I work full time in a local bookstore and try to put a bit of money aside every month. I’m 28 years-old and one day, I’d like to have a place of my own and a family.
But my friends keep saying it’s hopeless to even aspire to such a future when we’re saddled with student debt, house prices are only going up and there’s a rising cost of living.
They say I might as well enjoy my life, spend what I make, travel and have fun. Part of me thinks they are being irrational but then again why should I save when I’ll never make enough to have the life I want?
Doom spending might be a short-sighted strategy, not just financially but psychologically too
Money psychotherapist Vicky Reynal replies: It sounds like speaking to your friends has left you feeling quite discouraged about your future financial prospects. It’s hard for many people in your generation to feel they have much agency in achieving a financial future similar to the one they watched their parents accomplish.
What your friends describe is known as ‘doom spending’ and it’s clearly tempting for them as it makes them feel as if they have a sense of control, at least on their short-term enjoyment. That’s far easier to do than sitting with the powerlessness and ‘financial helplessness’ that comes with putting money away but feeling it won’t get you anywhere in the long-term.
But this kind of doom spending might be a short-sighted strategy – not just financially – but psychologically too.
Firstly, because you might find that the benefits of spending (such as the highs we get from buying something we like and being impulsive with money) do not last long, while the guilt that sometimes follows means that you might not end up feeling better as a result of your spending.
You might also feel guilty if you are not fully convinced by this strategy, and a part of you knows that it’s hurting your freedom to change your mind down the line. It will also decimate the pot of money that you have been building up.
Secondly, if the spending comes from the ‘wrong’ emotional place then it can easily spiral and you might end up spending more than you can afford.
What do I mean by ‘wrong’ emotional place? Rather than it being a deliberate and conscious choice (‘I am going to enjoy this money and I am happy to do so’), it comes from anger. Or maybe spending becomes the way in which you cope with your financial anxiety about the future.
But if you end up in debt as a result of spending mindlessly and impulsively because you are angry and frustrated then you might have sabotaged not just your future financial prospects but also your short-term financial situation. And that won’t help how you feel.
In fact, it will add financial anxiety to the mix of feelings you have because you will have compromised your financial resilience in the short term by your inability to meet unexpected expenses. Rather than feeling freedom, you may well be left with a sense of precariousness and instability.
I am not advocating you hold on to false hopes, but you can focus on what you can do to be in a better financial situation in the future. Consider alternatives to the financial goals you had initially envisioned if they do seem unattainable.
Maybe home ownership feels unlikely. So can you allow yourself to replace it with objectives that still seem worthwhile and which – with a bit of smart budgeting – you can still feel pleasure in achieving and satisfaction in obtaining?
You can allow yourself to feel the anger of the uncertainties you have to deal with such as high cost of living, the frustration at the out-of-your-control nature of the factors affecting you in a real way (like inflation).
But rather than act out the feelings and almost spend your hard earned money from a place of fury, you can acknowledge them, talk about them with peers and then you can think about what is in your control.
Having a small savings pot that with time and a bit of exponential growth (compounded interest in financial terms) might build up into more than you intuitively imagine.
It might not be the down payment you had dreamt of, but it may be a good-enough sum that will still give your future self a sense of achievement and freedom to make an investment that feels valuable and that you can get a sense of accomplishment from.
What I invite you to think about is whether that isn’t more worthwhile than spending money impulsively for the short-term highs with no regard for the future.
Your present self might not care now about having money available for bigger investments down the line, but your future self might think differently. Your future self needs to be taken into account too so you are not sabotaging your future options.
- Do you have a question for Vicky Reynal? Email Vicky.Reynal@dailymail.co.uk
