Spending Far Less Than You Earn

Quite often, I talk about the value of frugality and

spending less than you earn. For many of us, that’s a valuable mantra to repeat, because our tendency is to spend more than we should. Our challenge is to avoid spending, and we have to carefully talk ourselves out of it.

Yet there are those out there with the opposite problem – they almost can’t make themselves spend money. My best friend is like this and, interestingly, he’s getting worse as time goes on, seemingly getting tighter with his money. A reader, Stella, writes in with the same problem:

I’ve read a lot about not spending more than you earn. But I have the opposite problem, I cannot make myself spend money. I can talk myself out of any purchase. I have no problem grocery shopping but when it comes to clothes or major purchases I just can’t seem to drop the dollars. The frustrating part is that the money is available for the purchase. It drives my husband crazy. Case in point, our 18 year old refrigerator door is broken. It does not close on its own and must be pushed closed. My husband and I went looking for a replacement and found a good deal at an appliance outlet. I liked the new refrigerator, it would fit in my kitchen, it matched all the other appliances, it was plenty big for our family and would be much more energy efficient than the existing frig. My husband was ready to buy it right then but I said I needed to think about it. Why can’t I just say “OK, let’s buy it.”? Why do I have to talk myself into buying everything? I would love to know if others face this love/hate relationship with spending.

First of all, it’s important to recognize that this is a real problem. Some people will scoff at this and think, “I wish I had that kind of willpower,” and I’ll admit that I do respect such willpower. However, it can go too far when one’s aversion to spending begins to interfere with everyday life, particularly when you easily have the financial means to solve those problems.

One aspect of this condition is that it is usually connected to a reasonably large bankroll. When you have an aversion to spending, that money’s going to go into the bank, so it’s reasonable to believe that people with this condition would have significant cash in hand.

So how do you get past this problem? Here’s my advice.

Recognize that you may be overdoing it. For people in this situation, the ten second rule is ingrained – they naturally try to think of reasons to not buy the item, to the point that they talk themselves out of reasonable or even essential purchases. Instead, turn that ten second rule around – realize that you are overdoing it and think about reasons why you should buy the item.

Let yourself trust the people worth trusting in your life. Do you trust your spouse? Do you trust your best friend? These people know you – they know you don’t like to spend money without reason. If they’re encouraging you to spend, it’s likely because there’s a very good reason for it. Listen to them, trust them, and take that leap.

Set aside some money that you’re willing to spend. Instead of stocking every dime away into a giant retirement or investment account, create an account that’s solely there to make purchases. Put some money in it automatically and think of that money as already spent. Then, when you need to make a purchase like Stella’s refrigerator, you can just take this “already spent” money and replace that fridge.

Most importantly, don’t feel guilt for the choices you make. Stella’s obviously feeling some guilt. What I’ve found over and over again is that if you make choices that lead towards minimal guilt, you’re usually doing the right thing for you. When I spend too much, I feel guilty, but when I don’t spend enough, I feel guilty, too. The right amount is somewhere in between, and that’s the sweet spot we should all strive for, regardless of what side of the hill we’re on.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.