Personal finance and personal guilt

August 2, 2008 4:45 PM

Please give advice on dealing with money and guilt about money. [Long question.]

How can I learn to feel less guilty about financial decisions, trust my judgment about money, and have faith that I can support myself?

There is some evidence that I am pretty financially responsible. (I am going to give some details here, so you can judge for yourself.) I am currently in my 30s. In 2000 when I finished school my net worth was about -$20,000 from school debt. Now my net worth is just over $200,000. My first job out of school paid about $30k per year; I have worked my way up and now earn about $90k. I worked hard to be frugal and saved $10,000 my first year working. I have good job security. I follow most recommendations for good finances. I max out my 401(k) and Roth IRA, and save some extra outside of that, in good investments that I understand (mostly low-cost index mutual funds). I have an emergency fund. I have a house (an affordable one, with a 30-year fixed rate mortgage). My mortgage is my only debt. I have good insurance, including for the house, car, health care, death, and disability. My accountant says I'm doing well. I'm generous with friends. I give money to charity; currently about 2% of my take-home pay but I'm working on increasing that.

Despite this I feel very insecure about handling my money. I frequently read news, posts, and questions here and on other sites about people with debt spiraling out of control, going into foreclosure, being unable to control their spending, etc. I overidentify with these stories and am convinced this will be me any day. This is in part because my family was financially irresponsible and unstable, and I fear being back in that environment. There are several practical consequences of this mindset: I worry too much about money. I feel very guilty whenever I buy something indulgent for myself, like I am bringing on financial ruin. I think, for example, I have too few nice clothes I can wear to work, because buying nice things makes me feel guilty. I can afford to let go of some of my frugal habits, but I feel guilty when I do. It's hard for me to let myself go out to eat. I haven't really decorated my house because I don't think I deserve to replace the 15-year old ratty couch. Recently I did bring myself to buy a unique, well-designed, durable, and comfortable chair that cost $3,000 - but only after I saved up for it and agonized about it for a year. I love it and will use it for years, but I still worry it was a wasteful decision. And so on.

I also think it's a waste of my time that I spend so much time reading tales of financial doom and imagining it is happening to me. The simple answer would be "just stop doing it", but that's hard. Almost every month I use an online calculator to forecast how much money I will have in retirement, and it always says I am on track to have enough money. Yet I still feel anxious about it.

I know that you think I should see a therapist; trust me, I already have one. I'm looking for other suggestions that are outside the therapeutic paradigm, if that makes any sense. Often mefites have great, creative suggestions and approaches that I never would have thought of - that's what I'm hoping for here. For example, just getting random strangers' take on my financial situation (do I seem financially responsible? will I go bankrupt like my parents did?) could help.

This related post was helpful, but more insight would be appreciated.

posted by anonymous to work & money (20 comments total)

I don't have any answers for you. But I wanted to say that you're not alone.
posted by FlamingBore at 4:53 PM on August 2

Apply logic. You are in the top 5% of the wealthiest people in the world. If you lose your job, your insurance will pay your bills. What can possibly go wrong? I can't think of anything. Therefore (I'm sorry, but I think you need this), you're being self-indulgent and hysterical over an impossibility. Secondly (this bit is nicer), if you came out of school with a 20 grand debt, and in 15 years or so amassed $200 grand in assets, you personally can handle anything. Seriously, you can.

So lastly, if you don't have a budget, write one up. That way you know exactly how much you can spend on clothes, holidays, indulgences etc. Then go and spend the money and if you start whining to yourself, say, shut up self, I earned this money, I am spending it responsibly.

If you're still looking, check out what David Burns says about catastrophising.
posted by b33j at 4:55 PM on August 2 [1 favorite]

Allow me to wax on for a moment, since you're problem is one that I've been grappling with for a while as well (though I'm not as far along as you in the savings department).

For years now (3 to be exact) I've been meticulously "taking care of my life". First and foremost, constantly educating myself, by taking classes, reading various academic papers, and incessantly asking questions about everything. I've felt good about my progress, though I'm always, always under the angst that it's never enough. I could do this better; I should've gotten that job; I need to work 10x harder to get to that next step I'm seeking, etc. (you get the picture). And so far, I've seen a lot of progress.

This past year, though, was one of the roughest I've had in years. I quit my job without having one lined up; I ended up paying thousands for a crappy landlord/tenant situation which every lawyer I've spoken to has said is not my fault; I faced monumental rejection in one of the hardest job markets in decades (for my field). And I couldn't finish an academic project that I'd been very excited to do (I had to postpone it).

I was depressed; miserable; doubting that I made any progress at all. I felt that I reverted to my former self, and that my life was unwinding.

Funny thing happened though; I got another job, moved to a new city, making more money now than previously (in a city with a significantly lower cost of living). Colleagues are great, work is starting to become very interesting, and I'm golfing 2-3 times a week with a new car I bought.

The point to all of this is that it taught me a very, very valuable lesson: I have worth. I've worked very hard, accomplished a bit, and rain or shine, I have value. That's what you need to remind yourself of. You need to look at all of your accomplishments, look at all the hardships, and realize that in spite of the pain, and with the joy, came a great life that you've setup for yourself. And that it's just the beginning. Your 20s are so ridiculous, since there's so much to learn, you know so little, and you never know who you can trust. But you made it. And even if you confront failure again, you know you can make it again. Always remember that.
posted by SeizeTheDay at 5:12 PM on August 2 [1 favorite]

Yup, set up a budget.

In that budget, include a line item for "What the fuck ever I feel like". Make it a reasonable number--take your real costs per month (necessities and a reasonable discretionary amount) and see what you have left over. I'd be willing to bet that you have a gap between 'left over' and 'save'. Take a couple percentage points from 'save' and put it in your 'whatever' amount.

Then spend that as you wish. Some months will be nothing, some months you'll spend the carry-forward amount. To make things even simpler, put it in a separate account--that's your mad money.
posted by dirtynumbangelboy at 5:13 PM on August 2

You sound very, very financially responsible. Prudence and thrift are good things. I envy your hard working and financially sound bearing.
From your intro, it does not sound like you will ever face bankruptcy. Stay away from extreme drug use and compulsive gambling and you'll be fine. I'll tell you, money-wise, you sound set.

As far as allowing yourself to have nice things or experiences, think about this - you bought a quality piece of furniture in a responsible way (saving). Over time you'll notice that it did not bring you financial ruin while it did bring you comfort and pleasure. Think of it as your first parachute jump with the instructor tied to you. It is a good chunk of money you spent, but you didn't go into debt - you will see that you won - you made the jump.

I'm not suggesting that now you should believe you can fly and don't need a parachute, but with practice and care will come skill and trust that your ducks are in a row and you would like, and will permit yourself to like and want to spend money on something - an experience, an object, whatever.

Agree on a budget with a line for mad money and believing you have worth.

I will say that you should flat out stop reading about financial doom and gloom. Sounds like your pr0n. Stare at nudie pics all day and it'll affect your dealings with relationships, read about people losing it all constantly and you'll believe that it happens to everybody. It'll be hard but it ain't helping you. You are already prudent. Toss those books - donate 'em, whatever. Put the time (which is money) into something else that you enjoy and that gives back positively to you.
posted by asparagus_berlin at 5:18 PM on August 2

I don't know if you're a woman, but this sounds like "bag lady syndrome." I think it's common for many independent women and people, like you, who grew up in financially anxious homes.

I second b33j's advice about a budget but, if I can add a twist, I suggest doing a retrospective budget. That is, track what you spend things on for about 3 months. For one thing, it's muuuuch easier to create this than a forward looking budget, which I think begs the nervous questioning you're beset by now: how much should I spend on this? what about this?? I think a backwards looking "budget" gives you a nice view into what you really enjoy spending money on and lets you then create a realistic budget that you can maintain going forward (this assumes that you're living within your means, as it sounds like you are). My online bank has a graphing feature and Quicken does this well, too. If you can translate your worry about money into a nerdy interest in your money, it may be just the thing.

The other thing I might recommend is a fee-only financial planner. You can afford one, and it would be just the informed, independent, other party you're looking for to provide a reality check. I'm by no means rich, but I meet with a planner 1-3 times a year and it's really helpful--not especially because I'm making fancy trades or maxing out accounts, but because I don't have to worry that I'm way off base, and I know I'm doing due diligence. Meet with a few so you can find one who really suits you.

Good luck. As FlamingBore said, you're not alone.
posted by cocoagirl at 5:18 PM on August 2

I think you definitely need to just relax a bit. You've clearly built up a great cushion and you use very intelligent fiscal policy when you approach things in life.

Take a look at my scenario: I have about $30k in debt (owned by my business, with my partner, but still my debt). I also have about $20k in cash or investments and maybe $5-$8k in assets. I'm kinda panicy about it occasionally, because running the business is hard and I'm not in my own house yet and my salary isn't what I want it to be yet.

And I occasionally enjoy myself still and don't save *quite* as much as I should.

Here's what I do to help manage that: Set your budget and include IN your budget some discretionary income. Make it a decent amount; money that you blow because you've worked hard and you deserve it. You're still paying your bills. You're still paying into requirement. You're still paying into the emergency fund. You're still paying into your regular savings.

So take a chunk of that; maybe just $500 a month, maybe more or less, and put that into a fun account. Use that to save up for things and pay out of it good times. Saving up for a rainy day is no fun if you don't use ANY of the money for anything fun, ever. Life is a lot of work and you need to relax and realize that you can have it both ways: properly budgeting your discretionary income will still allow you to use discretion and not panic about pampering yourself a bit.
posted by disillusioned at 5:20 PM on August 2

I used to be in your boat. I wouldn't buy basic necessities. I didn't have a computer (could mooch off friends or go to the library), I would take books out of the library (not worth buying a book at a bookstore if I only planned to read it once), I wouldn't buy new clothes (felt that I didn't deserve them because I was a little overweight). You get the picture. Two things have helped. First, I've worked through a lot of the insecurities and crap from my childhood which has really helped with my self esteem. This new self esteem has made purchases feel deserved and enjoyable. Secondly, my fiance is a bit spendy. This has forced me to loosen up a bit as I've had to compromise on some shared items. I can promise you, though, that I am still careful about finances. I didn't lose my ability to be careful, I just became a little less rigid. Finally, I have a large savings account that I almost never use and knowing that I have it is my ultimate safety blanket.
posted by rglass at 5:29 PM on August 2

Well, a variant of "pay yourself first" would work:

1) Figure out what you regular living expenses are: mortgage, utilities, food, insurance and so on. Calculate what that will be as a percentage of your paycheck. Round up a little.

2) Figure out what you need to put in your IRA, 401K and emergency savings out of each check.

3) Figure out what you want to give to charity as a percentage of you check.

4) MOST IMPORTANT: Calculate what's left. 90% of this amount should go to your "leisure" budget. (The rest goes in a sort of extra-emergency "slush" fund.)

You're obviously smart and hardworking. The point of the above is that you figure out what you NEED for savings, expenses and so on. What you're really doing is creating a budget for your own fun. If you *know* you have $250 a week (or whatever) that you *have* to spend, you might enjoy it more and feel less guilt. The rule is you CAN'T apply it to bills or savings or give it away. You HAVE to spend it, or budget it towards something specific, like the chair you mention.
posted by Dee Xtrovert at 5:30 PM on August 2

Dude. I commend you for being a responsible adult and for doing an admirable job of saving towards retirement. At 65. In 35 years. But the reality of the cosmos is that you could get hit by a bus at 50. Or 40. Or... 30.

In which case, all of this obsessive savings will have been something of a waste. While it's important to have a fun and comfortable retirement, you need to have a fun and comfortable life. The whole thing, including, you know, now.

Go buy a couch already.
posted by DarlingBri at 5:38 PM on August 2 [2 favorites]

My wife is a certified money coach, she sees and helps this kind of thing everyday. She helps folks transform their relationship with money (couples, singles... kids too) who carry around a lot of unconscious money anxiety.
I'm not mentioning this to spam you and MeFis. Perhaps there is someone in your area who does this?
posted by artdrectr at 5:52 PM on August 2

Here are two random suggestions for whatever they're worth:

First, along the lines of the "what the fuck ever" budget line item, look at spending money "recklessly" as what you're paying to heal yourself. You're spending money on a therapist, right? Well, on the one hand, imagine you have to spend that money for years upon years upon years. In 2011, a therapist shortage happens, they become extremely expensive, and all insurance plans stop covering them. On the other hand, you give yourself a year to heal your guilt complex by completely wasting $X a month. You buy clothes, shoes, furniture, your friends' drinks, whatever: pure indulgence! You must spend it! At that point, once you've gotten over your instinctive fears about spending money, you'll make a reasonable budget for yourself. What's the $X that makes it come out ahead? :)

Second, it sounds like you are not spending money on things that even from a financial perspective, you probably should be spending it on. Clothes. Shoes. I'm guessing haircuts. Could you negotiate yourself to a more reasonable position by proving to yourself that these are bad financial decisions? Being nervous and guilt-ridden makes people pre-occupied and makes them worse conversationalists than they'd otherwise be. Being well-dressed makes people seem like executive material, meaning they get faster promotions and higher raises. Would being able to invite your boss and his/her wife/husband over for a "thank you" dinner once a year help you seem more like an equal? Would that subconsciously affect his/her decisions about your compensation? Also, stress raises your chance of things like strokes and heart attacks, so it risks impacting your expenses as well. Try some numbers here and see whether easing up on yourself would actually be a financially-sound decision.

Last, I just want to say that the type of insecurity and worrying and over-control you have seems fairly common to me. I have two friends who are semi-control freaks about certain things where their parents did not act like adults and provide security for them as kids. For them, it's just a fact, and they've grown comfortable with the way they are. But they've learned to override certain of their tendencies. Maybe you should develop some external standards and start applying overrides. (Two hours max a week reading these stories. You must have eight work outfits for every season. You must have an apartment you could invite your boss to. Stuff like that.) Anyway, best of luck. Let us know how it goes if you can.
posted by salvia at 6:18 PM on August 2

Whenever I have an irrational fear that I'm going to spiral out of control in some area of life, I use the paradoxical approach. I deliberately try to do the thing I'm afraid of.

For example, lately I'm trying to be less critical, but fear that I am going to slide into a morass of mediocrity, accepting anything and everything. So the thought experiment goes, "Ok, for the next 10 minutes I will be happy with how everything is, and not think of improvements." About 2 seconds pass, and I think, "That woman's haircut is aging her 10 yrs." Damn! Try again. A couple more seconds pass, and then a critical thought creeps in about somebody's parenting. Or whatever.

Eventually it dawns on you that you CANNOT do the thing you're afraid of. I don't have it in me to accept everything. You don't have it in you to be a spendthrift. It's ok to move a little in the direction of the thing you fear. You are not going to inadvertently change your whole personality.

Also - you have to ask yourself - what is this fear doing FOR you? People don't do things for no reason. If you identify what positive role it's playing in your life you can try to meet that need in other ways instead of being trapped by the fear. Good luck.
posted by selfmedicating at 8:36 PM on August 2 [1 favorite]

Agreeing with the consensus that you seem perfectly responsible. I believe you will be fine with the occasional indulgence.

In your background, you haven't mentioned any life partner or children. That is a factor that could conceivably change the course of your financial future. If you plan on extending your family, your expenses will increase considerably. Your budget will completely change. Your saving for the future will involve a lot more than just retirement.

As you ponder your personal budget, make considerations for what kind of a family you hope to eventually be a part of, and what you wish to achieve with them.
posted by netbros at 8:44 PM on August 2

I died 3 times on July 6 2004. A bunch of heart attacks, legacy from my maternal genetic material. I was in great shape -- bike rider, swimmer, fair diet. This thing came out of nowhere.

Amazingly, outlandishly, the people here at Brackenridge hospital were willing and able to work long enough to get me back each time I checked out. My cardiologist put in a stent and resolved the problem, but I was so traumatized by being dead so long that first time that I kept on dying.

We all know how many grains have fallen through the hour-glass but not a one of us has a clue how many are remaining. This thing is finite.

I told you that to tell you this -- buy the couch. Buy yourself a hat. An ice cream cone. A new yoga mat. You are clearly a solid citizen, you are one of the most fiscally responsible people around, it's clear you're not going to go mad and throw all your bread away on a collection of porcelain poodles or whatever.

I haven't a pot to piss in nor a window to throw it out of (okay, I do have a pot and a window but they're small ones) but I'm so goddamn glad to be alive, and living in Austin to boot, that it's hard to express. And I've met a number of other people who have also crossed the divide and made it back and we're of a consensual mind on this -- life is one beautiful son of a bitch.

Seen from the perspective of laying dead in the ER while they're blasting your chest to get a heart beat going again, this business of couches is small potatoes indeed. We get bent out of shape over very high class problems, not noticing the sand falling all around us, but believe me, it is falling.

Keep away from the porcelain poodles, and like that, but buy what you want, and enjoy it. And tell everyone who you love that you love them, hell, they can sit on the couch with you -- Fun! (That last is sortof unrelated to your post but worth saying anyways, IMO.)
posted by dancestoblue at 10:57 PM on August 2 [14 favorites]

Salvia makes a great point. Wear whatever knock around clothes you want at home, but consider that your appearance in the workplace makes an impression on those around you, and investing in some good clothes is likely to be a financial advantage to you in the long run, because it is one more thing that will help you move up the ladder, thus, get more money. Unless, of couse, you are in one of those peculiar science or IT workplaces where the culture is, you would be taken LESS seriously if you dressed nice. In that case, don't. :)

But otherwise.. if it makes you unhappy to buy a lot of stuff, then, is it OK with you to just not buy a lot of stuff, and therefore not be unhappy about buying it? Or are you feeling bad no matter what - guilty for not buying nice things, and guilty when you do buy them? If you only feel bad when you buy stuff you don't really need, and are content to make do and be frugal, then... what is the problem? There is no problem. Just keep being frugal, and be happy. It's fine.

If you are content spending your leisure time doing things that don't cost much money, and would feel guilty about splurging on a fabulous vacation, then don't splurge. Maybe at least try that attitude for a while: "I'm going to be frugal, and not feel guilty about being frugal." It seems to me that if your family was a financial disaster, you should double-extra-congratulate yourself and feel proud of yourself for being smart about money, because you are. Believe me, another outcome of families that are financial disasters: spending nearly every dime you have on nice things and random things, because you feel guilty about having money, like you don't deserve to have it. So, it could be a lot worse.
posted by citron at 12:51 AM on August 3

BTW, I don't know about a bunch of bloggers, but Suze Orman, as over-the-top as she can seem, says some pretty savvy things in her books about psychological attitudes toward money & definitely addresses issues like feeling guilty & not deserving to have any wealth. So, I recommend.

Maybe it would make you feel better if you asked yourself, "What's the worst that can happen?" (reasonable answers only, eg, job loss, disability, some sort of act of nature that might wreck your house, etc.) and just run the numbers based on your assets. For instance if you lose your job. And can't get another job for months, maybe even a year. What's the worst that can happen? You have an emergency fund for all that time? Great, there is no problem. You get injured and can't work, and are on disability? OK, how much money would you get a month, and would that cover your mortgage payments (given that you know they will never change), and could you get by - given that you know how to live a frugal lifestyle already? Well, ok, there is no problem. Stock market goes to hell? Gas goes to $10/gallon? Well, what would happen then? You are young, have a good paying job and can afford to wait for the market to recover, since it's a long time to retirement? OK, then there is no problem.

Another word, though, as long as I'm going on. I do advise working on sorting out feelings on deserving nice things. And the advice on setting a strict budget of "fun money" is good. Make it small if that helps, but spend it, but sticking to the strict budget is the key thing. It occurred to me that I went from feeling guilty over every last dollar I spent, to being easily able to spend every dollar I earned - maybe they're flip sides of the same coin, so to speak.
posted by citron at 1:05 AM on August 3

You should read cocoagirl's bag lady syndrome link, because that's exactly what we;re talking about here. The budget line item is a great (and essential) suggestion but I understand addiction to personal finance information. Maybe rather than going cold turkey, you should spend the time you devote to reading about financial planning reading about investing strategies. Or reading columnists/bloggers who are successful and confident and write from that perspective.

I too am fairly boring and solid financially, and I too read a lot of personal finance bloggers and columnists, because I find it interesting. Yeah, a lot of them have to focus on the lowest common denominator (or are in serious debt themselves) so the content is debt repayment, and people lacking emergency funds, and foreclosure, and berating people with poor finances, and various disasters of one type or another. But some write from the stance I mention in the first paragraph.

I lived in NYC during the 11 Sept attacks and remember being hooked on political blogs and local newspapers and running into almost a panic attack. Once I stopped consuming that crap I felt much better. I think you might too if you adjust what you read.
posted by jamesonandwater at 6:54 AM on August 3

You have $200,000; good job security; a maxed-out 401(k); a maxed-out Roth IRA; extra savings in low-cost index mutual funds; an emergency fund; a house; house insurance; car insurance; health insurance; life insurance; and disability insurance. Your only debt is your mortgage.

Your problem is that you believe you will have spiralling-out-of-control debt; you will be foreclosed upon; and you will be unable to control your spending.

Your beliefs are completely ajar from the reality of the situation. You have a firm belief that the sky is green when it is blue.

You're seeing a therapist, but he or she is not helping you enough to rid you of these feelings and/or obsessive thinking. You need to tell your therapist that the techniques he or she are using are not helping you.

I also note that you say that "just stop doing it" (where "it" is reading the tales of financial doom) would be "hard." At the risk of sounding impatient, of course it would be "hard." Attacking anxieties, fears, and irrational thinking that's been zooming around in a vicious circle is always "hard." You obviously expended a lot of energy and effort to raise your finances $220k in eight years (you use the same adjective earlier where you state you worked "hard" to be frugal, etc.). Now, you need to apply that same energy and effort to your head. Including just stop doing it.

It also might help to force yourself to view the situation in a different light. Imagine you are a person -- not you, another person -- who is about to be foreclosed upon. You've been working at a factory that got shut down, or someone in your family had a health problem that put them into serious hock. Your family's getting food from the church and the local food bank. You keep applying for jobs, but your town's dead as hell. Then imagine somehow learning that someone who currently has $200,000; good job security; a maxed-out 401(k); a maxed-out Roth IRA; extra savings in low-cost index mutual funds; an emergency fund; a house; house insurance; car insurance; health insurance; life insurance; and disability insurance is worried about foreclosure too, although there's no rational basis for him to do.

In other words, there's people actually going through the brutal reality you are imagining for yourself. You're not in their shoes. I know you can't help it, but your irrational fear is nonetheless immensely disrespectful to them, whether you can help it or not. Perhaps that realization will serve as ammo for the more reasoning aspects of your head.

When I was dealing with a bedbug infestation that had me pretty much pushed right to the edge of my ability to process anxiety, Katrina happened. I realized that people were losing their homes and possessions, and even their spouses and family, while I was worrying about ... bedbugs. It didn't make bedbugs any less disturbing to me personally in the context of my own life and what I had experienced thus far, but it gave the reasoning aspects in my head factual ammo to tell the fear, "Listen, it could be one hell of a lot worse. Look at what other people are really dealing with, versus the imagery I'm imagining and plaguing myself with."

So perhaps that maxim would be helpful to you. Listen, it could be one hell of a lot worse. Look at what other people are really dealing with, versus the imagery you're imagining and plaguing yourself with.
posted by WCityMike at 11:53 AM on August 3

Spend some time volunteering, preferably abroad, and get some perspective about what wealth actually means.
posted by freya_lamb at 3:07 AM on August 4 [1 favorite]