I have a confession to make: I teach others about personal finance, but I have an unhealthy relationship with money. By most accounts, I am great with money. Frugality comes naturally to me, and I find it easy to save money and pay off debt. I’ve paid off over $60,000 of student loans so far and am on track to have the rest of my debt paid off by the end of this year.
To most people, this would look like financial success. Although paying off debt is certainly a smart move financially. However, my motivations aren’t entirely healthy. My relationship with money is unhealthy for a few key reasons.
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I Feel Undeserving of Money
After I finished grad school, I found myself underemployed and buried in $75,000 of student loan debt. I felt immense regret about my debt. I pride myself on my ability to think long-term and to plan ahead, so I felt like a complete failure. Why didn’t I realize that my student loan payments would be $816 per month? How could I not have seen this coming? Why did I believe student loans were my only option? Why was I so naïve?
I decided to pay my debt off over just a few years, which required me to drastically reduce my spending. I’ve adopted a three-year spending ban. I tell myself that the purpose of this spending ban is to allow me to pay off my debt more quickly. Is that the real reason, though?
I don’t want to get caught in the “But I deserve it” trap. Many people are trapped in debt because they’re convinced that they deserve to buy things they can’t afford. While paying off debt and avoiding the “But I deserve it” trap is smart, I believe this perspective can be taken too far.
Have I adopted my spending ban because I “deserve” to be debt-free more than I “deserve” to buy shiny new toys? Perhaps. Or maybe my spending ban is a way to punish myself for the bad decisions I made in the past.
I Feel Anxious About Money
Debt has a way of creating an enormous amount of anxiety for many people. Before I began the debt snowball on my loans, I worried about my debt constantly. I felt like I’d be trapped in debt forever. Paying off a big chunk of my debt has lessened the amount of anxiety I have about money to some degree.
However, I wonder if I’ll ever truly feel financially secure. Having an emergency fund is smart, but when will it be “enough”? Will I stop worrying about money when I have $10,000 in the bank? $20,000? $30,000? I’m not sure if the anxiety I feel about money will ever disappear, no matter how high my net worth climbs.
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I Feel Guilty About Spending Money
My situation is drastically different than it was just a few years ago. I started off with $75,000 of student loan debt and an annual income of $30,000 per year. Now, I only have $14,000 of debt left and my income has increased. I’m able to make much larger debt payments now than I could a few years ago. My progress is speeding up, but I still feel guilty when I spend money on any nonessentials. I know that “cheating” on my spending ban and spending $20 here and there isn’t going to make much difference. I’ll still be debt-free by the end of this year. Yet, I still feel this nagging sense of guilt whenever I spend money.
Paying off debt and building savings are two admirable financial goals. I’ve paid off a big chunk of student loan debt, and I plan to build a $20,000 emergency fund next. That being said, my relationship with money is complex and unhealthy. I feel endless anxiety and guilt about money.
As I begin to build savings and get myself on a steadier financial footing, I hope that I can learn to forgive myself for my financial mistakes. I also have to accept the fact that I can’t control everything. I can plan ahead and try to make smarter choices, but who knows what the future will bring. Maybe in time, I’ll learn to feel more secure and confident about money.
Click to read more about how one guy paid off $40,000 in student loan debt in two years.
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