A financial planner's advice for spending without guilt

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“What's something that you have felt financial guilt about?”

Oh, things that I have felt financial guilt about there are so many.

I bought a home in 2004, then I went and bought another home in 2006, and basically in 2007

it was worthless. I held on to that home until I think 2017, and finally sold it short even all that time later. I did not make my money back on the home, I ended up having adverse credit history because I sold the home short, so that was a pretty embarrassing thing that happened.

Hey, it's Mary Alcegata, you're listening to LifeKit from NPR, and that was Lauren Williams. She's a certified financial planner, and the founder of the company Worth Winning, where she helps young people organize their finances. Before her finance career, Lauren was an Olympian, and not just one sport, but two. I am the first American woman to earn a medal in both the summer and the winter Olympics.

I did three Olympic games in track and filled, and then won Olympic Games in Bob's lid. Lauren bought her homes while she was still a professional athlete, but soon after things shifted. I didn't have a sustainable lifestyle or career life after sport that was going to allow me to be able to pay a mortgage that was as high as it was, and I learned that pretty quickly

after things started to change sports-wise, I had an injury and the market didn't allow me to sell the home. And so the guilt came from this idea that I am going to have to get rid of this, that this is a place where my family members come and meet. It has been a social environment for so many people.

It's been a safe haven, but also the idea that I'm this big-time athlete, and people think that I earn, and I save in a certain way, and I actually end up using the money

I had set aside for my taxes that year to take out a second mortgage because I did a

poor investment. We talked about guilt, this house was tied up in so much of the financial mistakes that I made over the course of my time as an athlete, that the guilt just kind of piled up, and it actually became kind of representative of just like guilt and general.

“Yeah, it's almost like it's guilt for like, how did I not do better?”

I should have known better, I should have known this, I shouldn't be in this situation. I had everything available to me. I can imagine those are some of the narratives that we're going through your head. Exactly, and then they don't allow you to be able to make other decisions, where you can't actually move forward because you feel so guilty.

So I didn't want to tell anyone that I made this bad investment, and I no longer have

my tax money, and now I need to take out a second mortgage on my home.

I did all of that secretly, and so the guilt kind of piled up because I did have a financial advisor that I ended up talking to about it eventually, but I did not initially because of the guilt that I was carrying. And maybe some other decisions could have been made earlier on if I hadn't felt so guilty that I wanted to hide those things.

On this episode of LifeKit, Lauren and I are going to talk about how to manage financial guilt, whether it's coming from overspending, not spending enough, or something else. We talk about guilt-free spending buckets, following your own money values, and having conversations about money-related guilt. Well, it sounds like a common reason for people feeling guilt is overspending.

Like, I made a bad investment, or I just have been spending my entire paycheck. I have a lot of money on credit cards now.

“How do you get started with tackling that guilt and moving forward?”

So one of the things I think about is this idea of the big bad B-word budgeting. I like to refer to it as a spending plan, but really mapping out what it is that you want to spend money on in addition to what you are spending money on is a great place to start. Because the idea for me is that we create what I like to refer to is kind of like a guilt-free budget.

That's like looking into what your values are. So I and value family. I want to spend time with family, my family lives a far away, I want to travel to be able to see my family. That's a very clear thing that you shouldn't feel guilty about.

A lot of times people come to me and they're like, oh my goodness, I spend $6,000 on travel last year. I'm a bad person. Actually, the narrative should be, the value is to be able to see my family in order to be able to do that.

I need to travel. And so let me organize my budget so that there is a space for travel. So I don't need to feel guilty when I spend $6,000 a year on travel.

Like, what does your rent look like?

“What does your, you know, cardinal look like?”

And let's go through all these other pieces of the puzzle because, like said, the general reason you're coming is that you feel guilty because of the overspending. But maybe it's like, I don't need a two bedroom apartment. I just got one because I thought, you know, it was only 300 bucks more. But you're not using that other bedroom at all.

And so now we have 300 bucks a month, which is almost $3,000 a year or more than $3,000 a year, that we can redirect to the travel budget. And so it's really about building a budget that is in line with your values so that you can feel guilt-free with the things that are important to you. And one thing you noted there, people will jump from, you know, I spent $6,000 on travel

to I'm a bad person, which I know therapists will often interrupt that thought and teach

us how to interrupt those thoughts and say, is that true?

That statement, I'm a bad person. Like, do I know that to be true? Is it definitely true? And who would I be without that thought? I find that to be a really helpful exercise for myself because then you're like, you know

what? It's actually not true. I traveled because I love it, I traveled because I went to see my family, like, that's none of those things point to me being a bad person. When you can lift some of that off of yourself, then I feel like you can start to move

forward.

“Yeah, I always find my clients like, you need to separate your mistakes from yourself”

worth, like a mistake does not say who you are, a bad financial decision does not define

your character. And so we need to like you said revamp what we're telling ourselves, the narrative that we're saying, and fix that to say, I am allowed to enjoy the money that I earned. I am allowed to spend money on travel to see my family because that is important to me. And then you work through, like I said, the other piece of the puzzle, like, what

you don't value and you throw that stuff away so that you can feel really good about everything. Take away one, if you feel guilty because you've overspent, remember your money mistakes do not determine your value as a person. They don't define your character, and you can make changes in the future.

It's about making a budget while still leaving space for some of the things that bring you happiness. We'll have more on that after the break. All we do, helps you understand humanity's biggest threats, climate change pandemics and their weapons, stuff still hits planets.

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Not at Money Summer School, perhaps in friends, pack your bags, and don't forget the sunscreen, listen on the NPR app or wherever you get your podcasts. Another thing that I find helpful in terms of guilt is remembering that there's no one really keeping score. I mean, yeah, there is a credit score.

But it's like, okay, so you overspent on that dinner, or you didn't look closely at the price of something, and you just told your friend to go ahead and buy the tickets, and then you were like, oh, that was way more than I meant to spend. I didn't realize they'd be that expensive.

“You know, it's sort of like, okay, so you know, I think that's exactly right.”

For me, it was, those usher concert tickets recently, yeah, my sister going to December, and she was so excited about it, and I was just like excited to spend time with her, like, I don't really care about the concert to be quite out of this, but I was like, oh, that's going to be expensive. And so, mentally, I put aside like 300 bucks, and it was like 600 dollars, she's like,

I bought them, and I was like, oh, okay, to your 600 dollars. Exactly. I'm like, are we going to get to, like, have dinner with usher afterwards? Like, how does this work? Like, but, I think that's a perfect example of the idea of, hey, go ahead and do it, and

you don't think that it could even be that expensive. And then afterward, you're like, oh, man, I made a mistake. What do I do in order to kind of fix my mistake?

Look at this spending I have coming up, and just reorganize myself.

“So now I gotta go find 300 other dollars, but I don't have to end up in credit card debt.”

I don't have to let this be something I paid for for the next, you know, six years. I just have to say, hey, there's something else that I was probably going to do later on this month, or in the next couple months, because if I said those tickets are not till December, where I can cut those out, and I can still come out in the green, as long as I look at it like that, as long as I'm proactive in thinking about, okay, I did something

in positive in the moment, let's just regulate going forward. And so those little small steps, that little bit of progress, I think, makes a big different, like you said, it's one thing that I did, that wasn't necessarily right, or within aligned with what I plan to do, but it doesn't make me a bad person. And it doesn't have to ruin my whole financial picture.

It's not that I'm not gonna retire because I bought these tickets to the concert. Mm-hmm.

Like, we're always focusing on the guilt piece of the puzzle, like, what good came

out of the thing that you're feeling guilty about is like a good first step to take as well, and then like educate myself so that something like this doesn't happen in the future, and I can feel more confident in my financial situation going forward. Yeah, I love that focus on the good that came out of it. One thing I like is this idea, you've mentioned of a guilt-free spending bucket.

So it's like, if you find yourself overspending, you do want to go through and figure out

“where you can cut back, but that doesn't mean you have to deprive yourself of all fun and”

joy. I never ever recommend that people deprive themselves of all fun and joy, even when you're focusing on debt. So there's some talking heads out there that would tell you, you know, eat beans and rice, look at the wall, don't leave the house, you know, just just suffer until you've

paid off all your debt as an example. That is not the way that I like the budget.

You should always have a space for saving, and you should always have a space for yourself.

You need a discretionary spending bucket, and sometimes that bucket will be smaller because you're working on paying down debt, because you have other things going on as far as your priorities after you've kind of looked at your budget and said, "Okay, these are the things that I want to spend money on, these are things that align with my values. I want to get my credit card that done by December or whatever goal you've set, and you've

organized things accordingly, but you will leave something that you can put aside specifically for you to be able to go out and do whatever, and that bucket, you spin, like you sit literally guilt-free whatever's in it, do what you want with it."

“What to some of your clients put in their guilt-free spending bucket?”

No, it's shoes, lots of shoes. Travel is usually a big piece of the puzzle for a lot of people, and sometimes I say, "Listen, just separate that out all together. That doesn't have to be your guilt-free bucket. Your guilt-free bucket is where you can allow yourself to be impulsive.

You're out and about, and you see something really cool that you're into, I had a client that really loved mugs." And she's like, "I just can't stop buying mugs. I don't even drink coffee or tea, but I started collecting them when I was younger, and I just can't pass up a really cool mug."

And so, in her guilt-free budget, if you just find a random mugs that you want to buy and

it costs 12 bucks, you're never going to drink out of it, like have at it as long as

that line item is there." Take away two, if you find yourself spending more than you have, it is a good idea to cut back, but that doesn't mean complete austerity. Set up a guilt-free spending bucket, decide what you want to spend money on, based on your values, and then let yourself do it, guilt-free.

You'll hear more from Lauren after the break. This season I'm playing at Money Sivers School, we're going on a world tour. And first up, we're following the money down under, from Australia's market where people buy and sell water, to how New Zealand is changing the way central banks fight inflation, pack your bags, and come along as we learn from the rest of the world.

Plan out Money Sivers School, listen on the NPR app, or wherever you get your podcasts." So you've got your guilt-free spending budget, but you're also trying to figure out what you can cut back on, if you do have financial guilt from overspending. How might someone walk through their categories of spending and figure out what they can trim out?

Pull up your credit card bill from the last month, and look at what you spent money on. And so now you're looking over everything and you're saying, "Okay, I spent $78 on this meal. I didn't like the person that I was eating with. I didn't like the food that I ate."

And so you're just like, "This didn't align with my values." And so in order to get rid of the guilt, you look at it and you say, "Okay, I don't feel good about what I did." That's where the guilt came in. But what am I going to do going forward?

I'm not going to hang out with someone, so the next time they invite me, I'm just going to say, "No, thank you." So you're constantly looking at your budget, your spending, your credit card, a statement

What you're saying is making me think that a lot of what we identify as guilt, that feeling

after spending money, is actually misalignment. Yes. It's like, "I spent the money and I didn't enjoy it." And that's why I feel guilty, yes. So it's like doing an audit of your spending, looking for places of misalignment.

Absolutely. And then just realign. You know, it could be from one week to the next, it could be one from one month to the next, it could be one from one day to the next. You're just like, "Wait a minute, catch yourself in the moment and just say, like, this

is not something that I want to do, it's not aligned with who I want to be." And so, therefore, I'm going to pivot to XYZ and do this instead.

Take away three, do an audit of your finances to see where there's misalignment.

“What are you spending money on that you don't actually value?”

That's where to cut back. I thought of another type of financial guilt that some folks might feel if you're in a couple and one of you makes a lot more money than the other one. You could be guilt both ways in that dynamic, right? Guilt that your partner pays for more stuff and you feel like you're not holding up

your end of it or guilt that you're in the partner with more money, but you still want to split things halfway or you don't want to pay for certain stuff or you're kind of annoyed that you have more money and then you feel guilty about being annoyed about that. I feel like money is one of the main things that couples fight about and guilt probably pays a big role there.

Yeah, no, I think you're exactly right. I've actually had this conversation with my significant other fairly recently as the bread winner for our household. I do it with pleasure, but the conversation sometimes is like how making sure that the other person feels good about how they're contributing otherwise.

There are things that I can't do when I'm working that my partner does, taking our eight-year-old to soccer, I don't want to go to soccer practice ever, you know, I can avoid it. And that is so valuable to me, but you're right, he feels a lot of guilt as you know, there's the stigma of like male versus female and you know, the bread winner and then there's

cultural, you know, my spouse's Colombian and there's just, you know, so much of I want to be able to contribute and just reminding the other person, like, hey, you are contributing, you're just contributing differently.

The monetary contribution does not make me more powerful than you.

We are a team working together and everybody's contribution to this family is very valuable. So, having that conversation once again is so important to be able to help your significant other work through that guilt if that is something they're experiencing. Take away four. If you or your partner are feeling guilty because one of you makes more money than the other,

it can help to talk about it. And if you're the bread winner and your partner's feeling guilty, you might remind them of the contributions they make outside of money. If they take care of the house or the kids or your elderly parents, or they're the ones who do all the planning or the household finances.

Of course, this approach will only work if you do feel like they're contributing, but if not, that's worth a conversation too.

“The other kind of financial guilt is the guilt you have from not spending more, right?”

From not giving more, for instance to family members or to friends who have less than you. How would you counsel clients who are feeling some of that guilt or responsibility? It's a conversation where we have to just kind of unroll the idea of, you know, who are these people that you feel obligated to? Why do you feel like you cannot enjoy what you have just because they don't?

Why do you feel obligated to help them if that is something that you're feeling? And why do you feel obligated to, you know, to kind of oversafe because that's something that I see quite a bit as well. Is it just not spending any money whatsoever because they feel guilty about enjoying? And so now they just have this stock pile of money, not because there's like a financial

goal or a big savings goal that they have, it's just like, I don't feel good about spending it. And so the way to work through that piece of the puzzle is to think about this, like, okay, I don't feel good about spending this money, but so-and-so, you know, feeling the blank with

“the person that you, you know, think is less or less off, what would they want for you?”

How do they feel about you? When they look at you, do they, are you thinking that they want to see you fail? That they want to see you suffer? And so asking questions like that sometimes you get there to answer pretty quickly. No, of course not, you know, my sister don't want me to, you know, live at a cardboard

box. They, they want me to have a great life. They want me to enjoy the fruits of my labor. And, you know, I hear it all the time, even now, I should work less. We have to, like, ask ourselves the hard question of, like, where am I getting this narrative

And then challenge ourselves so that you can decide, you know, is there really a good reason that I'm doing this? Yeah. And how much do I want to set aside for them? Like, let's say you have like a niece or enough you and I have some friends who are setting

aside investment money for their niece or nephew's college, for instance. There's probably a more structured way to do it, you know, like where you're saying, okay, I am going to give, but it's got to be part of my budget and I have to be clear with myself about what the limits are.

And almost always leads back to having a conversation with someone, whether that is a financial

planner, it is a accountability partner, the person that, like I said, you feel obligated to, but having the conversation and just getting it out there helps you unravel the idea that you're thinking and once you've said it out loud and someone tells you, like, hey, that sounds preposterous, like, don't say about your money and never spend any of it because, you know, like, you're already on track for retirement, like, let's go on vacation, like,

someone just, like, even telling you, giving you permission to do so is so freeing sometimes, you're like, wow, but where does guilt come from, frequently, secrecy? And you're not talking to anyone about what you feel guilty about and so you're just playing this narrative over and over again in your head when it's actually not true at all. Take away five.

If you feel guilt for spending money on yourself when you could be giving it to others,

“Lauren says, remember that being financially secure is not something to apologize for.”

The most productive question to ask yourself in these cases is not, do I deserve this?

But what am I going to do with what I have?

Make sure your financial foundation is secure before you start giving your money away. She says, if giving leaves you unable to pay your bills, build your emergency fund or save for retirement, it may not be sustainable. And when you're deciding to give money to family and friends or to charitable groups, ask yourself what causes and people matter most to you and how you can give in a way that

aligns with your values. Also, Lauren recommends that you decide what your comfortable giving before somebody asks. So your decisions are guided by your values rather than by emotion or pressure in the moment. In one word, what would you say is the antidote to financial guilt? Education.

Um. Education gives you confidence and confidence is the thing that allows you to get rid of the guilt. I love that. I would say as a backup word, conversation. Absolutely. Lauren, thank you so much for this.

Con Gusto, this has been a great conversation. I feel less guilty already. Yes, I like it. Missing a conflict. Um, I hope you enjoy the OSHA concert.

I do too. I'm sure he'll put on a great performance. I think he's a great performer. All right. It's time for a recap.

Take away one. Remember your money mistakes do not determine your value as a person. Take away two. If you find yourself spending more than you have, you do want to go through and cut back.

“But that doesn't mean you have to deprive yourself of all joy.”

Set up a guilt-free spending bucket and decide what you want to spend money on based on your values. Take away three. Do an audit of your finances to see where there's misalignment. What are you spending money on that you don't value?

That's where you cut back. Take away four. If you are your partner or feeling guilty because one of you makes more money than the other, it can help to talk about it. And if you're the breadwinner and your partner is feeling guilty, you might remind them

of the contributions they make outside of money. And take away five.

If you feel guilty for not giving away more of your money, first make sure you're able

to take care of yourself and any dependence financially. Then ask yourself what and who matter most you. Think about how much you're able to give before somebody asks, you want to make these decisions from a clear headed place, not just because you feel guilty. That's our show.

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