Spending guilt could be harming our minds and our pockets

Look after the pennies and the pounds will look after themselves is an idiom you’ve probably heard a million times.

It’s true that £3 coffees and £2 lottery tickets add up, and although the trope that we could all own homes if we cut out these things is tired beyond belief, we could all use a little nudge to save a bit more by cutting out the unnecessary.

That said, we’re all human beings, and feeling guilty about every transaction on your statement is no way to live.

I’m guilty of that guilt myself, finding myself at the end of each month wishing I hadn’t gone for that pint or spent £4 on a sheet mask to make myself feel better.

It eats me up to the point where I berate myself for buying Heinz ketchup instead of own-brand, convincing myself that I’d likely be a millionaire if I weren’t so frivolous.

When I’m more clear-headed I actually look back at my budget, though, and realise that I’m not some mad spendthrift. Instead, I just don’t actually have that much disposable income, which makes me feel ashamed and feel to blame for everything I buy – even when I need it.

I’m not alone in this. Our How I Save series constantly reveals that people – even those with plenty in the bank – are torturing themselves with guilt over tiny things.

There was the 23-year-old who felt terrible about buying a couple of coffees over the course of a busy week, despite putting 25% of her take-home pay in savings most months.

Or the man earning £143,000 a year who laboured over saving 50p on a different loaf of bread he liked less, saying ‘I had to down select this instead of Seed Sensations because it was £1.70’ and instead buying the one he didn’t enjoy for £1.25.

Or the viral BBC money article where the diarist chided herself for spending £1.50 on a tin of tuna and became ‘quite annoyed’ at herself.

With constant well-meaning ‘advice’ to save and the fear of living up to the millennial stereotype of spending everything on takeaway coffees, are we now in a state where we can’t reconcile any spending at all?

Simon Rabin, CEO and founder of saving app Chip, thinks it’s not too different from other types of shame we may feel.

He said ‘It’s the classic tension between your lizard (“I want this now”) and human (“focus on the big picture”) brain. The fact is the small things add up, and we do know this.

‘It’s the same guilt we feel after eating the sticky chocolate cake that we know we shouldn’t have. It doesn’t fit what we feel we should be doing in the big picture, but in the heat of the moment, it was amazing.’

With constant reminders that you need to focus on this ‘big picture’, you find it harder to see what is significant and what isn’t. For example, that sticky chocolate cake won’t make a bit of difference when in the context of a healthy diet, so there’s no need to feel shameful about it unless it’s part of a wider pattern of unhealthy habits.

Simon contends that we’re often being driven to spend with FinTech like contactless payments and buy-now-pay-later, which is in direct contrast to how we’ve been told we should spend by our parents and mentors.

‘Everything in our economy and society is moving towards making it easier to spend your money,’ he says. ‘More or less all the recent innovations in consumer finance have been about making it easier to spend.

‘We’re a culture that traditionally values the idea of individual responsibility, work-ethic, and saving up for the future.

‘And there’s a certain approach to finances, that emphasises your individual responsibility above all else – “the savvy consumer” ideal. You see this spirit come through in a lot of consumer finance journalism, and there are many FinTech apps that send nagging reminders about your spending.’

That app that buzzes every time you grab a croissant from the supermarket might not actually be doing you good, and instead acts as a form of punishment for not putting every penny you earn in a savings pot. If you’re already inclined to this guilt, it can be detrimental to your overall wellbeing.

Think, too, about the wider world we live in and how our attitude to saving might be shaped by it.

If you live in London, the average deposit for a house is around £115,000, which is 392% of the average annual salary in the city at £38,272.

With that in mind, it’s understandable that you might feel that the total is impossible to reach, and as a result, scold yourself for not saving more.

Although you should still be responsible for your own savings, it’s important to remember that your spending is not the only reason you aren’t able to save for big things like a house. The Institute for Fiscal Studies claims that the ‘increase in house prices relative to family incomes fully explains the fall in homeownership for young adults.’

There’s mention of lattes or avocado toast in their report.

According to Simon, the best way to combat this constant guilt is to use a mindfulness maxim.

He says: ‘don’t stress what you can’t change, think about what you’re going to do next time.

‘Also a very important thing I’ve taken from wellbeing/health; it’s not the small treats that make you overweight, it’s your regular eating habits. This absolutely applies to money too.

‘So, don’t kick yourself if you bought an expensive meal, a frivolous item of clothing, an overpriced coffee. Enjoy them, these are nice things, life is hard, treat yourself.’

That doesn’t mean blindly spending on every single thing that looks pretty in a shop window, though.

He continues: ‘Take a look at if you’re doing this all the time. One nice coffee is £3, if you get one every day, that’s £1,000 a year.’

Simon’s recommendation is to think about a big goal as a carrot rather than stick approach. Instead of thinking ‘oh no, me buying this pint will ruin me financially, but if I don’t have it I’ll be living a joyless life from here on out’, try to think about the goal in a positive light.

For example, ‘think what you *really* want to spend your money on – pints now, or cocktails on a beach later). This keeps your mind in a positive place, rather than thinking about the nice thing you’re missing out on.’

There’s also a lot of merit in the idea that you should still think of the big picture, but not just in terms of where you’d like to be.

Simon says: ‘Chances are there are other bigger regular costs in your life that are eating up far more of your money. If you want to budget seriously, start by looking at those, not the small purchases that make you happy.

‘Even if you’re short of money, it’s very likely not just because of the nice small purchases you’ve made. The reality will be there are some bigger issues in your life, and you’re better off thinking about those, than catastrophising over the £4 sandwich you just bought.’