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 pain for ourselves and those who care about us. This is so true in our money lives. For example, when most people think about problem spending, they think about people who overspend. Yet it can be equally problematic for someone when they underspend, when they 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? Well, let’s look underneath the surface of the behaviour to understand what’s going on.

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 individuals 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 that they can imagine. And whilst it’s financially healthy to plan ahead, financially anxious individuals 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 recognize 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 an individual 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 impact 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 the 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 negative impact 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.

Strategy, one is acknowledge and normalize, 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.

Number two, do the math with an advisor you trust. After validating the emotional side of the struggle to spend, it may be beneficial to speak to a trusted advisor who can help you review data and facts of a situation. We might discover that some fears are unfounded in their present financial reality.

Strategy three, define your abundant life. Explore if a lifestyle upgrade might bring you increased joy. Paint a vivid picture of new possibilities and be specific.

Next, write up permission slip. After you have defined an abundant life, you must give yourself permission to pursue it. In order 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.

Finally, strategy five. Practice living an abundant life. After identifying ways of spending leads to new kinds of comfort or enjoyment, it’s time to practice. 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 we’re hard at first, changing spending habits will grow easier over time.

By walking through these steps, you can feel more free and 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, whilst allowing yourself to savour and enjoy today.