Guilty Money: How Much Do You Have To Spend Frivolously Before You Feel Guilty About It?

Over the weekend, I had an IM conversation with an old friend of mine in which he stated that he felt guilty about spending $50 on a video game. This led us into a lengthy discussion about frivolous spending and guilt, and we found that his guilt threshold is substantially higher than my own. I tend to feel I’ve wasted money each time I spend more than about $5, while he generally doesn’t feel guilty unless he spends $50 or more.

Very interesting, I thought, so I conducted an informal poll of several people asking how much they have to spend frivolously at once before they feel guilty, and what did I find? There was almost a direct connection between their debt levels and the amount of money they felt guilty spending on frivolous things.

In almost every case, the higher the debt level, the higher the “guilt money” level. This wasn’t surprising to me: people who spend more than they earn tend to have an inflated sense of how much spending money they have and thus their concept of what they can reasonably afford is inflated.

What is surprising is that in almost every case, the lower the dollar amount that triggers guilt, the better the financial shape of the person. This is completely independent of income, actually – I tend to be among the high end of the people I surveyed in terms of income, but my “guilt level” is actually much lower than most respondents (sadly, it used to be very high). The result? My financial ship is pointed in a very healthy direction.

What can be learned from this?

First, evaluate all of your individual frivolous purchases. Look at your last few credit card statements and identify the ones that made you feel guilty after the purchase. What sort of spending threshold do you have to cross before feeling guilty?

Next, concentrate on those purchases that are expensive enough to make you feel guilty. If the purchase is more than that dollar amount, ask yourself whether you really need it and think about the feelings that other such purchases have generated.

After that, focus on questioning your smaller purchases. If you don’t feel guilty buying a hardback book once a week, ask yourself whether or not that $20 each week might not go to spectacular use somewhere else. Remember, that’s $1,040 a year, enough to partially fund a Roth IRA or make a big chunk of an extra house payment.

Remember, guilt can be a powerful motivator if it’s actually used for positive change. Don’t try to ignore it, but welcome it as a method for your psyche to give feedback on the things you’re doing right – and the things you can improve on.

Just for kicks, how much money is your “guilty money”? If you want to, share it in the comments.

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