fear of spending money

Fear Of Spending Money? You Might Be An Underspender

Are you an extreme penny pincher? Does spending money make you cringe?

Do you keep a strict budget? What happens when you go over-budget?

If you're an underspender, these types of situations might cause you to go running for the hills. Underspending is a disorder that causes you to have a fear of spending money.

This article will show you ways to stop being afraid to spend your money. In fact, you'll find awesome ways to spend it to create more fulfillment in your life.

Let's first start with understanding why this psychological behavior exists.

What is the underspending disorder?

extreme cheapskate

I first heard about underspending when I read Julie Cazzin's Seven Deadly Money Disorders. Underspending was one of the psychological disorders that stood out to me.

When you think of an underspender, you probably think of someone who's cheap. You might also think of someone who's stingy. Or someone who wants to stockpile savings for no reason at all.

Neither of those are incorrect, but underspenders take it to the extreme. Where a frugal person might only tip 10-15%, an underspender would tip nothing.

And that's if they can manage to go out to eat to begin with. You see, underspenders have a true fear of spending money.

It pains them. It makes them sick.

It also makes no difference how much an underspender earns. You can be a gas station attendant or CEO of a corporation and still have this disorder.

I'm not a psychologist, so I won't dive into reasons why someone may be or become an underspender. What I will share are some common characteristics and some resources for you to look at.

First, let's look at whether you may actually be an underspender. If you connect with any of these traits, it's possible you're an underspender:

  • You refuse to buy new clothes or shoes, and instead wear old tattered ones
  • You don't tip at a restaurant (or go to restaurants)
  • You never buys gifts for anyone (but you don't turn them down either!)
  • You eat any and every left over, even if it was partly eaten by someone else

I've seen all of these, and it's not pretty. You might be saying "but these people are trying to save money, they're frugal!"

No they aren't. This is beyond frugal.

If you've ever seen Extreme Cheapskates, this is in the same ballpark. Saving too much money is a byproduct of something deeper, like an underspending disorder.

So remember, underspenders are more than just frugal people or "cheapskates". They're people who save too much of their money because it may actually pain them to spend it.

Further reading:

How to stop being an underspender

stingy with money

First off, saving too much money can be a the result of a serious psychological disorder. If you feel you or anyone you know may have a serious problem, consult a physician.

That being said, many of us experience underspending tendencies. And if it's not addressed early on, it can lead to bigger issues down the road.

Think about it - who wants to go out with the person who refuses to tip, pay for their food, or wear gross, tattered clothes?

First, be mentally strong

mentally strong

The first thing you need to do to stop saving so much and start enjoying your money is to be mentally strong. Amy Morin, author of [easyazon_link identifier=”0062358294″ locale=”US” tag=”monemoza0c-20″]13 Things Mentally Strong People Don’t Do[/easyazon_link], provides some insight into tackling your fears.

Let’s look at 2 of her tips that connect well with this situation:

1. Quit wasting time worrying about things you can't control

Negative emotions limit your ability to change or move forward. Think about the reasons why you're saving too much money. It's possible that it's a result of some event or series of events you experienced in your life.

I've been there. Growing up, my parents went through bankruptcy twice. It sucked. It had a negative effect on me.

But if I let those negative feelings consume me, I'd never spend a dime. More than likely I'd be saving too much of my money out of fear.

The point is to do something about those negative experiences. Instead of living in fear that spending money will ruin your life, figure out what's causing it and do something about it.

Stockpiling money isn't the solution. Millions of people retire early and they live a balanced financial life.

2. Don't fear change

It's easier said than done. But if you're looking to change your financial habits, you don't have to be perfect.

Take baby steps instead. Try to make one small change.

Maybe go out with one friend to an inexpensive restaurant, and leave a small tip. Then work your way up from there.

The analogy I love to use is a messy house. If I have a house where every room is a disaster, I tend to avoid cleaning the house - it's too overwhelming.

But if I instead focus on cleaning just one room each day during the week, it doesn't seem as bad. So break down your fears into smaller chunks. You'll be surprised at the results.

Being strong mentally is the first step toward living a more balanced financial life. If you want to learn more about what mentally strong people don’t do, check out Morin’s book, [easyazon_link identifier=”0062358294″ locale=”US” tag=”monemoza0c-20″]13 Things Mentally Strong People Don’t Do[/easyazon_link]:

[easyazon_image align=”none” height=”500″ identifier=”0062358294″ locale=”US” src=”https://www.moneymozart.com/wp-content/uploads/2016/02/418roFbTyTL.jpg” tag=”monemoza0c-20″ width=”330″]

Then, learn to spend your money the right way

At this point, you've gotten through the mental side of things. Now it's time to figure out how to spend your money in an effective way. A great starting point is to focus on 2 easy rules:

1. Spend money on experiences, not things

Spending money on material possessions won't cure your inability to spend money. Tangible items wear out, lose their luster, or become unusable at some point in the future.

We also tend to just forget about the 'things' we buy, as they're just not as important. Take a look around your home for a minute. I bet you can pick out at least three things you own that you no longer need.

Experiences create memories. Memories that nobody else can replicate. Memories that will stick in your mind forever.

A vacation is a perfect example of an experience to spend money on. A couple of years ago, my wife and I went to Turks & Caicos. Just Google an image of Providenciales and tell me that's not a memory that would stick in your mind forever.

But what if I instead bought a tangible item, like a new car. Eventually the car is going to wear down, become old and rusty, and I won't want it anymore. Yet my mental images, pictures, and memories of Turks & Caicos will be 'new' forever.

Experiences don't have to be vacations, though. You can spend money investing in yourself, like learning another language.

A great way to get over your fear of spending money might be to learn Italian. Instead of hoarding money in a savings account, you can enjoy the benefits of learning a new language.

2. When you buy things, buy quality things

Let's be honest, we all buy stuff. If you're an underspender, buying stuff can help you break your fear. You just have to do it the right way.

If you're going to spend your money on tangible items, always buy quality, even if it costs a little more.

It's stressful to buy something and have it fall apart shortly after. Especially if you already have a hard time spending money.

Here's a real example. I hate buying shoes, so I bought the cheapest pair I could.

I wore them out so fast that I had to buy another pair within about 6 months. And out of stupidity, I bought the same pair again.

What happened? Another 6 months went by and the shoes are beat up and almost unwearable.

Had I just invested a little more money up front in better quality, I may not have had that problem. So focus on quality.

How to sustain

spending too much money

The point is to not go extreme. If you're saving too much money, you have to take small steps to start living a more balanced financial life.

Aside from learning to spend your money wisely, you'll also need to learn to save your money wisely.

A typical habit of an underspender is not wanting to 'risk' their money in the stock market. You may feel just as bad putting your money into a stock that loses value as you do spending money on a new pair of pants.

The problem is that if you don't invest your money, you won't be able to take advantage of gains on the money. Leaving your cash in a low-yield savings account or in a jar at home is a bad idea.

You'll end up losing money in the long run due to inflation anyway.

So instead of going crazy and investing in all kinds of stocks you know nothing about, start small. Try investing in a mutual fund or ETF. If you're feeling a little more confident, try the value investing approach.

The goal is to put your money somewhere it can grow. Don't be afraid to lose money - if you are, you'll never win. Remember, don't focus on things beyond your control.


This article talked about someone with a true psychological aversion to spending money. This may not be you.

But it doesn't mean we all can't learn something from it.

Yes, it's important to start saving and investing early, or you may never retire. But if you don't spend your money to some degree, you may lose out on all kinds of happiness in life.

You risk losing friendships, memories, and knowledge. So if you find yourself having even the slightest bit of a hard time spending money, I have one takeaway for you:

Go out and spend $10-20 on either an experience or a quality item.

If you feel comfortable spending more, go for it. $10-20 won't ruin your life, so give it a shot. Buy a book and read it. Buy a train ticket to go somewhere new.

Just try something. By taking baby steps, you'll soon overcome your fear of spending money.

Do you or anyone you know have a fear of spending money? If so, please share your story below!

Disclosure: This post contains affiliate links. If you decide to click one of the links and buy the product, I'll get a commission for referring you. If you found the content valuable and want to go a little further by reading some of the books, for example, please consider using my links 😀

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Chris Muller

Chris is the founder of Money Mozart, a blog about personal finance. He discusses frugality, minimalism, and achieving financial independence by living well below your means. He's also an avid craft beer lover and an aspiring minimalist.

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