Spending Too Much? How To Overcome Financial Guilt

There is a good chance you grew up hearing the phrase "money can't buy happiness," but once adulthood comes around, many start to realize that there is much more to the story. While people with all the money in the world can still be unhappy with their life or dislike who they are as a person, those who are coming from a place of financial stress often feel like money could solve their problems and give them a much happier life.

The truth is, money is a powerful tool that can be used to afford luxuries like time, convenience, and unique opportunities in life. Without finances being a limiting factor in your life, you can prioritize travel, attend any college your heart desires, or even take on unpaid internships for the experience.

Similarly, the absence of money issues can improve mental and emotional wellness and create a life with much less anxiety and stress. What may feel inconvenient to those with money is catastrophic to those without it because they don't have a financial safety net. You may find yourself frantically wondering how much money should be in your emergency fund — once an emergency occurs. Ultimately, learning how to manage money responsibly is an important step forward, and it can help you avoid the financial guilt of overspending.

Understand where your money is going

The first step in achieving financial wellness revolves around addressing some of the negative beliefs you may have developed about money. Perhaps you feel like others make money easily or that you will always be pinching pennies. This concept of money often leads many to overspend or simply avoid tracking their spending because they feel like big financial goals aren't even worth dreaming about.

Unfortunately, without a clear direction, you will likely find yourself aimlessly spending money on things that you really didn't want or need, which can lead to some major guilt and perpetuate your negative money mindset. According to Mind, there is a direct correlation between your mental health and financial choices.

Recognizing the emotions behind your purchasing decisions can help you be more intentional with your spending. Whether you buy items impulsively, turn to emotional shopping, or spend money when you are overwhelmed, recognizing any mental or emotional triggers will help you put barriers in place to create healthier spending habits.

Set financial goals for yourself

Once you identify the root cause of your overspending and the source of your financial guilt, you can start to come up with a plan to help you make decisions that are healthy and beneficial. This will likely begin with opening up to close friends or family members. Having people around you who hold you accountable may be difficult, but honest communication about your struggles can help you set and stick with financial goals.

Often, frivolous spending occurs when there is no budget in place for various categories like bills, groceries, clothes, and entertainment. There are two main things to keep in mind when making a budget: focusing specifically on your long-term or short-term goals and creating actionable steps to help you reach them.

For example, you may want to pay off your debt, start an emergency fund, or save up a down payment for a house. You may be questioning how much money you should save for your wedding. If these goals have been silently sitting in the back of your head, they can lead to financial guilt after you make purchases that later seem unnecessary. Instead of viewing your spending as a way of sabotaging your goals, a budget gives you the freedom to spend in the areas you've designated.

Give yourself freedom to spend money

While making a budget can seem overwhelming, it all comes down to simple math. You need to take your total amount of income each month and allocate it into the various categories that you create. Start with the bills that must be paid first, like rent, utilities, and groceries. Then, move to more luxury purchases that you desire but don't need — eating out, skincare, makeup, etc.

An essential aspect of your budget is also adding money to your savings account, retirement, or paying off debt. Think about what your most important financial goals are and dedicate a good chunk of your budget to them each month. When deciding how much to put in these categories, it's recommended to use half of your take-home pay for bills, around a third for desirable purchases, and about a quarter toward debt or savings. Of course, consider the timeline for reaching your specific financial milestones, because that may warrant some adjustments.

It's surprisingly easy to make progress when you know how soon you'll reap the benefits of your hard work. Creating a budget is an act of financial discipline because once it's in place, it will control all the purchasing decisions you make. This might sound dreadful at first, but it can actually be incredibly freeing. Instead of constantly wondering if you can or should buy something, you simply refer to the budget. If it's within the budget, you can make the purchase guilt-free.

Channel your inner minimalist

While minimalism can seem like a very extreme lifestyle to those who enjoy owning a lot of things, the sentiment can be beneficial for anyone. The goal of a minimalist is to only own items that truly bring value into your life. Instead of collecting clutter, your purchases should be meaningful and involve a good amount of thought.

This is also a great concept for those who naturally tend to overspend because it helps you become more of a conscious consumer. Once you identify the purchases that truly bring you joy in life, giving yourself permission to make those purchases is actually a way of aligning your actions with your values.

It's also important to avoid playing the comparison game. While some people may think an Equinox membership is completely outrageous, that gym environment may be extremely important for your self-care. On the other hand, forgoing a specialty coffee each morning might be easy for you, even though it's the highlight of someone else's day. Ultimately, choosing to avoid purchases that aren't that important to you — while prioritizing those that bring value to your life — will help you find the perfect balance. If you're having trouble, there are ways to save money with low effort, such as the cash method.

Don't be afraid to set boundaries

Feeling guilty about previous financial purchases can actually prevent you from making progress toward your bigger monetary goals. While money can be an anxiety-inducing topic for many people, harboring those negative emotions limits your progress in this area.

Interestingly, financial guilt may be something that is learned over time through family, friends, or even the media. The way you view money is largely determined by how it influenced your life as a child. If you grew up with a scarcity mindset, where money was always a source of stress within your family, it can be emotionally taxing to make large purchases as a financially independent adult. On the other hand, it can also be really hard to set spending boundaries with friends who may not understand the financial position you're in. If you are constantly being pressured to spend money on activities you know you can't afford, it will inevitably lead to financial regrets.

Therefore, it might be time to have an honest conversation with those around you about how you want your future to look. Those who truly support you should care about your financial endeavors and will likely admire your discipline. Plus, having a positive mindset and remembering why you are setting these boundaries will help you stick to the decisions that are right for you.