Guilt Free Spending
Guilt after spending. We’ve all been there at least once and it’s not something that any of us really enjoy. That said, I’ve recently had a major aha moment after realizing that I’ve finally landed in the position of having nearly all guilt free spending in my life.
Now that I’m here, I can say that this is truly a wonderful place to be in. It’s so great that I hope many others can reach nirvana along with me. For my part, I’ll use this post to discuss how you can achieve guilt free spending and have maximum satisfaction with every purchase.
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A Lifetime Of Spending Guilt
It was only very recently that it dawned on me that I was starting to actually enjoy spending money. I first noticed it several weeks ago while on a date to my favorite sushi restaurant. On this date, I ordered my usual which was an expensive platter of pricey sashimi and my guest ordered her fare which included several drinks.
Amazingly, it felt good to spend the $100 – an amount that I definitely considered lavish for a restaurant meal.
In the past, spending money like this would cause a bit of guilt and anxiety. While I knew that I technically could afford the meal, I was also well aware of the fact that I was broke and in debt. Essentially, I knew that I was spending money that I truly didn’t have.
The guilt and anxiety was always small, just a blip on the emotional radar. Therefore, I was always able to ignore it and and continue to bop in life along as if nothing ever happened. I knew deep down that I wasn’t always in the best financial position, but the mind is powerful in helping us distort reality.
And this is probably a great thing for our general survival.
Be that as it may, things are totally different now as the background spending guilt is simply non-existent. While this certainly wasn’t my motivation for getting out of debt and cleaning up my finances, it has been a welcome byproduct.
And now looking back, I can see what I had been living my entire adult life with a bit of background guilt whenever I spent.
But life doesn’t have to be this way!
Where Spending Guilt Comes From
For starters, spending money is a highly emotional process. That is, making purchases can bring on feelings of anticipation, excitement, and even hope. But on the flip side, parting ways with your money can bring on some undesirable feelings such anxiety, stress, and even fear.
As with these other emotions, guilt can also creep its way into the spending process. But the question we are focusing on is why this particular emotion crops up?
From my experience, guilt with spending comes about when there is a misalignment between our thoughts and actions which then produce the undesirable feelings. Let’s take a closer look at what I mean.
Robbing Peter To Pay Paul
My mom grew up in the deep south which means she had a lot of noteworthy ol’ fashioned sayings. Many were great, but the one that always stood out to me was when she would say that she was going to have to “rob Peter to pay Paul” to make ends meet around the house.
In essence, robbing Peter to pay Paul was a metaphor for what I like to call financial gymnastics.
For example, making a mortgage payment due at the beginning of the month may have meant that mom had to write a post-dated check that would hit her account later on that month. Ironically, mom didn’t always have the replacement income to cover those checks and would have to do yet another round of financial trickery to come up with that money. And the cycle would just continue.
I don’t use the above story to disparage mom in any way. In fact, I actually admire her ingenuity in keeping things afloat for her family. Instead, I use that story to set the stage for why I think most people feel guilty while spending.
Spending Delimmas & Cognitive Dissonance
That is, I believe spending guilt is brought on by what psychologists refer to as cognitive dissonance which is defined below.
Cognitive dissonance is a term for the state of discomfort felt when two or more modes of thought contradict each other. The clashing cognitions may include ideas, beliefs, or the knowledge that one has behaved in a certain way.
When it comes to spending, I think cognitive dissonance enters the equation when we do our own forms of robbing Peter to pay Paul. Said differently, spending in certain ways could lead to cognitive dissonance which produces spending guilt.
A real example of this would pop up in my own life frequently in recent times. Throughout my debt free journey, I would often be faced with a dilemma. On one hand, I knew that I wanted to get out of debt and was working hard toward that goal. At the same time, I had another goal which was to find love. This meant that I had to go on dates.
Unfortunately, dating and getting out of debt don’t necessarily mesh well together. As a result, I would often feel guilty about spending generously on dates.
In this example, cognitive dissonance came into play because I had two contradicting modes of thought and knowledge that I was behaving in certain ways.
The first mode of thought was “save as much money as possible” and the other was “spend generously and have fun so I can find a mate”. Consequently, I would feel mental discomfort in the form of guilt because I was trying to move in two opposing directions.
Common Spending Dilemmas That Produce Guilt
The above example is specific to my own life, but there are certainly many other situations that could present spending dilemmas for us all. Here is a list of common situations that likely place us in spending dilemmas resulting in guilt.
- Your spending takes away from you being able to fund your retirement .
- You just used your credit card to make a purchase knowing you won’t have the money to pay the bill on time.
- You have debt that you want to clear, but you also want to enjoy your life.
- Two or more bills are due at the same time, but you don’t have enough cash to cover them all. Therefore, you must pick which bill would be paid first versus which would be late.
- Your goal of saving up for an important purchase is clashing with your inability to actually save the required funds.
- Each purchase makes you nervous because you know you are living beyond your means.
- You owe a friend money, so you feel guilty when spending money around them.
- You generally have no idea where your money is or what it’s doing. But are living your life anyways.
How To Have Guilt Free Spending
You’ll notice that all of the spending dilemmas listed above involve some form of tradeoff between two or more things.
As it turns out, this makes sense as money is a limited resource and most people don’t have enough of it to do absolutely everything they’d want with it. In fact, it’s exactly this scarcity that gives money it’s value in the first place – but I digress.
The question then is what can be done to manage the scarcity involved with money while also taking care of our wants and needs? Let’s address that next.
Organize Your Finances
Organizing your finances is one of the easiest ways to achieve guilt free spending because this step alone will eliminate the ambiguity that can lead to feelings of doubt and uncertainty. Here’s how you can organize your finances in four easy steps:
1) Know your after tax income.
The first step to being organized with your finances is to know your cashflow. Without this, you are spending blindly and cannot avoid feeling anxious and guilty when spending.
2) List all of your bills.
After tallying your income, your next step is to tally your outflows. This step will enable you to be sure your obligations are covered which will go far in alleviating guilt when spending.
3) List out all of your debts.
Debt is like the financial boogeyman that looms in the shadows. You can try to ignore it, but this doesn’t make it go away. Listing your debts actually brings the boogeyman into the light and empowers you to start taking action.
4) Create a plan.
With cashflow, regular bills, and debts sorted – you are now in a position to make a plan of attack. A plan puts you in the drivers set and eliminates a lot of spending guilt because you are are now in command of your money.
A Budget Gives You Permission To Spend Without Guilt
People hear the word budgets and instantly get all clammy because they think that the budget is somehow prohibitive. In reality, a budget is the exact opposite because it is a tool that actually gives you permission to spend freely – albeit within the parameters of the actual budget.
For example, my budget’s ‘miscellaneous’ line item gives me permission to spend the allocated $120 however I please. This can include restaurants, clothes, fun outings, or anything else my heart desires up to that limit.
Similarly, your budget can include line items dedicated to provide you with guilt free spending for the things that are most important to you. The tricky part is just sticking to it!
A simple strategy is to allocate a certain percentage of your monthly take home pay to guilt free spending. A range of 5% – 25% is adequate for most people and you can have all of this money in one pot or broken into specific categories. In general, the amount you allocate should reflect your financial health. Aim for the lower end if you are still fixing your finances and then ramp up as you clean things up.
Fund Retirement First
A great way to achieve guilt free spending is to pay yourself first because you never want to be in a position where you are robbing Peter to pay Paul – and you happen to be both Peter and Paul in the scenario.
More specifically, you don’t want your current spending to cause harm to your future self as you enjoy life now but fail to provide for yourself in retirement. Spending guilt can certainly come into play when you know that you should be putting money away from retirement, but are not. Avoid this by simply automating your investing and ensuring that your savings rate is one that will get you to retirement in style.
After retirement is taken care of, the money left on your checks can be spent with a lot more joy because you can be more assured of your future. This step, combined with getting out of debt, are powerful for achieving guilt free spending.
Eliminate Debt For Guilt Free Spending
Vacations just don’t feel the same when you fund them with debt. Even if you paid cash, having debts that you know you should have taken care of first can taint the joy of a good time.
We humans are unique in that we have the ability to ignore or even lie to ourselves about things that make us uncomfortable. Psychologists refer to this as avoidance coping which is defined as avoiding things that make us stressed rather than facing them head on.
For many, this seems to be the chosen strategy for dealing with debt. Just “ignore it, manage it, and pretend that it isn’t negatively impacting me”. And while this may work as a short term fix, it doesn’t actually solve the problem of being in debt. Therefore, guilt is produced every time one spends money.
All that being said, a final solution for defeating spending guilt is eliminating debt. Once debt is eliminated, suddenly all of the money you earn truly becomes yours without any strings attached to it. No one else has a claim on your money and you become totally free to spend it and enjoy it without guilt.
Pause Before Purchasing
As a quick bonus, I’ll share another pointer that popped up in my own life during the creation of this article.
I happen to be in the market for a pair of sandals after my previous pair finally gave out after nearly a decade of service. I loved that original pair because they were pretty affordable and extremely durable. But times have changed and it’s time for me elevate my footwear game.
That said, the sandals I am now in the market for range from $60 – $160 and I’m leaning toward the ones at the upper end of this range. To avoid guilt and feel great about my purchase I am employing the slow and steady tactic where I really spend my time contemplating, gathering information, and shopping around.
In doing so, I will feel more at peace with the purchase than I would have if I simply bought on impulse.
Guilt Free Spending For All
As can be seen above, the steps to guilt free spending are quite simple. But as with most things personal finance, the execution can be tricky from time to time.
Still, guilt free spending is something that everyone can strive for. And I believe that it’s certainly something that we all can achieve. Happy spending!