I spend too little and save too much

Maybe it sounds crazy, but I've got to be able to spend at least a little bit of money.

Published January 30, 2006 11:57AM (EST)

Dear Cary,

I have a problem with money. It's that I'm a tightwad and I'm unsure how to convince myself not to be cheap. My husband is an engineer -- making good money, but nothing like an investment banker, lawyer or doctor -- and I stay at home taking care of our two small kids. We are in our mid-30s. Through my frugalness (not savvy investments -- I haven't been smart about any investment thing), we've managed to save about $300,000. When the holidays come around, I find myself in the shopping mall with list in hand and basically getting this feeling that I cannot buy this person a sweater from the Gap. I am sunk, knowing that yet again I won't be able to pick up the sweater and bring it over to the cash register and pull out my credit card. What gives? I do do better when I have a specific request from the person, but there is some lameness in that...

But it isn't only the holidays; oftentimes I can't buy a needed sweater for myself. Why can't I spend the $40 for a sweater when it's freaking cold in the house? The same goes for anything I count as a "splurge" for myself -- an ice cream cone, someone to help clean up the house, a Coke with a meal out...

This is starting to get silly. I have about 10 items in my closet, five shirts and five pants, all bought on super-sale. I have one pair of shoes. These are material goods, but sometimes I feel like I'm missing out on stuff because I won't spend money on yoga class or cooking class or gym membership or things like that. I justify it by saying we'll need the money later or that I'm a homebody, but I feel like I'm becoming more isolated in my own weird tightwad world.

Little Spender

Dear Little Spender,

I'm sorry I didn't get to your letter before the holiday season was over. That's a time when many, many people feel stressed about spending -- although the majority have the opposite feeling: They're stressed about spending too much rather than too little. At any rate, if you feel stuck about money behavior, it can affect you all year round.

First, I must say, it's really impressive that you've saved $300,000 on one salary with two kids. In fact it's amazing. You must have been extremely rigorous in your control over the money. But now, since this practice of avoiding spending has become a problem for you, it's time to make some changes.

My first suggestion would be that you write out a budget. If you've never done it, find a guidebook on personal finance that you like -- if you can't buy the book, then check one out from the library.

The value of a budget, for someone who has difficulty with spending decisions, is that it's an external reference. You decide what you're going to spend ahead of time. Then, in the moment, faced with an expenditure, when you're becoming anxious and about to freeze up, you ask yourself: Is it in the budget? If it's in the budget, you buy it. If not, you don't.

Making the budget allows you to make important decisions when you are calm and have the time to think them through. That way, you can budget a fixed amount for activities that might seem frivolous but are actually important to your overall health and happiness. The activities you mention -- yoga class, cooking class, gym membership -- are fun, certainly, but also, from a practical standpoint, might be considered forms of health maintenance. If you must justify them monetarily, you could compare the possible costs of major illness to the cost of participating in these classes and determine that such classes are a good investment. But it's not just about saving money by avoiding catastrophic health risks; health and happiness also have an intrinsic value.

Likewise, the giving of gifts, while not in a strict sense essential to your biological survival, is a bonding behavior that strengthens family and community ties and helps ensure good relationships. And these relationships, in turn, can be absolutely vital to your survival. So this practice, like going to a gym and taking yoga classes, could be seen as a kind of health maintenance. But again, there is also an intrinsic value that ought not be overlooked: Love and the pleasure of making others happy are good things in themselves.

You can always amend a budget. So there's nothing that you absolutely can't have. You just have to budget for it.

It sounds marvelously simple, and it is, although simple is not easy. What if you cannot make a budget? What if the whole idea is just beyond you? Well, you may need to spend some time working with a therapist. But what if your inability to spend money prevents you from seeing a therapist?

If you cannot spend the money on a therapist, then I suggest trying some kind of free counseling or support groups for debtors. I know you are not a debtor. You are just the opposite. But I have a hunch that, paradoxically, you have certain things in common with overspenders -- the same kind of nervousness about money, for instance, the same anxiety, the same worry about the future, the same feeling that you're out of control.

So first try to make a budget and stick by it. Put in there some things that are just enjoyable and fun. Go over the budget with your husband. Try living by it. And, like I say, if you can't do that, then seek some outside help.

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