Are you a shopaholic?
We may be living in austere economic times, but that doesn't stop millions of us hitting the shops. I, for one, should know.
I can't resist a shopping spree. Entering a clothes shop is dangerous. There's so much to tempt me into parting with my cash that it's hard to determine what I really need and what I'm just buying for the sake of it.
I enjoy shopping and get carried away on occasion, but I'm not a shopaholic.
A shopaholic, according to product comparison website uSwitch, is someone who has built up over half their unsecured debt through fashion purchases. It carried out a survey last year that showed there are seven million shopping addicts in the UK, with men actually owing more than women (£3,425 and £3,353 respectively) in unsecured debt.
Shopping addiction, when you compulsively buy with no regard for the financial consequences, can lead to serious problems - something Alexis Hall, 42, author of In the Red, found out when she ended up £32,000 in debt.
Alexis, from Glasgow, says she used to buy something every day just to get an emotional high: "I would shop all the time and then hide the goods from my partner and friends so I wouldn't even be able to enjoy them."
After facing up to her problem, Alexis felt completely humiliated. This feeling, combined with her debt, motivated her to go cold turkey and she stopped shopping for a year.
"Each day, I would take only £5 to work, which meant I couldn't buy unnecessary things. It was really hard at times, but I knew I had got myself into the mess and I had to sort it out," she says.
Looking back, Alexis admits she was in denial, never checking her statements or bank account balance: "I was buying things because I wanted another life, but I've realised my life right now is pretty good and I don't need to shop to excess."
While most of us won't have such an extreme problem, many people are still spending more than they can afford.
Lying to yourself
Nina Laurie, 25, says she would call herself a shopaholic. Each month she spends more money than her finances allow and lies about it. As a teaching assistant, her salary doesn't cover her shopping habit, but this doesn't stop her. For example, she recently bought some designer boots for £400, only to have hardly any money left for anything else.
She says: "Most of my salary goes on clothes, make-up and accessories. I love the buzz that buying something new gives me."
Despite her love of shopping, Nina says her wardrobe is filled with unworn clothes. When asked why she does it, Nina says she reads a lot of fashion magazines and tries to copy the looks she sees, even though she can't afford to.
Therapist Marisa Peer says over-shopping stems from a feeling of not having enough emotionally and always needing more. If you are guilty of overspending, it's important to stop and tackle the problem, and get your finances back under control.
What can you do?
By making a list of everything you spend over a month, you can decide which things you're buying that you really need, and which are emotional buys. If you can bear it, show this list to a friend or family member you can trust to give you an honest response.
If you've already racked up some debt, make moves to deal with it. Move it to the lowest interest rate you can - try a 0% balance transfer credit card - and start paying off as much as you can afford.
It's also important to make and keep to a simple budget. This will need to incorporate your income and all the details of your expenditure, including everything from mortgage payments to coffee. There are always things you can cut back on.
Are you a shopaholic?
1. How often do you go shopping for non-essential items?
A: Every day
B: Once a week
C: Two/three times a month
2. Are you struggling to meet other payments because of over-shopping?
A: Yes, I am falling behind with payments
B: Yes, I have had to cut back on day-to-day items to meet the cost of shopping
C: No, I never buy anything I can't afford
3: Do you go shopping to make yourself feel better?
A: Yes, it's a good pick-me-up
C: No, I only shop when I need to
You are a shopaholic and need to stop spending. Each time you're in a shop take your time, be honest with yourself and don't buy anything you won't wear or use. Make a wish list of luxury items you want, and a budget plan of when you can realistically afford to buy these.
You like to shop but know when to avoid the high street. By using a cashback or reward credit card you could get benefits for your spending each month. Simply spend the same amount you would anyway but pay for things with your credit card. If you do this, remember always to pay the card off in full each month to avoid interest charges.
Well done, you're a savvy shopper. If you've not done so already, put all the extra savings you have into an account with a good interest rate and make sure you've got a rainy-day fund to pay for any emergencies that may crop up.
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
Moving money from one account to another, whether switching bank accounts or more likely transferring the outstanding balance on your credit card to another card that charges a lower – or 0% – rate of interest. Some card providers may charge a transfer fee that can be a percentage of the balance transferred.