Our windfall makes me feel weird.

mrsconn23

Dear Prudence,

I don’t know who to ask without sounding like a braggart, so I’m hoping you can help. After years of living paycheck to paycheck, my spouse was unexpectedly promoted. The pay is excellent and right in time for the holidays! I should be celebrating—but I don’t know how. I don’t remember a time when I didn’t have to stretch a penny, even in childhood. I excitedly picked out some cheap but beautiful holiday decorations the other day but returned them before I could even get to the register. Less than $30 worth of stuff that made my and my children’s eyes light up, but I could not do it! How do I get past this mindset? I never want to be a “make more, spend more” type, but how do I get to the point where I can relax and even, gasp, enjoy a little financial freedom?

—No Longer Struggling

charlotte989875

This makes me sad for the LW; they should be able to spend a little more and enjoy what they've worked for. Maybe working out a new budget would help that way they can determine want amount is okay to spend without feeling guilty about it. 

CharmedPam

LW, spend a day with me.  I'll show you how it's done.

kvruns

I understand what LW is saying. I've never lived paycheck to paycheck but I definitely have a frugal mindset and have trouble spending money even though I have it to spend. I could definitely see me hemming and hawing about $30 in decorations although if my kid was there I'd probably have gotten it but I might think about it later like why did I spend that $30.

short+sassy

CharmedPam said:

LW, spend a day with me.  I'll show you how it's done.

LMAO, I almost spit my coffee out when I read this.  @CharmedPam, you're just the best!

I agree with @charlotte989875, that putting together a budget would be a good start.  That way, the LW can see in black and white, just how much extra money they have now.  She should include in the budget a "fun money" amount.  That way, it's right THERE!  Right there in the budget...an affordable line item for splurges.

To an extent, I've been where the LW is.  With my real estate investing, my income went up dramatically in only a 2-3 year period.  I've always been fairly frugal and penny pinching.  And it was initially hard to let some of that go.  Things like going on vacations.  Splurging on restaurants I want to try, even if they are spendy.  Allowing myself to spend more on nicer items.

I feel like I'm now in a good place of balance.  I'm still frugal, overall.  I give a lot of thought to major purchases.  But I no longer feel guilty in spending money, within reason, on things I enjoy.

6fsn

I thought this was going to be unearned windfall money.  Like "I won $1000 on a scratch off and feel guilty blowing it"  This is money they WORKED for.  I hope she can put together a new budget and build in some fun money. 

MissKittyDanger

My mum has this issue. She is a "money hoarder" because she grew up poor and did not want to be back in that situation.

I find that people are either that, or complete opposite. I don't think there's a way to completely get rid of that, it's a mindset. My only idea would be that LW could slowly spend a little extra.
Like with groceries, buy a little treat for your kids you wouldn't normally buy.

short+sassy

MissKittyDanger said:

My mum has this issue. She is a "money hoarder" because she grew up poor and did not want to be back in that situation.

I find that people are either that, or complete opposite. I don't think there's a way to completely get rid of that, it's a mindset. My only idea would be that LW could slowly spend a little extra.
Like with groceries, buy a little treat for your kids you wouldn't normally buy.

I read a fascinating article years ago, on this subject, that really stuck with me.

They did a study where they followed a group of people for (I think) a decade and watched their spending/saving habits.

What they found was that it largely didn't matter how much or how little someone made, their spending habits were about the same.

If a person had a "saver" personality, they saved money no matter how little they made.

If a person had a "paycheck to paycheck" personality and they got a big raise, they'd eventually income-creep back to their "paycheck to paycheck" spending.

Of course, there were also people in the middle of those extremes.  And they also stayed in the middle, lol.

Which is not to say a person can't change their ways, but it takes awareness and a determination to change their spend/save mindset.

kvruns

I agree, I make a lot more than I did when I was first out of college but I still try to live like that for the most part. I'll never change my saver/money hoarder ways. 

*Barbie*

I think DK and I both fall middle of the road in that we both were raised with a saver mentality, but as we've done well financially, we're less adverse to spending more on "wants". He's made the biggest shift in that area - when we first met, he would probably have made an effort to save $1 if he could - so when I heard him say something along the lines of "it's only another $50, no big deal," I was floored. I've also greatly increased my threshold of when I check in with him on making a purchase - earlier on, I probably would have given him a heads up if I was thinking of spending over $100 on something (unless it was a present) - now I'd probably give him a heads up if it was more than $500.

I think saving is really important and max out 401k and make investments - but at the same time, what's the point of having money if you can't have some fun with it?

knottie6fe2cc5434160aa2

I went through a time in my life when I was so poor that I was only eating peanut butter on rice cakes (still can't look at either of those foods years later) and was considering putting my stuff in storage, leaving my apartment, and going to a shelter. It was incredibly terrifying.
When I went back to school and had access to student loans and could eat like a person again, it was hard for a while. I simultaneously wanted to eat absolutely everything and felt incredibly guilty about it.  And it was a culture shock being around people who thought the poverty line was 50k/year.

I really feel for the person in this letter, and I agree that making a budget so she can see that her financial world won't end if she buys some Christmas ornaments.

southernbelle0915

@short+sassy that sounds like a really interesting study. It totally makes sense. Money (often) comes and goes, but the mentality is what's difficult to change. 

DH and I fall somewhere in the middle. I have no problem with the "treat yoself" mentality if I've worked for something (promotion, bonus, etc.) but I'm also a stickler for sage financial planning and looking ahead. 

I'm sure this initial guilt will pass, LW will get comfortable in her new, relaxed budget and $30 in Christmas decorations will seem fine. I wouldn't expect someone used to barely scraping by to be comfortable dropping money on unnecessary things right away.

kalinda2

This is the time where you can also use your money for good. Find a family, maybe one who doesn't qualify for a food basket or Christmas gifts from the angel tree, and be a Secret Santa and land a grocery store card and maybe a toy store or dept store card in their mailbox, or on their door. The school or church might know such a family or you might recognize one in your own neighborhood.

SP29

Agree that it is best to put spending into the budget, and one can be as particular as they like (or not). Break it down into restaurants, entertainment, clothing, etc or just call it all "fun money". Once it's budgeted, it's essentially spent, so less to feel guilty over.

I do understand the mentality though. But balance is a good thing. And if you are paying your bills and putting money into savings each month, then why not spend a little (or all) of what is left over?

DH and I are a little more in the middle on the saver side. We budget and save, but also don't feel guilty if we want to get something (within reason of course). What changed my mind set after we finished school and got permanent full time jobs is that we are spending more on quality, and these items will ideally last a lot longer. We still have a grocery budget, but if we are making a special meal, we will spend more to buy the high quality ingredients that will make it taste better. We are currently saving up money each month towards buying new nice furniture, which although it costs more, it will last us many, many years.