This may sound a little wacky, but once you’ve lived on a low income for a long time it can actually be a stressful having more money. For a long time my husband and I have lived on a tight budget. Between college years, new babies, single income-years, debt and job loss, things got pretty tight for about 10 years.
My husband now has a good job with great benefits and my freelance business is finally taking off, but after 10 years of living on a shoestring budget, (and paying off too much debt), having money feels strange.
I didn’t realize how not-well I was coping with our increased budget until we went shopping a few weeks ago. My husband went grocery shopping and spent about $100 more than I estimated we’d spend. I panicked. Freaked out. Lost my marbles. As I’m cramming this plethora of veggies into the fridge, I’m doing Yoga breathing to keep from going insane.
Suddenly, it hit me. What was I freaking out about? I’m making a full-time wage, working part-time,we’d just paid off our last credit card bill and we had more than enough money to cover our other bills.
Why was I freaking out? Because, I’m not used to having money. I’m not used to being able to spend $300 on groceries in one trip. (Our family of four was living on $300 a month for groceries).
Getting a grip
Fortunately, I had my “ah-ha!” moment before I completely went nutters on my husband. I took a deep breath, apologized for panicking and then calmly discussed the situation.
Funny enough, my husband had been panicking the entire drive home from the grocery store. Apparently neither of us are used to being able to buy things without worrying our bank card is going to bounce.
Unfortunately this wasn’t a one-time deal. Nearly every time we’ve been to the store since, I’ve had to remind myself to calm down because we have the money set aside for these purchases we’re making.
I guess, I’m not alone in dealing with the psychological effects of having (or not having) money. According to a Huffington Post article, money, the pursuit of money and/or not having any money plays a substantial role in our behavior.
“Psychologists who study the impact of wealth and inequality on human behavior have found that money can powerfully influence our thoughts and actions in ways that we’re often not aware of, no matter our economic circumstances.”
This same article referenced several studies that indicated financial circumstances often effect empathy, moral judgement and addiction.
Me having a melt down about spending money we had is probably not that unusual.
In fact, according to Sudden Wealth, individuals who accumulate a lot of money suddenly (not exactly our case) often experience feelings of fear, insecurity, resentment and even grief. The point: emotional reactions to money (having or not having it) is pretty standard.
Finding a Solution
The idea of having more money wasn’t nearly as stressful as actually having it. I had all of these plans for spending extra cash once it started coming in, but actually
spending that money is a little harder than I thought it would be. Maybe it’s the fear of all of it disappearing or the idea that I could backslide into bad habits if I spend cash on anything, but parting ways with my dough is harder now.
There are a ton of places to get help with not having enough money, but it can be a bit harder to find info on what to do with a little extra cash. Here are a few things that have helped me:
Have a plan:
In other words: create a budget. Whether you are making a cool million every month or barely breaking a thousand, having a budget is a necessary evil. It’s not fun (usually) and it takes a little time, especially at first, but it’s worth the effort.
The sorta-fun part about making a budget when you have a little more disposable income is that you have more money to devote to newer areas you may have been neglecting before. Sit down at the beginning (or end) of each month and update your budget. Knowing where every dollar goes will let you see how much extra money you have, so you can use it better.
Spend it well
Unless you are rolling in the Benjamins, it’s pretty safe to say that buying a yacht or a million-dollar home may not be the best first step. A few good places to start:
- Snowball/Debt Stack (pay it all off!)
- Build an emergency fund
- Invest in Roth IRA/IRA/401k
- College fund (Check out your state’s 529 plan)
- Charitable giving
Have a little fun
There’s no shame in having fun with your extra cash. Having a budget will make it easier to spend on fun things because you will know how much you can comfortably spend on fun purchases without hurting your bank account.
We paid cash for our entire trip to Disneyland. We had to budget and choose some less expensive options, but we did it and I don’t feel bad about going on this trip because we are going to come back without any debt!
Share your experience:
Have you had to adjust to having a bigger budget? How did you react? How are you staying on track with your budget? Tell us in the comments below.
As always, feel free to submit questions or topic ideas for things you want to know more about.