When we talk to our clients, they often mention how spending money feels bad, even though they can afford it. Whether it’s a once-in-a-lifetime holiday, helping a child onto the property ladder, home renovations, or simply treating themselves, their hesitation isn’t about the numbers. In many cases, spending is directly related to the emotions attached to money. We look at this topic in more detail to understand why those with wealth can struggle to spend it.
Why am I not able to spend money?
You’ve worked hard, saved hard, but you just can’t seem to spend it, so what’s the issue? Many successful professionals, business owners and retirees spend years building financial security, but they find themselves questioning significant purchases. Even when their financial plan shows they can comfortably afford it, spending money can feel uncomfortable or even selfish.
Spending money is often an emotional decision. People make purchasing decisions every day based purely on their emotions. It’s not a mathematical problem, as even strong financial plans do not automatically create the confidence to spend.
The reason many high earners and disciplined savers are prone to not spending their wealth is that their identity is tied to caution and control.
Below are some common emotional drivers for not feeling able to spend money:
- Guilt: The feeling that your money should be preserved, invested, or passed on rather than enjoyed by you.
- Loss aversion: This is when spending feels like losing a sense of security, rather than gaining value.
- Scarcity mindset: You’ve formed good money habits during earlier, leaner years and these persist despite your improved financial situation.
- Fear of uncertainty: You might have concerns about future markets, family needs, your health or longevity that’s stopping you from spending.
- Social conditioning: In the UK, it’s a cultural norm to be modest and cautious around wealth. This can lead to people holding onto their money.
Emotional spending habits and behaviours
Our behaviours are driven by our emotions, and this includes our spending habits. This can often show up in familiar patterns, such as repeatedly delaying or downsizing, or seeking excessive reassurance before spending. You might be prone to ringfencing money even though you still feel unable to use it. If you’re a parent, you might prioritise your children’s financial needs at the expense of your own enjoyment.
Below are some examples of when people put off spending their money:
- A couple with a robust retirement plan hesitate to book a long-planned trip.
- Parents able to gift a house deposit worry about “setting expectations”.
- A retiree reluctant to draw down pension income despite clear sustainability.
Why your values underpin your financial plan
Although your financial plan may focus on building and preserving wealth, it doesn’t guarantee your emotional readiness to spend. And this is why your values matter as much as your numbers. Your financial decisions should link to what really matters to you, such as your life experiences, family support, and quality of life. It’s all about making meaningful purchases.
Once you understand your aims and aspirations, you can create a financial plan that’s relevant and meaningful. Your spending aims should form part of your plan, giving you permission to spend intentionally. See our blog How much is enough: Making money mean more for more insights.
Practical financial planning strategies
In today’s uncertain economic landscape, your spending anxiety has real roots, but it’s important to see things in proportion. Pension freedoms and drawdown flexibility can increase choice, but this can also cause decision fatigue. Inheritance tax planning encourages wealth preservation, while rising life expectancy can fuel fears of running out.
If you find it hard to spend with confidence, even when your finances are secure, there are practical tools that can help. You could open a ‘guilt-free’ spending account or try phased spending. You could set clear legacy goals to help you reduce the fear of overspending.
Regular financial plan reviews, cash-flow modelling and Lifetime Wealth Forecasts will help build your confidence and set safe spending thresholds.
Financial Advisor, West Bridgford
The key to financial success is not just about accumulating wealth, but to also feel comfortable using your money to enhance your life. Start by building a sensible financial plan. This will give you the confidence to enjoy what you’ve built, while learning how to balance your life today with long-term financial security.
At Balance: Wealth Planning, our team will talk to you about your aims and aspirations, so we can align your financial plan to your goals. We go beyond simply managing numbers; our aim is to help our clients understand what they want their money to do for them. Instead of focusing solely on growth, we’ll guide you to make thoughtful financial decisions. Using our cash-flow planning process, we’ll give you reassurance about your financial future.
Need to update or build your financial plan? Get in touch to speak to our financial planners.
Sources:
https://www.moneyhelper.org.uk/en/blog/everyday-money/the-psychology-of-spending
https://www.apa.org/monitor/2023/06/psychology-of-spending
