How You Feel About Money

How You Feel About Money

Posted September 14, 2021 by Michael Batnick

There is one thing that trumps everything else when it comes to how you feel about money. It doesn’t matter how much you make. It doesn’t matter how much you’ve saved. It definitely doesn’t matter where interest rates are. The thing that most influences how you feel about money is how you grew up around money.

I’ve been thinking about this while listening to Ramit Sethi’s podcast. Ramit sits down with a couple in every episode where one or both partners feel anxious about money. The kicker is that in most situations, these people make a nice living. Each story is a little different, but it seems like they all have one thing in common. They faced financial hardships as a child.

A listener sent us a post on the Bogleheads forum, I’m 70 years old and I can’t spend my savings.

He says, “I can’t spend money without feelings of anxiety. It’s really painful.”

He then goes on to list a bunch of big-ticket purchases he makes. He even seems to feel good about them:

Daughter needed new car – $16,000, done earlier this year.

Furniture – last week my wife said I want to replace all our furniture with some really nice stuff. Will probably cost $15-$20,000 minimum. I said great, let’s do it.

But he doesn’t feel good about any of this. In fact, “none of this makes me happy,” he says. “Every expenditure is accompanied by moderate anxiety.”

I should point out that there is no financial reason for his anxiety. He has a $6 million portfolio and a $1 million house. Later in the post he gets to the root of the problem, saying:

I think I know where this comes from – my father (a big influence on me) was born in 1920. His father died in 1932 (think about it ….). My father was extremely frugal, and he never invested as single penny in the stock market. Growing up in the 1920/1930s he distrusted it 100% for the rest of his life.

You’re not rich if you’re afraid to spend your money. This person needs help, and clearly, it’s not with his finances.

To continue reading, please go to the original article here:

https://theirrelevantinvestor.com/2021/09/14/how-you-feel-about-money/