When individuals are reluctant to spend, anxiety or a history of financial trauma may be at the core of the issue. Getty
When individuals are reluctant to spend, anxiety or a history of financial trauma may be at the core of the issue. Getty
When individuals are reluctant to spend, anxiety or a history of financial trauma may be at the core of the issue. Getty
When individuals are reluctant to spend, anxiety or a history of financial trauma may be at the core of the issue. Getty


How can we overcome the fear of spending?


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July 28, 2023

Humans aren’t great at balance. We tend to think, feel, talk and act in extremes, often to our detriment.

When we are too indulgent or too restrictive, we create a world of discomfort for ourselves and those who care about us. This is also true in our money lives.

For example, when most people think about problem spending, they think about those who overspend. Yet, it can be equally problematic for someone when they underspend or are scared to spend the money they have.

So, why do some of us struggle to spend money even when there’s more than enough? To answer this question, we must look under the surface.

People struggle to spend money for many different reasons. They may include financial anxiety or a history of financial trauma, transitioning from accumulation to decumulation into a new phase of life, or through identity and emotional connection to assets.

Let’s look at these three areas individually, starting with anxiety and financial trauma.

When people are reluctant to spend, anxiety or a history of financial trauma may be at the core of the issue.

If someone struggles with anxious thought patterns, they may spend a lot of time preparing for the worst thing they can imagine. While it’s healthy to plan, financially anxious people can carry preparation for unforeseen events to the extreme.

With financial trauma, the brain of someone who has experienced scarcity, deprivation or loss may struggle to recognise that they are living in a new context with different resources.

Thriftiness that was previously necessary and adaptive is no longer needed. Still, the mind can’t register that old threats don’t exist. They are unable to see that they have outgrown what was once adaptive. Long-standing habits get in the way.

When people transition to a new phase of life, they often need to recalibrate various aspects of their money life.

One of the most significant shifts occurs when people enter retirement. Many people spend decades focusing on saving for retirement.

So, when a person then flips from accumulation to decumulation, it can be jarring. Life’s uncertainty makes it scary for someone to start spending what they’ve spent a lifetime working for.

Finally, the origins of people’s money can significantly affect the feelings they have about spending it.

For instance, people may feel uncomfortable about spending money they receive from a life insurance policy.

Or if someone has received an asset as a gift from a person who has passed away, they may struggle to part with it because, in their mind, it’s a connection to someone important. They may think “this is all I have left of them”.

And so, given that there are many factors impacting our willingness to spend, how can we overcome this?

When the fear of spending is having a detrimental effect on the quality of your life, there are steps that you can take.

Here are five strategies to use if you are struggling to use the resources currently available to you:

1. Acknowledge and normalise, validate the struggle

Current choices emerge from previous life experiences, so be compassionate with yourself when engaging in a behaviour that is instinctually about survival.

2. Do the maths with an adviser you trust

After validating the emotional side of the struggle to spend, it may be beneficial to speak to a trusted adviser who can help you review data and the facts of a situation. You might discover that some fears are unfounded in their present financial reality.

3. Define your abundant life

Explore if a lifestyle upgrade might bring you increased joy. Paint a vivid picture of new possibilities and be specific.

4. Give yourself permission to pursue an abundant life

To do this, you may need to address issues that have made spending a challenge. That may include guilt, fear, core beliefs about wealth, or struggles with self-esteem.

5. Practise living an abundant life

After identifying ways of spending that lead to new kinds of comfort or enjoyment, it’s time to practise. For instance, set aside a specific amount of money you can reasonably afford to spend. Next, commit to using it. It may be uncomfortable at first, but like other behaviours in life that were hard at first, changing spending habits will grow easier over time.

By walking through these steps, you can feel freer and more confident to use your resources in a manner that is both responsible and enjoyable.

Spending money may feel uncomfortable or counterintuitive to you, but remember, it’s part of a healthy financial life.

Taking steps to achieve a balance allows you to responsibly prepare for tomorrow while allowing yourself to savour and enjoy today.

Sam Instone is co-chief executive of wealth management company AES

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Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa

Rating: 4.5/5

While you're here
Lexus LX700h specs

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Torque: 790Nm from 2,000-3,600rpm

Transmission: 10-speed auto

Fuel consumption: 11.7L/100km

On sale: Now

Price: From Dh590,000

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What is blockchain?

Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.

The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.

Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.

However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.

Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.

Tips for job-seekers
  • Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
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David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East

Women’s World T20, Asia Qualifier

UAE results
Beat China by 16 runs
Lost to Thailand by 10 wickets
Beat Nepal by five runs
Beat Hong Kong by eight wickets
Beat Malaysia by 34 runs

Standings (P, W, l, NR, points)

1. Thailand 5 4 0 1 9
2. UAE 5 4 1 0 8
3. Nepal 5 2 1 2 6
4. Hong Kong 5 2 2 1 5
5. Malaysia 5 1 4 0 2
6. China 5 0 5 0 0

Final
Thailand v UAE, Monday, 7am

UAE v Gibraltar

What: International friendly

When: 7pm kick off

Where: Rugby Park, Dubai Sports City

Admission: Free

Online: The match will be broadcast live on Dubai Exiles’ Facebook page

UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)

Updated: November 13, 2024, 1:13 PM`