25 – Addiction and Debt Problems: How to Deal With Them

Wayne Kay  0:03  

Welcome to the Debt Matters podcast where we help Canadians find solutions to their debts with Licensed Insolvency Trustees from across Canada. I’m Wayne Kay, today we’re going to be diving into a very deep topic regarding addiction and debt. 

My guest today is Matt Fader with Allan Marshall & Associates with offices in the Maritimes in New Brunswick, Nova Scotia, and Prince Edward Island. Matt, thank you very much for being here today.

Matt Fader  0:29  

Great to be here Wayne, thank you.

Wayne Kay  0:30  

This is going to be a big topic because I’m sure addiction and big debt, you probably see this go hand in hand quite often.

Matt Fader  0:40  

Yes, it is certainly something that we see and not in your stereotypical forms of addiction. Addiction is evolving. So we’re certainly seeing some of the ramifications of that.

Wayne Kay  0:53  

Oh, okay. So when you talk about addiction evolving, what are you talking about? What does that mean?

Matt Fader  0:59  

Well, I mean, historically, when you think of people, addiction wise, you’re thinking of substance abuse. And what we are finding now is, yes there is, especially pandemic wise. Substance abuse stuff is currently certainly rising.

 However, we’re seeing a lot more in the areas of – typically it would be classified as gambling. But you know, a lot more pay-to-win, pay-to-play type of apps on your phone. Or we’re seeing a lot of money being spent in small, little dominations, just as they get larger and larger. 

So it’s a bit of a tricky time to have a little bit of a less conventional addiction, such as gambling, or I don’t know what the technical term would be. But it is that interaction, where you’re not ingesting yourself with a chemical per se, but you’re getting that stimulus from the wheel spinning which you would typically see in typical gambling versus playing the Google game online action games – where you pay for an extra spin or do whatever it is right now. 

We are actually seeing an increase – that when you look at people’s credit card statements or things like that, you see a lot more stuff getting purchased through iTunes, or through the Google Play shop. And that’s where a lot of it’s going.

Wayne Kay  2:20  

Well, they’re masters at getting us to spend more time on our devices, and they will do anything. And when I say they, I’m talking about the yes, the app developers. These guys are brilliant, and they want eyes on screens. And so it is an addiction these days, for sure. 

Social media is an addiction. And what happens to us, I guess – we were looking to get lost because the stress levels and anxieties levels that people have been experiencing for the last couple of years, are like we haven’t seen before.

Matt Fader  2:54  

Absolutely, there’s idleness that comes with it – I’m sitting at home and bored. There’s only so much Netflix that I can watch or whatever. And they’re looking for the escape. It’s an easy escape. And the unfortunate thing is, it is so accessible. As they said, it’s not like your conventional type of addiction where you would say, Well, an alcoholic who feeds their addiction with alcohol. You say well, don’t buy booze, and maybe that will help. Spoiler alert – addiction goes a little deeper than that. 

But it is treating a symptom of the disease where this is really something that is on the rise as far as accessibility and accessibility of age groups, too, that other types of substances wouldn’t be available to. So you can see the type of app, type of addiction, striking older people sitting at home on their couch, playing on their phone and banging off $1 purchase here, a $5 purchase there, completely losing track of their spending. And then before you know what they’re saying, Well, my credit cards backstep. 

So it has a unique impact in that it affects pretty much anybody that has access to it or that can be susceptible to those types of impulses. It certainly does create a major problem, not only when it comes to amassing the debt, but also to a form of treatment, I guess, and abstinence from it. 

How do you unplug from it? Like you said, it’s kind of like when an alcoholic makes a decision to say I’m going to give up alcohol, they stop drinking and they get treatment. For somebody who – they can stay away from it. For somebody who’s playing on their phone constantly, you almost have to go to a flip phone to avoid it.  And who wants to do that?

Wayne Kay  4:51  

You’re absolutely right. I think that’s a major point that we need to discuss. Typically too if you say okay, Where’s dad and where’s mom? Oh, they’re at the casino again. You start to pay attention to maybe this is leading to an addiction regarding gambling, where now? 

I mean, I haven’t seen my father’s credit card statements, I have no idea if he’s gambling on his phone or his tablets or what he’s doing. I haven’t got a clue. And it’s not something that I would discuss because it’s not, I don’t know, right. Whereas if he was traveling to –  where are you today, well I’m at this casino. I’m at that casino all the time, then I would be questioning. So it’s, I think it would almost be very difficult for anybody in the family to notice there’s a problem.

Matt Fader  5:41  

Absolutely. And typically, the problem only becomes apparent when the statements come or when the bills stop getting paid and those debt problems, the problems that arise from not being able to satisfy our obligations pop up. 

And and again, as part of my job as a Licensed insolvency trustee – not only are we there to say, well, we can we can help clear up the debt problem, but there is an underlying issue there that as we go through the counseling that’s required, where we have to be able to identify that type of behavior. And then to be able to say, Okay, well, here are some additional resources, because some people are still unaware of it – It’s not a problem, because the conventional mindset is that I’m not ingesting anything. So therefore, how can I be? How can I have a problem? If I’m not actually eating something, or ingesting something? 

So there’s a general unawareness or just not the ability to really to see it, as it as it exists. So it can be a little tricky from that standpoint. But that’s our job – is to go through those. When we have somebody who’s running into those debt problems, to sort of look at them, and to have a discussion with them about them. So we might want to look at that. And here are some resources that are available to get a little bit more assistance or information. Because everyone’s susceptible to it. And it’s something that again, when you’re not aware of, if you’re not watching for the problem, you’re not going to see the problem.

Wayne Kay  7:21  

Yes. What about when you look at addiction versus overspending? Well, how do you kind of tell the difference between those two? 

Matt Fader  7:33  

It’s a little tricky, right? Because overspending exists in all facets of life. And how do you define it? You’ll have people that will have – quote, unquote – addictions to buying things on the home shopping network, or things like that, which are very simple to track. 

But at the same time, if you have somebody who has an issue with compulsive eating, that’s going to be hidden a lot deeper in their grocery bill, or their dining lunches and restaurants or things that sort of, I don’t want to say go beyond the realm of normal – because there’s not really such thing as normal. 

But at the same time, you have to be sort of attuned to that – to say, where could these potential problems lie? Because overspending is so broad. Everyone overspends you know. If you say, Well, I’m just getting by on my basic needs of food, warmth, and clothing and shelter, under Maslow’s needs hierarchy. Then you say, Well, we can all live a very monastic life and just my basic needs are provided for. But everyone will indulge in some way, shape or form. And one person’s overspending is relative to what the income looks like for the person. 

So it is difficult to sort of pin down somebody who says, I’m a family of one, I make $1,200 a month – for them to go to McDonald’s once a month. They might say, Well, that’s overspending, because they’re breaking their budget. I would say it’s okay to do that to treat yourself, in moderation, but it is all relative to the situation. 

But that becomes an issue of identifying, I guess, shortcomings in human nature or identifying where those impulses lay for people to say these are your dangers. So these are the areas where you need to be a little bit more attentive, because it’s a very slippery slope. And it only takes one or two terrible decisions for you to live with years of consequence from.

Wayne Kay  9:31  

Yes, but when you are talking, I just keep going back to thinking about everything that we do online. Everything is so easy now that you can see how it can become you buy this you buy that – and you don’t even need it, but it’s on sale and it makes it so simple. 

Matt Fader  9:48  

100% That’s part of the psychological aspect of bundling – like we see it in the grocery store. Of course, hey, buy two for $4 Yes, okay, well, do I need 2 when one is $2? Well, maybe not. But because it’s got this big sign, hey, you’re going to save. If you buy two, you’re like, great. I’ll do it. I’ll save the money. But then of course, in that scenario, you just tend to consume more. 

You know, there’s somebody who’s like, Oh, I’ll buy two bags of chips. One for this week, one for next week. Yeah, whatever. Right? They’re both gone by the next night. So you kid, right? So, that is part of the marketing. If you make it affordable, people will buy it. But then you try to sell in bulk. 

You know, if you’re going through your iTunes Store, and you’re like, Oh, look at that. Here’s some $5 movies. Well, before you know it, you bought 10, $5 movies, because you thought, Oh, I’m saving money because they’re cheaper. And they’re normally 20 bucks.

Wayne Kay  10:48  

Hmm. People buy movies?

Matt Fader  10:51  

They do, they do. So a lot of people do support artists and whatnot. Well, I can go down that road. Okay. On ethics podcast, it’s a money management podcast.

Wayne Kay  11:08  

Okay, no, I’m just thinking about – with all the streaming services, and all the free movies, even on free websites, yeah, they’re there. I can’t even imagine renting one. 

Matt Fader  11:24  

Sometimes, you just really want to watch Rocky, oh, it’s not on Netflix. So where am I gonna find it?

Wayne Kay  11:30  

There you go. That’s funny. Are there some common misconceptions that are out there regarding addiction and debt?

Matt Fader  11:37  

Oh, 100%. You know, because your biggest common misconception about addiction is that it’s a hobo on the side of the street or something like that, and that a lot of people are immune to it. Where it’s not that simple. Everyone can put themselves in that position. 

So it is very much a cunning, baffling and powerful to quote some of the literature, that any form of addiction, it will be sneaky. And it’s not gonna smack you in the face. Because if it was something that was obvious and apparent, I will do this and it will completely torpedo or 180 my life, people are probably less likely to do it. 

So by nature, it has to be deceptive. It has to be something that people are unaware of, to fall into the trap. And then it has to be difficult to recognize when you’re there. Because that’s how we get overwhelmed. That’s how we get buried in it. So it is a very tricky thing. 

And again, it wreaks havoc with your finances. An alcoholic will tend to consume alcohol and as a result of that – their budget, that becomes their focus, that becomes their obsession. So therefore, their money gets ingested into that-  into feeding that obsession. And as that obsession grows, of course, it wreaks even further and further damage in the finances. And if you expand that out to say, how does this affect the family dynamic, you can see how that can definitely have a cascading effect on not only the family social structure, but on larger issues as a whole through job loss or reliance on social services, and a whole bunch of other negative impacts that come from it. 

But that translates into everything. You know, it’s not just alcohol. It’s not just somebody who’s smoking, meth or crack or some kind of dry good. It can extend to the person at the casino, the person who’s playing on their phone, the person who is susceptible to overeating. It wears so many different faces, and so many different masks that it’s actually terrifying when you stop and you look at it, and when you’re faced with this stuff on a regular basis, and you’re dealing with people who – their root causes go far beyond just the fact of saying, Well, I wanted to have this so I bought it.

Wayne Kay  13:59  

Are you finding that many of these situations that we’re talking about regarding the addiction of debt – are they from single people or are they from couples?

Matt Fader  14:11  

All over. It knows no type of age group, it knows no race. It knows nothing, everyone. So everyone is susceptible. 

Wayne Kay  4:18

What’s your advice then for couples maybe? 

Matt Fader 4:22

Well, for couples, it can be a little bit trickier. I always would treat any type of couples work when it comes to money management as budgeting is a team sport. 100% your finances have to be a team sport. You can’t show up saying I got my hockey skate my stick and have your spouse show up where with their broom ready to play Quidditch. You have to be playing the same sport, you have to be on the same team that you’re not going to work against each other and that’s one of the problems 

With people who say, Well, what’s mine is mine, what’s theirs is theirs? Yes, sure it can work but it is a team sport. And you have to be honest. And you have to be open, especially with your partners to say what’s going on finance wise. Secrets keep us sick. 

And those are major problems not only to budgeting, but to relationship issues. And yes, one person’s behaviors absolutely affect the other. Yes, especially if they’re running on their own. And now they can’t maintain their end of the bargain. So you know, if you’re saying, Well, I pay my half, they pay their half, and one partner comes up short, the other partners pulling the weight – but at the same time, they may not actually be financially able to do that. So it can certainly spiral out of control very quickly, if you’re not transparent with your finances,

Wayne Kay  15:56  

Or one of the couple who’s making more money seems to be great, and the other ones struggling even though they’re married, and then that doesn’t do any good in a marriage.

Matt Fader  16:05  

Well, every situation is unique. There’s not a template of saying, This is what it plays out as – so it’s very, very tricky. And you know, mental health plays into it. We’re going to see an increase in a lot of mental health issues over the coming years. With better diagnosis, better treatment, it’s great to say, we can integrate more people into the working world that once upon a time weren’t able to, through positive treatment – through just a better understanding of the way that people operate.

But at the same time, sometimes those social skills end up being lacking. Focus is different, and that creates problems with budgets. So we’re going to see a lot of problems in the future with mental health. We’re going to see a lot of problems, particularly one that I’m starting to catch a glimpse of, would be somebody with high functioning autism, very bright, very focused, incredibly smart, in all respects – but focused on a task at hand where other matters fall to the side. 

And then I have a debtor that makes great money. You know, a fantastic computer programmer, probably one of the smartest people I’ve ever met in my life, but struggles in knowing how to pay a bill. And that’s what you’re working with is you’re saying, Okay, well, it goes beyond what I would do to say, I have got to teach somebody how to do that. But it’s recognizing it and then encouraging that type of behavior to say, you have to go outside of this to find that additional help and to find those resources available. So there’s a lot of issues that are coming that extend from addiction to mental health issues. I don’t want to get on a sidetrack on that.

Wayne Kay  17:53  

Well, Matt, this, I think, was brilliant information. Maybe somebody listening is saying, Wow, they’re speaking my language. This is kind of what I’m going through. And they’re speaking exactly to me, and they can reach out for help. They can do that with you through your website.

Matt Fader  18:10  

They can, yes – wecanhelp.ca. We operate in Atlantic Canada and we’re going to be opening up in Alberta. So we’re going to cast the net a little wider, and hopefully be able to help a lot more people. 

Wayne Kay  18:23  

Well, that’s terrific. Matt, thank you very much for all the great information.

Matt Fader  18:28  

I hope it was helpful, if not terrifying. But hopefully somebody out there is triggered enough to say if you’re running into problems, pick up the phone, especially money wise, pick up the phone and call a Trustee. 

Wayne Kay  18:41  

That’s why we’re here. Absolutely. Matt Fader, my guest today with Allan Marshall & Associates. Once again, the website is wecanhelp.ca and you can get a free consultation with Allan Marshall & Associates. 

And that’s it for the podcast today. It’s called Debt Matters podcast and we’d love it if you could subscribe wherever you get your favorite podcasts from. And of course, if you want some more information about us, you can check out debtmatters.ca Thanks very much for listening.