Are You Afraid to Spend Money?

by Miranda Marquit · 10 comments


One of the very real fears people have is that of spending money.

This is especially true after you have been in a frugal mindset for a long period of time.

When you are so used to pinching every penny, it’s common to become scared to start spending more money. While this isn’t always a bad thing, it can contribute to a scarcity mindset and prevent you from taking full advantage of your financial resources.

Retirees Aren’t Spending What They Could

A study published in the Journal of Financial Planning found that many retirees who get to their golden years aren’t actually spending money in a way that draws down their assets.

While this might seem like a good thing on the surface, there are some questions the behavior brings up. For example, I know someone who has plenty of assets and available money, but he refuses to spend money on house cleaning. This is fine in and of itself, but he can’t keep up with the housework due to failing health.

This man doesn’t want to spend money on yardwork, home maintenance, or housework. Instead, he wants to try to do it all himself in the name of frugality. His age and health isn’t allowing him to do a good job though. The result is that his home is falling apart around him, causing issues for not just himself but his neighbors as well.

That’s an extreme case.

But part of the point of saving up until retirement is so that you can enjoy the fruits of your labor. You should be comfortable and in a place where you can spend a little extra to do the things you planned to do.

This Can Happen Before Retirement

Being stuck in this mindset can also impact you today. This is something I see sometimes with people who have paid off debt. They have scrimped and saved so long and frugality is such a part of their lives now that they have a hard time spending once they are in a better financial situation.

While you certainly don’t want to end up in debt, you don’t need to keep being frugal to the point of extremity. It’s ok to let loose a little and spend on things that will truly enrich your life and bring you new experiences.

The idea is to have a plan for your money. That plan can involve saving for retirement, charitable giving, extracurricular activities for your kids, and travel. Now that you’ve paid off your debt, figure out what you want your money to do for you.

Just hoarding it won’t provide you with long-term benefits. After all, what’s the point of having money if you can’t use any of it at all. I’d rather have enough to live on comfortably and enjoy my life than die at some point with a huge pile of money and a ton of regrets.

Spending so long saving so much, or putting everything toward debt, can lead to worries about spending money. You might freak out at the thought of it, or even feel guilty when you treat yourself.

A good spending plan can help you get beyond these feelings and put together a sensible plan that allows you to remain solvent and still enjoy life.

How do you view money? Are you so used to saving that you can’t get yourself to spend? How will your life be different if you just spend what you calculate to be affordable to you?

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{ read the comments below or add one }

  • Anders says:

    Thank you for a good article Miranda!

    I found this topic to be very interesting partly because I’ve been thinking about this a lot myself lately. We went over our budget a few months ago and tweaked things to be more accurate for how things are in our life today. This lead to an increased amount of money saved each month because we bring in a bit more now than we used to.

    We used to live on one small income and made it work, and even save money with that. Similar to previous “speaker” Adriana, we don’t feel sorry about our rather restrictive budget. But that’s because we have a goal in the end and we aim to reach FIRE as a family within 10-15 years.

    I agree with Miranda about what she write’s about hoarding, and that frugality for frugality’s sake is not necessarily a good thing and can be rather intrusive in your life. But if you have a purpose with your frugal lifestyle it’s a great way to live. We’re hoarding money and invest in our future as it is now.

    As Financial Coach Brad says in a comment there are many people who live without direction in their finances, and being frugal, for us, has helped us become much more aware of our money. And that lead to an increased interest in everything money-related for me.

  • David Chen says:

    Great topic! I find myself shying away from spending money quite often. In some situations I end up giving in (when my daughter begs for new toys or clothes), but for myself I try to stay away from buying unnecessary items. I would say I am pretty good at handling my money, but I think we are all guilty of sometimes spending a bit more than planned in certain situations.

  • I got used to being frugal back when both my other half and I were in debt. I’m not sorry I got used to not spending money, but I do agree sometimes extreme frugality isn’t healthy.

    Your example of the retiree refusing to spend money reminds me of an old lady I used to work for. She’s the same way! Retired and unable to take care of house chores by herself. However, she did accept to hire help, even if only for a couple of hours every few days.

    I think this mentality is due to the fact that retirees are ‘done’ with saving money. When you’re young and able to work, you can find many ways to supplement your income. But when you’re unable to work anymore, you begin spending more than you earn, which is a pretty big change.

  • Arminius Aurelius says:

    My parents came from Germany about 1927 , they met on board ship and kept in touch for the next 3 years. [ northern New Jersey and Bronx , N.Y.] They got married and had me . They were extremely thrifty and yet we did not go hungry , small amount of meat and lots of vegetables and salad. Because of the depression my fathers hours were cut from 40 hours down to 20 hours . But he looked for work on the side . By 1935 they had saved enough money to buy a duplex house . Most born and bred Americans could not afford to . By 1946 , they bought a summer cottage in the Catskills , N.Y. How was it possible, they were thrifty . God Bless my parents , they taught me thrift which helped me on the road to wealth . Even when in the Navy [ 1950 – 1953 ] I earned $ 100.00 a month but saved $ 25.00 a month. After getting an education and working a few years , I ended up buying several bankrupt restaurants with the money I saved ……it paid 100 fold. Always bought low mileage used cars [ 14,000 to 19,000 miles ] and saved 40 % to 50 % . After the Navy I wanted to visit Europe but did not want to touch my savings , so I worked a 40 hour week and a 20 hour a week for 10 or 12 months before my trip . Bicycled and stayed at youth hostiles / cheap. Since then I have visited Europe at least 30 to 35 times but always look for reasonable accommodations . In the past few years I have begun to loosen up a bit with money , it is hard to break the savings habit . Have a steady income from 2 commercial rental properties so I have no worries whatsoever. God Bless my parents . [ A Fool and his money are soon parted ]

  • The fact that the majority of people don’t budget tells me that most are also either over- or under-saving. You need to know how much you need annually to then figure out how much you need for retirement. Just saving 10% or 15% or whatever isn’t a good plan. You might wind up with way too little – or too much – money. I feel that someone with a good cash flow plan (budget) removes a lot of the “fear” of spending money – because they have a plan and can tell when they are on track or not.

  • Interesting read. I’m not afraid to spend money. I’m only afraid in spending money on things that either are not necessary or yield no return to investment.

  • freebird says:

    I may be one of the underspenders, my total annual expenses (excluding income taxes) are still less than 10% of my AGI even though I reached my number over a decade ago. I think I’ll always view money as a scarce and valuable resource, doesn’t matter if I’m a billionaire or broke.

    But spending I see as a different decision. Once I have my needs and wants filled, I see further spending as waste. I’m at this point now. If I spent according to what I could afford, I believe life would be no better but the annual surplus would be gone. Think of it this way, money is just one ingredient like sugar in a cake. If you use triple the amount of sugar, it doesn’t make a better cake.

    Maybe another factor is how I find income more exciting than outgo. Sometimes despite my best efforts, a project at work stalls. A bump in one of my portfolio holdings can brighten what would otherwise be a down day. Sort of the flipside of ‘retail therapy’?

    As to the point of keeping money that I can’t use– well others may find it useful. A close friend or relative may happen upon a business opportunity or a medical emergency, and having the surplus gives me the chance to make a difference. I view my stash as a rainy day fund not just for myself but for people around me.

    • David Ning says:

      Using your money for those around you is a noble goal, and I’m impressed that you only spend 10% of your AGI. Maybe it’s time to start donating some to worthy causes in your lifetime so you can see the fruits of your labor freebird!

  • We highly value experiences over material things and try to travel as much as we can since we are still young and even after all our expenses, we are saving half our income. We think it is super important to live and enjoy life all along your journey, not just saving and hording for the future. Thanks Miranda

    • David Ning says:

      You know…. I never liked traveling until recently but I’m starting to see the beauty of spending money on experiences. Slowly but surely, I’m valuing memories and experiences more than material possessions and I cannot see myself ever going back!

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