Why do I resist spending money?

[Alex in Virginia]

Some may think this is a strange problem to have, but it is real and it is getting in my way.

I've got an annual retirement income surplus of $25,000 AFTER taking into account every expense and every contingency I can think of. IMO I have more than ample reserves as well. Although I don't have a lot of things (toys) I want to buy, I do have things I want to DO. But I somehow feel wrong about going ahead and spending the money on them. Same thing with things I DON'T want to do -- I resist paying someone else to do them, even though I financially could.

Yes, I'm cheap and a tightwad, but if I don't spend the money I'll have to give it away in my will. And I'm not up for that.

I see some ways of going ahead, probably by striking some kind of deal with myself. But I would appreciate any feedback, input or tales of lessons learned -- before I end up spending my money on a shrink to get over this.

 

[azphx1972]

Give me access to your money and I will help you with your problem.

Usually fear is a large driving factor in keeping people from doing stuff. Is there something you are afraid of, like running out of money or losing what you've worked so hard to accumulate? Perhaps you need to reevaluate your AA and/or insurance coverage if that's the case. Beyond that, perhaps a visit to a shrink may be productive in identifying what is keeping you from giving yourself permission to enjoy life more.

Unfortunately, most people I know have the opposite problem that you do. They can't seem to stop spending money that they don't have.

 

[REWahoo]

You've answered your own question:

Yes, I'm cheap and a tightwad...

Individuals who spend a lifetime practicing those skills have a great deal of difficulty changing their thinking. Many simply cannot and you may fall into that category.

If that's the case, then the best thing to do is not worry about it. You cannot have it both ways (save it and spend it) so learn to embrace the frugal you and get on with your life.

The only other suggestion I have is give some though to finding a cause greater than yourself - a group or an individual with needs you could help meet, pain and suffering you could help alleviate - and see how giving them a few bucks works for you. Might be just the thing.

 

[David1961]

You may want to think about what money represents to you. Maybe security, freedom, etc. That may help. Also, ask yourself if there is anything you would do differently if money were no object.
Keep in mind it's better to have a $25 k surplus than a $25 k deficit.

 

[Major Tom]

I think quite a few of us find that the same frugal ways that allow us to ER can also get in the way of enjoying our money.

Your awareness of this and desire to change it is a good first step. Being aware of, and exploring, your emotional connection to money might help as well. You could try resetting your feelings about money in small steps by spending a little more than you normally would e.g. go out for a nice dinner occasionally and allow yourself to enjoy it and get over that feeling of excess that frugal people often experience when spending what they think is "too much money".

Just an idea. If you're not able to tackle this on your own, it may be that there are underlying issues you need some professional help with in order to understand.

 

[W2R]

Individuals who spend a lifetime practicing those skills have a great deal of difficulty changing their thinking. Many simply cannot and you may fall into that category.

If that's the case, then the best thing to do is not worry about it. You cannot have it both ways (save it and spend it) so learn to embrace the frugal you and get on with your life.

I am probably in that category. I can't seem to change my thinking drastically, at least not instantly, so I am just not fretting about it.

I have a lifestyle that is comfortable to me, and I am buying some extra things within that lifestyle, and enjoying life immensely. Really, to nearly double my spending (as I "should", I suppose) I'd have to change/upgrade to a much higher lifestyle and I don't want to. Maybe in time I will gradually be spending more; right now I am buying anything I truly want, but not buying flashy things that I don't really want. That includes travel, which I don't truly want. My present level of spending feels comfortable to me. Life is good.

Besides, I am constantly looking at real estate. Maybe some day I will find a house that I like better than my present house, and if I do, then I just might take care of this problem all in one swoop. So far, I like my present (modest) house better than any of the others, at any price.

 

[Mulligan]

Alex, based on my experiences with like people,I am going to agree with RE. The frugal people I have met in my life, are never able to change. The only way to break a habit, is to create a new one. You could hope that forcing yourself to spend more money would eventually make it easier, but for most people, you are who you are. I have tried repeatedly to get my father to spend some of his money on himself and he won't. I have given up recently after his last comment to my suggestion the heirs will just blow it all. His answer was a quote from another friend who had the same issue "I hope they enjoy spending it as much as I did saving it".
You did mention an aversion to this happening to you. Perhaps some visualization of your heirs blowing it on new cars and vacations, would cause you to act! Maybe start out with some plans that will consume a part of it and still save the rest. There is no crime in saving ones money. If spending it does not provide utility or satisfaction, I wouldn't spend it.

 

[Meadbh]

It's difficult to change the frugal habits that one has cultivated over a lifetime. As we get older, our sense of vulnerability increases, which leads to increased fear and caution. When this is excessive, it represents a form of OCD.

I think that one way around this is to allocate a portion of that surplus to "fun money" or "discretionary spending" or even "why not?". It could be a budget line item, or even a separate checking account. Let's say you deposit 20% of your surplus, or $5000, in that account. When there is an opportunity that would make you happy, whether it be taking grandkids to NYC for a weekend, or going on a cruise, or redecorating your living room, or a charitable donation, you can do it with a clear conscience. And the world will not end. Over time, you could increase the amount you allocate to the "fun money" account, as you see fit.

If you are so obsessed with not spending money that such a strategy causes you anxiety, then I think professional help is required.

 

[CoolChange]

Alex,

I have similar issues with spending money...even other people's money. I am still in a position where I have a basically unlimited expense account; but, it pains me to spend large amounts of that money even when it is not my own. I have also gotten used to being really depressed, sometimes even physically sick, after significant personal purchase even when I knew it had potential to increase my net worth eventually or bring family pleasure: Car, TV, clothes, vacations, etc.

Some things that have helped me enjoy my life more by avoiding some of these feelings; YMMV:

• I have switched to almost entirely credit card and online bill pay. Somehow it does not seem quite as painful when it is just numbers on a screen vs. cash, check, etc.
• Reoccurring expenses do not seem to be a emotionally painful (after initial setup) even though I know they can be more harmful long term to my net worth. Lawn service is an example of this for me: I am not fond of yard work and finally hired a service. Initial decision was painful; but, for some reason, monthly bills are not so bad. Yes, it is a fairly inexpensive service.

Vacations are still a real issue for me: I love to travel; I enjoy both the idea and reality of most vacations and longer term travel; but, spending the money on travel, lodging, etc. is still very painful for me even though I definitely do not spend beyond my means for any of this.

Good luck.

 

[Alan]

The only other suggestion I have is give some though to finding a cause greater than yourself - a group or an individual with needs you could help meet, pain and suffering you could help alleviate - and see how giving them a few bucks works for you. Might be just the thing.

Funny you should mention this because we are in the same situation and I've persuaded DW to spend some money to alleviate pain and suffering on an individual - me.

Before Christmas I could see that this was the 3rd straight year after ER'ing that we are well in surplus and have drawn no more than 1.3% in any given year. We have a trip to Europe coming up in April so I told her than since we hurt so much on those long-haul flights that we should fly First/Business, and for the dates we want it would cost ~$4,400 each instead of ~$1,000. It took a couple of weeks for the idea to take root, and then today she came to me with some figures. If we fly to New York we can sail over to Southampton for $699 on the QE II, returning in September on the Queen Mary, which is more expensive but with all the added expense it is still substantially cheaper to do this than fly Business Class.

Plus, we get 8 days sailing each way with all meals included and entertainment etc. There are even lectures on a variety of subjects we could attend.

 

[REWahoo]

If we fly to New York we can sail over to Southampton for $699 on the QE II, returning in September on the Queen Mary, which is more expensive but with all the added expense it is still substantially cheaper to do this than fly Business Class.

That is really cool! (But watch out for icebergs...)

 

[easysurfer]

Old habits die hard. I can relate. For example, when I go and buy groceries (Aldi, that only takes debit cards, cash or public aid cards) if I put the amount on my debit card, my bank tacks on a 35 cent fee. So instead of just paying the fee (which isn't going to kill me), I find that I walk to my bank branch, do a fee free ATM withdrawal of cash, and pay the groceries with cash. A penny saved is a penny earned. (Well, at least I get a little exercise walking to the bank to do an ATM withdrawal ).

 

[W2R]

Before Christmas I could see that this was the 3rd straight year after ER'ing that we are well in surplus and have drawn no more than 1.3% in any given year.

OMG, I had no idea! You're worse than I am. I have been withdrawing right at 2% so far in retirement.

 

[Tyro]

Wow, that's like a trip to Europe with a couple of BONUS cruises thrown in!

 

[Meadbh]

If we fly to New York we can sail over to Southampton for $699 on the QE II, returning in September on the Queen Mary, which is more expensive but with all the added expense it is still substantially cheaper to do this than fly Business Class.

Plus, we get 8 days sailing each way with all meals included and entertainment etc. There are even lectures on a variety of subjects we could attend.

I think that is a brilliant idea and am considering doing something similar. After all, what's the hurry? You're retired! Life is a journey, not just a destination.

 

[bbbamI]

I've always been a saver and not one to buy things I don't 'need'. That habit is hard to break.

However, life doesn't always turn out the way we planned.

In my personal experience, my DH has been diagnosed with a life-threatening illness. This was a wake-up call to me. The purse strings have been loosened up a bit.

...and see my signature.

 

[haha]

Get a girlfriend. You may become dependent on her, in which case you will suffer but at least will come up with the money to keep her around, thus cutting down your excess monies.

And, you may even get married. Then, although you may still have difficulty spending your money, she will not.

Ha

 

[Moemg]

Funny you should mention this because we are in the same situation and I've persuaded DW to spend some money to alleviate pain and suffering on an individual - me.

Before Christmas I could see that this was the 3rd straight year after ER'ing that we are well in surplus and have drawn no more than 1.3% in any given year. We have a trip to Europe coming up in April so I told her than since we hurt so much on those long-haul flights that we should fly First/Business, and for the dates we want it would cost ~$4,400 each instead of ~$1,000. It took a couple of weeks for the idea to take root, and then today she came to me with some figures. If we fly to New York we can sail over to Southampton for $699 on the QE II, returning in September on the Queen Mary, which is more expensive but with all the added expense it is still substantially cheaper to do this than fly Business Class.

Plus, we get 8 days sailing each way with all meals included and entertainment etc. There are even lectures on a variety of subjects we could attend.

What a great idea !

 

[Alan]

That is really cool! (But watch out for icebergs...)

Hopefully the only ice we'll see will be clinking in our drinks.

OMG, I had no idea! You're worse than I am. I have been withdrawing right at 2% so far in retirement.

It's just the way it worked out. I hung on for about 3 years to get the retiree HI, and the added funds we added plus the fact we ER'ed just after 2008 instead of just before made a big difference.

Between Christmas and New Year I sent an inquiry e-mail to the company in the UK that owes me a COLA'ed pension of ~$11k/year at age 65. (They just went on-line with an excellent site instead of having to do this via snail mail so I registered and sent a secure message).

They replied yesterday to say that because of the date I first enrolled in the scheme, that I reach FRA at 62, not 65. So, that is 3 extra years of ~$11k / year that was unplanned. It's like winning a lottery

Wow, that's like a trip to Europe with a couple of BONUS cruises thrown in!

I think that is a brilliant idea and am considering doing something similar. After all, what's the hurry? You're retired! Life is a journey, not just a destination.

We have never been on any sort of cruise before so we are very excited about it.

 

[Moemg]

I am also frugal and always have a large surplus at the end of the year despite my best efforts . I have LBYM most of my life so I don't think I am going to radically change now. I feel if you enjoy travel you should do it now before you become unable . The thing that I have the most problem with is spending for lengthy travel even though I know if I have spent a lot on airfare it is worth it to stay longer .

 

[Original Wally]

Agree with others - we have a lifelong habit of being SAVERS, then to throw the switch and become SPENDERS is difficult. DW comes from a family of savers. And I, by nature, am one too. So we had a somewhat difficult transition to make when I retired. It took a WHILE, but we are getting there, in our own fashion. We are doing MUCH more, but still doing things... I dunno... on the cheap I suppose.

Our RV - A Scamp Trailer 5th wheel. 19'er. TINY, but it suite OUR purpose. MUCH cheaper to travel by trailer and camp our way across the country. Plus we have a delightful time.

DW subscribes to Travel Zoo and most of our trips are modest. ALWAYS an inside cabin when we cruise.

Car - she DID get a "new" BMW Z-4 in the spring of 2011... well new to HER. I was willing to pop for a brand spanking new one. SHE wanted, and got, an '08 coming off a 3 year lease, and it had less than 30k miles on it. She is VERY happy with it.

We tend to "DIY" around the house. Saves TONS of money.

 

[NW-Bound]

We have always been frugal, but in early retirement might be living right at our means instead of below it.

Yes, without any pension and a few years to SS, 3.5%WR is all I am allowing myself. And that turns out to be about what we have been spending before retirement. Until I have a few years of complete retirement with no earned income under my belt, I don't know if I really have any surplus to worry about.

 

[powerplay]

OMG, I had no idea! You're worse than I am. I have been withdrawing right at 2% so far in retirement.

How low can you go? I think there's another contest in the works here.

 

[NW-Bound]

Well, some people here will even retire very well on 0%WR!

Yes, having a nice pension will let you do that, in contrast with people who manage their own retirement funds. The personal WR has a more real meaning for the latter group.

 

[jayc]

I am with Meadbh on this. Put 80% back in your stash and then reward yourself with 20% of mad money. Try Random Acts of Kindness. Go to a diner where plates are $8-10. Pick 2 people that are eating. I prefer that one is young 10-16 yo. Plop down $40 and say treats on me. Then tell the young one if he wants to feel good a 2nd time give the balance to someone else before he leaves.

You will feel good and you can bet the young person will not forget and at least pass on the story. Cheap thrills.