Part I

‘Why do I feel guilty spending my own money?’ is a question that many people struggle with.

The seeds of this article stem from that question I saw posted in an online forum that I really had the desire to address.  When I tried to access the answer page to submit an answer, the user had retracted their question, likely thinking that it wasn’t a valid concern.  I thought it was a very valid concern and I had thought, “I know exactly why she feels guilty” and wanted to help.  So, since I didn’t get to answer the girl’s question, I’ll address it here and hope that she and others who have that same very common concern find it someday.

The question was, ‘Why do I feel guilty when I spend my own money?’

The answer is simpler but less obvious than one would think.  In our society today, money is a necessity.  You need money for rent, a mortgage, utilities such as water and electric, a car loan, car insurance, bus fare, food at the grocer, and that only addresses your needs to support a comfortable life.

If you are gainfully employed your work produces a cash flow at a more or less constant rate.  That rate of income, whether from one job, several jobs, or a business along with investment income settles into a steady rate of income over time.  That cash flow is what a person should monitor in a budget to see how much comes in, how much needs to be paid out to cover necessary expenses, and how much discretionary income is left over for one to enjoy and support a lifestyle.

I believe guilt comes into a person’s spending habits when, thinking that they have discretionary income to spend on products or services to support their chosen lifestyle, a person doesn’t really know if the money they’re spending really should be serving another purpose.  If we don’t monitor our income and cash flow, we don’t know how much money is available in total as cash flow for us to work with.  We don’t know how much money needs to be spent to cover our expenses and service our debts if we have made them.  We don’t know how much money is left over to enjoy and support a lifestyle in which we can buy our wants that make life more enjoyable.  Some might estimate rather accurately, and some people have a good feel for their finances, but unless you prepare a budget and actually do the 5th grade math, you don’t know for certain.

To have peace of mind rather than guilt or doubt, you need to know.

There are many things that you should do on faith, using your debit card should definitely not be one of them!  Not knowing where you are financially could leave you lost or confused emotionally when it comes to spending your money.  I think subconsciously your mind is working to balance the equation; that balance of cash flow and expenses.  However, since you haven’t written a budget and determined exactly what the answers are to cash flow, necessary expenses, and discretionary income, your mind doesn’t have the answers to decide whether the money is yours or should be used for some other purpose.  That dilemma, registering and being felt subconsciously, surfaces as guilt because you haven’t given yourself the real information to free yourself of it; the knowledge that your expenses are covered, your financial goals are planned for and have been funded, and the money you have in your pocket (or in your checking account being accessed by your debit card) has no other draw upon it other than what you have chosen to spend it on.

I’ve said this in the text of my book, MoneySmart Personal Finance Solutions, 2nd Edition, but I’ll reiterate it here.  “It’s your money that you are working for; don’t you think you should keep some?”  A budget isn’t a constraining instrument that limits what you get to do with your money.  A budget is your instrument of freedom that allows you to plan purposes for your cash flow so that it can be used in the most productive fashion possible.  Running a monthly budget allows you to track cash flow, monitor expenses, plan for future uses of your money through financial goal setting, and also allow yourself money to spend as you wish.  When you know that the money you have in your pocket doesn’t have anywhere else to be but in your lap, smothered with butter and a dash of salt, in front of the latest movie release, then there’s no guilt.  The money you spent to be there is yours, you know it, you’ve chosen to spend it that way, and you can enjoy it; guilt free.  Spending money that you have earned and want to use for things that you want should be a joy.  You worked for it, you earned it; celebrate your success and accomplishment!

However, if you want that mental, emotional, and psychological freedom to enjoy what you earned without internal conflict or guilt, then you need to know what’s happening with your money.  To know, you need a budget.  To build a budget, it would really be much easier if someone would organize all the details for you so you didn’t have to figure it out yourself.  When I wrote the MoneySmart…Solutions book, that’s exactly what I did.  Organizing all those sticky details is exactly what stops most people from making their own budget!  The organization is all done.  All that’s left for you to do is fill in the blanks with financial information, and add it up!  Goodbye guilt!  Hello wealth!

Be certain to check out my article or video on “What is Wealth” so that you fully understand that last ‘Hello wealth!’ statement!  In Part II of this article we’ll cover… Your power of decision over your money, and where to find more of it!

Jump to Part II

Back to Part I

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