If you’re reading this blog, I’m going to assume you’re a bit of a personal finance nerd. No shame! But as a personal finance nerd you’ve been conditioned through hundreds of blog posts published by dozens of blogs to save, save, save your money.
Save for that down payment, save for retirement, save for a rainy day!
Those blogs aren’t wrong. We do need to save our money, especially for big purchases like a house, a car, or a vacation. The alternative is debt, and everyone knows how I feel about debt.
But what happens when we spend this money that we’ve so carefully saved? Down payments and car funds and vacation funds, all of these dollars will eventually leave your bank account. Sometimes, the act of handing over that money can trigger feelings – and not the good kind you see in bank commercials.
Sometimes spending money makes us feel terrible.
Even when we know we aren’t overspending and we can afford it. We still get the feelings.
Feelings of anxiety, loss, fear, even guilt.
So many bloggers have dedicated thousands of words to the topic of saving, but far fewer discuss how to deal with the negative feelings that sometimes come with spending money.
I’ll use myself as an example. I consider myself to be a good saver. Pre-one-incomedom, I would routinely put away between a third and half of my net income every month, but that money wasn’t all going to saving for retirement. Instead, a good portion of that money went towards travel savings, or renovation savings, or freelancer taxes. I was saving that money to spend it on something.
In the past two months, I’ve paid out almost $9,000 between my freelancer taxes and my husband’s tuition. I’ve been conditioned to save for the past five years and letting go of that money hurt. It made me feel a little anxious, and a little vulnerable. I felt the same way when I parted with over $30,000 to purchase my home, and when I bought my car with a $5,000 down payment.
Instead of enjoying the happy moment, these big purchases triggered negative feelings.
The definition of a large purchase varies from person to person. For you, a huge purchase might be a laptop or television. For someone else, spending doesn’t start to sting until the price tag reaches five or even six figures. Everyone is different, but everyone can experience that same level of loss when it comes time to hand over a significant portion of your net worth.
But the fact remains that these purchases happen, and if you’ve prepared correctly, they should be fun situations. If you’ve saved the money, you deserve to enjoy this purchase! So let’s go over how to recover from a massive purchase, how to keep your negative feelings at bay, and move forward with your money.
Step 1: Remember Why You Saved
The first step to combat feelings of financial loss after a big purchase is to remember why you saved that money in the first place. You saved for a down payment so you could afford to purchase a home. I set aside that money for my taxes so I could pay my tax bill without having to worry about where I would get the money.
Most of your money isn’t yours; you’ve earmarked it for future spending. If you look at your money this way, it’s easier to let it go.
Step 2: Don’t Equate This Money with Security
I feel weird about spending money because I still look at all of my money, not just my emergency fund, as my safety net. Even though I have a good job that pays me well and a stable freelance business that earns a decent side income, the number in my bank account is my source of security in this world.
It’s okay – and healthy – to appreciate your money for the security it provides, or to straight-up love your emergency fund. For most people, money is the only thing standing between them and a very, very hard life. But taking this sentiment too far can lead to some Smaug-like tendencies where you want to hoard all of the money – even money you’ve designated for other uses.
To avoid becoming Smaug, you need to remember that your money isn’t your security net, you are your security net. Your employability and money management skills are what is valuable – more valuable than the money in your bank account.
After all, you kicking ass at your job and having the foresight to save that money is how you got here, isn’t it?
Step 3: Remember It’s All Temporary
Finally, it’s important to keep in mind that handing over money and seeing your net worth drop is temporary. You will earn more money and it won’t take long to recover from handing over that cash. Seeing your net worth decrease due to large purchases sucks, but it’s part of life, and, hopefully, you’ll have something to show for that large purchase.
Whether you’re trading your money for a home, a car, an upgraded education, or a laptop, money is a tool you use to get the things you want in life. It’s nothing more or less than that.
I feel this way sometimes over small things too, using our car repair/ oil change account to buy oil at Costco. If I am under on my food budget, I’ll start thinking I can just add this oil to the food bill and leave the car account alone.
But that’s why I have the account for… Lol
I do this sometimes! It’s a bad habit, because that’s the money you budgeted for spending. That is literally what it is meant to be spent on. Don’t deprive yourself unnecessarily in the name of getting ahead by a few bucks.
I think I’m more likely to feel negatively if I think I’m being charged more than I should or I’m taking on debt (like a car loan). If I see the benefit I’m less likely to react badly. For example, I just spent ~$10K on a home reno that I have no regrets over. The reno looks like it’s always been a part of the house, adds financial value, and fills a huge need – and I look at it multiple times a day with a big smile.
That’s good! I think you are right. I’m definitely more anxious about spending money that comes with strings attached like a loan. The window in my office, on the other hand, cost over $1,000 and I didn’t regret that for a moment.
I just paid for dental surgery and Invisalign in February. It was cool to be able to pay for it up front, but it definitely put a dent in my net worth. Stung a little. I’ve nearly recovered now.
I’m very late to the party on this (and a new reader of your blog – hello!), but just wanted to thank you for this post! I’ve been wondering if it was just me. I started getting my financial s*** together a little over a year ago, and while I built a solid emergency fund and saved in a few different accounts for different purposes, the savings goal that started it all was a 10-day summer holiday with friends this year. And it was a great holiday, but I also got such a sinking feeling when I came home and my travel savings were gone. I thought I’d feel proud that I managed to go on an expensive trip without using my credit card, but instead I just felt like “oh – wait, was that it?” Since then I’ve put more effort into longer-term saving and investing, and am finding it so satisfying. However, that “hoarder” thing really struck a cord with me, and I know I can easily lose sight of what the savings are actually for! I’ll need to work on my mindset when I crack open my Christmas Fund next. Saving this post for future reading.