Nation of shopaholics

If you actively look forward to Christmas shopping, are known on a first-name basis in your favourite shops, even have a text relationship with them, chances are you might be one of the nation's shopaholics the Reserve Bank governor is so worried about.

Shopaholics are often willing to talk about their habit. Self-avowed "former" shopaholic Kerre Woodham says: "With the work I do, I need lots of clothes. I could probably get by with two suits and one long dress, but where would be the fun in that? I always try to buy New Zealand designers. I like to think I help the economy."

What is so bad about being a shopaholic? According to Susanna Stuart, money columnist on Next magazine, an out-of-control shopaholic can end up with bad credit card debt.

Woodham admits she has had some unfortunate spending sprees with credit cards in the past, including one memorable trip to Ballantynes in Christchurch.

"I had Amex, it was the worst thing that could happen. I have to have people put limits on me." With a "really, really big" mortgage and a partner who is a saver, she says, "I'm trying to be better".

Maria Kendon, another "former" shopaholic, chalked up two $5000 credit card bills in consecutive years. In one case, she had to sell shares to erase the debt.

What drives the shopaholic? For Kendon, it is the hope that her latest outfit will catch an attractive man's eye. "I bought a $1000 Prada bag because I was going out with a guy who drove a Porsche, so I needed to look stylish."

Kendon, a hairstylist at Servilles in Chancery Lane, and in her 30s, says she shops every day. It might just be browsing in a magazine, but her mind is always working on the next purchase.

Like many women, she treats herself regularly. She bought $1500 Jimmy Choo shoes to cheer herself up after a back operation. She remembers wrestling with her conscience over the $500 Yvonne Bennetti top she is wearing, which a friend eventually bought for her.

"I said no to the top, it was a mortgage payment, and then like a sign Wendy Petrie was wearing it on TV." A quick call to her friend Stella, who works at Yvonne Bennetti, and the top was put on layby.

Kendon says she is a reformed character with a mortgage to pay on her Remuera condominium, but her friends think otherwise. And she does have $2000 of designer clothes on layby at the moment.

Many shopaholics live in denial. "Ninety per cent of solving the problem is recognising the problem," says financial planner Lisa Dudson, who is advising on a new money programme airing early next year.

Diane, a trendy grandmother on the North Shore, has a weakness for shoes and is convinced she is not a shopaholic. "It is a hobby. I don't buy on impulse, but once on a mission, I tend to keep going."

She has about 50 pairs of shoes in her wardrobe at any one time. "I buy shoes because they will always fit no matter what weight you are."

But Diane's shopping talents are broad. She has been forbidden from shopping with one friend by her friend's husband because she is seen as such a bad influence.

Women in their 40s who have been through separation "can be shockers" at scattergun shopping, says Dudson. "It's all about 'I deserve it because I work hard, because my husband has been a prat'. A relationship breakup is a biggie."

There are ways shopaholics can mitigate the financial damage. Diane consults part-time but has a part-time retail job which funds her shopping trips. "What she has done is make a conscious decision - 'I want to do some shopping, I don't want to use the family money.' It's about being aware of what you are doing rather than blindly putting it on the credit card," says Dudson.

The adviser's concern about people like Woodham and Kendon is that they have bought houses later than many of their friends and that bad spending habits are entrenched.

"Some of them get into consumer debt because they can't change habits," she says.

Alison Renfrew, a financial planner and principal of Lyfords Asset Management, has sympathy for shopaholics. After all, she recently ran up $50,000 on a credit card while on holiday. All paid off now, of course. "It's not really naughty, only if you do it the whole time because it is empty-minded."

Renfrew recommends a good fun flush fund, which gives people permission to spend without guilt.

In case you think this is solely a female thing, think again.

"I had a client, an executive who was constantly shopping for clothes. He bought cars and boats, constantly looking for things that enhance status. According to studies, women shop more frequently, men make bigger purchases, " says Stuart.

Want to know if you're a shopaholic? Go to sorted.org.nz and complete the money personality test.

- HERALD ON SUNDAY