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Extreme frugality and money guilt are just as dangerous as impulsive spending. Money shouldn’t have such a strong hold over you. Everywhere you look people talk about how important it is to save money and avoid debt, but not many mention the flip side of that- the guilt that can brew as a side effect of being frugal.
Once you learn to approach money as an emotion-less tool, that is when you truly take control of it.
Do you find yourself agonizing over spending an extra $2 for a drink at a restaurant so you end up getting water? Or do you only purchase items as a “reward” when you’ve achieved something? If you’ve answered “yes” then you most likely suffer from extreme frugality and money guilt.
Before money was created, people used to trade trees or lumber for fruits or vegetables. They exchanged services for goods and vice versa. Bartering was a constant cycle and goods were circulated throughout the world. Money is just a universal way of bartering. It is a tool that is there to serve you. You decide where it goes and you are in full control of earning more through side hustles or investing.
As a money minimalist, I have started approaching money with a minimalist’s perspective. “Minimalism is the intentional promotion of the things we most value and the removal of everything that distracts us from it.” It does not mean you have to be extremely cheap, instead it means you have to be intentional with how you spend your money.
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5 Signs you suffer from money guilt
Since being frugal is so revered by the debt free community, you might not even realize you have an unhealthy relationship with money. So what are the signs that you’re suffering from bouts of money guilt?
- It takes you ages to spend large amounts on items (even those you’ve been planning and budgeting for!)
- You can’t get yourself to spend an extra few bucks on a juice so you order water
- You only purchase items when you’ve “achieved” something (you just got a promotion so you think you finally deserve to replace your raggedy old shoes!)
- You avoid investing in a course that will help your business grow because of the upfront cost
- After making a large purchase you second-guess yourself and wonder whether it was a mistake
There’s two sides to every coin. These “money guilt symptoms” can actually be helpful ways that an impulsive spender can limit their spending. But everything should be done in moderation. You have to decide what matters to you and realize that you should not beat yourself up for spending $200 on a eufy robovac (like I just did on Prime Day!)
Where Does Money Guilt Come From?
There are a multitude of reasons why you might feel guilty when spending money. Whether you learned it as a child from your family, or you are stuck in the paycheck to paycheck mindset, everyone experiences the guilt differently. It’s important to challenge yourself to discover why you feel ashamed when you’re spending money on yourself.
Here are some common causes of money guilt:
- You were raised in a family that faced financial struggles
- You are surrounded by friends who have lower incomes causing you to feel shameful for “splurging” on nonessentials
- You face anxiety about being broke and not being able to provide for your family
- You fear an up-coming expense you can’t afford
A lot of these causes can be solved by ensuring you have a hefty emergency fund and creating a debt payoff plan. Here’s what you should do with your next paycheck. The rest of the article should help you with tackling the remaining guilt head on.
How To Stop Feeling Guilty When Spending Money on yourself
It’s still an on-going battle for me, but I’ve found a few things that have helped me tackle my money guilt. By far the most effective has been reframing my mental approach to spending money. Since guilt is an emotional reaction, the best way to fight it is through altering your perspective on spending.
Identify When You Feel The Most Guilt
For me I won’t bat an eye at spending hundreds of dollars on my business or purchases I deem “productive.” But when it comes to buying a new pair of shoes or a trendy lamp for my living room, I’ll overthink it a hundred times.
It’s valuable to take a few minutes and reflect on what situations lead to the feelings of shame. Once you’ve identified them and written them down, it will become easier to manage and overcome those triggers.
Do you feel like the money could be spent on something more important? Add those “important” items to a wish list. Start budgeting for them. But also include items that you might normally deem non-essential. If you’ve already budgeted for the essentials then the left over money should be free to be used however you please.
Improve Your Money Mindset
A friend of mine once told me years ago- “you can always make more money.” Money is constantly circulating the world, and there are always ways to earn more. Whether it’s with a side hustle where you monetize skills you already possess, or by negotiating a raise at your current job, you can always earn more.
Once you realize that you do not have a limited supply of money but are in fact capable of earning more, spending becomes easier.
Alter Your Focus From Saving To Earning Money
Have you heard of Ramit Sethi? He is constantly preaching that you cannot save yourself to wealth. This is such a valuable lesson that many of my frugal minded friends struggle with. You are better off focusing on earning more money than saving money on a few bucks here and there.
If your money is not being invested or in a high-yield savings account, it is not doing you any good. By increasing your income with side hustles, raises, or investments, you will start realizing that is a more valuable use of your time and money than by cutting out a weekly Starbucks latte.
We are taught from a young age to focus on the wrong things- if you save everything you earn, you will live comfortably. In reality, we should be encouraged to find ways to constantly increase our earning potential and follow a financial plan and budget.
Think Of The Purchase In Terms Of Work Hours
Say you’re wanting to buy a new computer for $600. Your current one freezes up and sporadically deletes your work. Since this purchase is expensive you will have to properly budget for it and plan ahead. Once you’ve set the timeline for when you’ll be able to comfortably afford the new computer you should be able to freely purchase it and not feel any guilt about doing so. But, if you’re anything like me, you will still rack your brain thinking the purchase is too grand.
One method that can help you overcome these troubling thoughts is by calculating the cost in terms of hours worked. Say you earn $20/hour, that means this laptop is essentially costing you 30 hours worth of work. So in less than a week you have earned the laptop. If that does not help, then perhaps you could find a way to work 5 hours overtime for the next 6 weeks to “earn” the money you plan to spend on the laptop.
Now take a step back, why does “earning” the extra money with overtime make you feel less guilty than allocating the money you currently earn? It’s because you had a plan for that money and that money was not going to be spent on anything else. Because, if it weren’t for the laptop, you wouldn’t have gone out of your way to earn that money. Essentially, you created a plan and budget for $600 worth of your income. So take that same mindset and apply it to your current budget. Budget that $600 into what you’re currently earning. Once you have a plan for your money your guilt will begin to dissipate. That is the power of a budget.
Create A Budget
That $6 you save on a latte is something that won’t even be a blip on your radar if you allocate money towards it every month. I’ve found that if I mentally prepare for purchases, check my bank account, and recognize that they won’t significantly affect my budget then I do not feel guilty afterwards. The key is to plan for them and tell yourself that it is okay.
Budgeting does not have to be complicated, in fact my budget is very flexible and allows me to spend as I please as long as I’m meeting my savings goals.
Remember to give yourself a reality check before you’re about to spend large sums of money. Remind yourself that you’ve budgeted for it, you can afford it, and it will bring you joy.
Read: How To Budget On A Fluctuating Income
As a caveat, I’d like to let you know that I’m not suggesting you spend money willy-nilly. There are steps you should take first if you are just beginning your money journey. Here are 10 steps to take to be financially secure.
Do you currently suffer from spending guilt? If you found these tips helpful please be sure to save and share them with others!
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