When is it OK to stop worrying?
Ask a Financial Advisor: Hannah
Is this normal? Sometimes when I’m spending money even though I know logically I can 100% afford this thing I still agonize over it! I hit analysis paralysis and honestly just feel guilty for some reason. I’m a higher earner with tons of savings in the bank but seem stuck with these feelings. Is this normal? Signed — Spending Hours Comparison Shopping
September 27, 2024
Dear Spending Hours,
Oh, the hand-wringing around the $25 Amazon purchase — hello, old friend.
My fellow ex-project managers and I carry one truth out into the world when we leave the profession: “People. Hate. Change.” As a PM, our job was to be the harbinger of change and then witness the reactions that unfold. Humanity has one knee-jerk go-to move in times of change (even good change!) and it is to exert control where we can. Maybe that’s stating your concerns calmly and reasonably in a meeting, maybe it’s adjusting the font size on a presentation slide, maybe it’s going and sinking some energy into a side project instead of on the work area that is bothering you. At the end of the day, we vent our perceived lack of control out into the world through these little (or not little) behaviors. This is entirely normal, and I would suggest for the most part entirely healthy and to be expected.
However, this quest for control can be problematic when it contradicts our other priorities. In your case, I hear two contradictions between your actions and your values: you want to spend your time a certain way, and you want to spend your money in a certain way, and the hours and agony you’re bringing to small purchases aren’t consistent with those aspirations. Your guilt and distress are telling you that something is wrong.
Is this normal? Oh, yes. Is this how everyone has to feel? Oh, no. Let’s attack the contradictions.
How can you spend less time on spending?
Automate what you can afford and predict: Are there purchases you can put on autopilot? Household inventory is ripe for this type of structure, and many grocery apps include a reusable weekly shopping list so you can load an online grocery cart up with you weekly staples easily. If you are a high-earner, you can automate even more recurring purchases, such as grooming products. If you’ve landed on a favorite high-end, high-quality staple, then design your spending plan with the room to reorder when you get low. Don’t wait for sales or look for dupes or add items to get the free shipping; just pay the $7 shipping, buy the product, backstock it and move on. Give yourself permission to simplify.
Set rules for future-you. Here’s some examples of rules that can reduce your buying friction:
“If I’m buying a household appliance that costs less than $200, I will purchase the Consumer Reports highest-ranked product and move on.” No reading reviews, no comparison shopping, no YouTube -- just pull the trigger.
“I will add items to my shopping cart but not complete the purchase until my weekly ‘buy day,’ at which point I will evaluate all my proposed purchases holistically.”
Are these exactly the rules that will help you? Probably not. But consider the situations that lead you to distress and think about rules that can reduce your mental load.
How can you spend less emotion on spending?
Big topic! For today, let’s zoom in on your question about guilt regarding small purchases that you can afford.
Create certainty and confidence in what “I can afford it” means. How do you know you can afford it? Are all of your bigger financial goals on track? Do you have a hunch, or are you certain? Getting clarity and specifics around the bigger picture goals (retirement, education, housing) can loosen up the mental energy being burned up on the smaller purchases. It could be a venting of control if you aren’t feeling clear about your larger financial picture.
Look for contentment with your process, not your purchase. When you purchase something, you could end up regretting it. The item may not meet your needs, the quality of a service may not be to your liking, you may no longer want something once it arrives. However, if you can feel confident in the process that led to your decision — even if the decision itself ultimately disappointed you — you may not feel the same need for guilt. You can just shrug your shoulders, give that item a new home, and move on.
Consider a sinking fund: A “sinking fund” is just an earmarked amount of money for a specific future purchase, like a vacation, a “wardrobe refresh” allowance or home renovation. If a dollar is tagged to a sinking fund, you know it’s not needed for other priorities like groceries, rent, retirement or a house down payment. You’ve pre-made that aligned decision and now as long as you spend under the amount in that sinking fund you don’t have to spend a millisecond wondering if you can afford the purchase. This is actually taking the behavioral economic concept of “mental accounting” and using it for a constructive purpose.
I hope these steps are helpful — but you’ve already taken the first, and most important, step: asking the question. You are already well on your way to cracking open the problem and unpacking a solution that works for you.
Author: Hannah Farrow
Date Published: 9/27/2024
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