine upgrading your phone or car before you really need to or buying a larger home on a larger mortgage than you had planned. It can even go down to the college you choose, the clothes you wear, and the types of restaurants you invite your friends out to.

When we attach our identity to the things we buy, it can lead to a problem that spirals out of control if unchecked. It may not lead to hoarding, but it can certainly lead to overspending. And, if you’re in debt, it makes it that much harder to apply your money to debt payoff.

Attach yourself to goals instead of things

So what if you gave yourself a different way to feel a surge of happiness? How about the surge of happiness you get from paying off a small debt or saving up for a vacation? Or even the pride that can come with staying right on budget?

Once you can extricate your sense of identity and happiness from your things, you can attach yourself to your goals. You might even find one working with the other. For example, selling some of your lesser-used things to reach financial goals such as debt payoff.

You don’t have to go full minimalist to make this happen – though practicing the art of removing things you don’t need can certainly be a healthy endeavor once in awhile. Just give yourself a chance to try finding happiness in not spending, in saving your money to reach goals, and see how you feel then.

You just might find that the happiness and pride you feel in working to achieve a larger goal feels better than anything else in the end.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal Loans: Fixed rates from 6.990% APR to 14.865% APR (with AutoPay). Variable rates from 6.255% APR to 12.555% APR (with AutoPay). SoFi rate ranges are current as of September 1, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.255% APR assumes current index rate derived from the 1-month LIBOR of 2.08% plus 4.425% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

    To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.See Consumer Licenses.
  2. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  3. SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.
  4. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

3 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 4.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 4.99% APR loan, a borrower will need excellent credit on a loan of $15,000 with a term of 24 months, and qualify for at least two of the following discounts: (1) add a co-borrower who has sufficient income; (2) use at least fifty percent of the loan proceeds to directly pay off existing debt; or (3) show proof of having at least forty-thousand dollars in retirement savings – contact FreedomPlus for further details.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

5 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 34.49% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

6 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.


7 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

8 Important Disclosures for Avant.

Avant Disclosures

* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.

** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33


* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

7.73% – 29.99%$1,000 - $50,000Visit Upstart
6.26% – 14.87%1$5,000 - $100,000Visit SoFi
6.99% – 35.97%*$1,000 - $50,000Visit Upgrade
5.99% – 24.99%2$5,000 - $35,000Visit Payoff
4.99% – 29.99%3$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%4$5,000 - $50,000Visit Citizens
15.49% – 34.49%5$2,000 - $25,000Visit LendingPoint
6.16% – 35.89%6$1,000 - $40,000Visit LendingClub
6.99% – 18.24%7$5,000 - $75,000Visit Earnest
9.95% – 35.99%8$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

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