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“To acquire money requires valour; to keep money requires prudence; and to spend money well is an art”. (Berthold Auerbach)

Most of the financial advice that you read about spending will talk about the problem of people spending too much. Much less attention is paid to those who have a very different challenge – folks who struggle to spend what they have.

There is even a psychological diagnosis for this in its extreme form: chrometophobia.

This is described as: “an extreme, irrational and overwhelming fear of money, specifically of spending money. Someone with this phobia may experience intense fear, anxiety or panic at the sight, smell or touch of physical money or at the thought of spending money. Chrometophobia can be so extreme that it can be extremely difficult for someone to spend money or pay their bills, even if they are in a good financial position.”

Spending anxiety

Only a few people have such an overwhelming fear of spending. However, it isn’t that uncommon to find people who have some aversion to spending money, even when they can afford it.

Any kind of spending can be a cause of anxiety for people like this. Sometimes they even prefer to stay away from activities where they will need to pay for things, just to avoid the distress it causes them. They are also likely to deny themselves even small luxuries, despite having enough to enjoy them.

Broadly speaking, this apprehension tends to come from three main psychological causes:

1. Values and upbringing

Some people are raised in families or cultures where frugality and saving are highly valued. These values can become deeply ingrained and difficult to change, even when a person's financial situation improves.

2. Guilt

Spending money can cause guilt or shame in some people who feel like they don’t deserve to spend money on themselves. They believe they should always be spending in more responsible ways.

3. Past experience 

For some people, previous experiences of poverty or financial abuse can make them hesitant to spend money, even when they have the means to do so. These experiences can create a lasting fear of not having enough money or losing control over their finances.

“Spendthrifts” and “tightwads”

The first step towards addressing a reluctance to spend, is to understand where it comes from. Scott Rick, an associate professor at the University of Michigan’s Ross School of Business, is a researcher who has focused on the emotional causes of the way consumers behave.

His particular interest is in spending behaviour, and he identifies two extreme kinds of people. The first, are those who spend too freely – who he calls “spendthrifts” – and the second are those who have an aversion to spending at all – who he names “tightwads”.

In a discussion with the American Psychological Association, he described how tightwads are often impacted by some past trauma.

“When you listen to a lot of them talk about their feelings and their thoughts, a lot of them do have memories of real distress in the past, and it's just hard to shake it once things get better,” Rick said. “These feelings are cultivated over time, and it's hard to turn it off like a light switch. So, I think for them it helps to manage the distress, holding onto money.”

These psychological causes are often deep-set, which means that therapy tends to be a positive way of addressing them. Cognitive behavioural therapy, exposure therapy and hypnotherapy are all approaches with proven results.

Making a plan

It may sound ironic, but the best practical way of dealing with anxiety around spending is to develop a spending plan.

Many people think of a budget as limiting or restrictive, but for a person who struggles to spend money, it can actually be liberating. That is because by allocating amounts to things in a budget, they are effectively giving themselves permission to spend on those things.

Writing a plan down, and seeing that their spending is affordable and within the limits they set for themselves, also eases a lot of the anxiety about whether they will have enough. They can be sure that they are not putting their finances at risk.

For some, it may be more helpful to put together a spending plan that breaks things down in terms of percentages rather than actual amounts. That is because seeing large monetary figures can in itself cause anxiety. But if a spending plan is rather expressed in terms of parts of a total, that is easier to accept.

As with any financial concern, the best starting point to address any anxiety around finances is to speak to a professional.