Is Your Need For Control Killing Your Frugality?
On most days, I’m a highly analytical person. I pride myself on being rational, on believing in facts and figures, on using my unique human ability to reason and logic my way through problems and puzzles.
I think this is why personal finance wasn’t too difficult for me to wrap my head around from the get-go. I’ve been saving money ever since I could earn an income because it was the only rational thing to do in my mind. If I don’t want to worry about money, I need to make and save more of it. Simple addition.
Howdy! While Mr. Frugalwoods and I enjoy/attempt to survive our very first month as parents to our daughter, Babywoods, I have a delightful slate of guest posts from my friends lined up for your reading pleasure. Today, please welcome the talented Kali Hawlk from Off The Rails!
By: Kali Hawlk
Making the move from saving to investing was an easy one, too. Once I understood compound interest, it was another situation where the numbers showed me a clear path. Simple multiplication. But here’s the thing: I’m highly grateful that in my young life I’ve not experienced much strife or struggle. Sure, I might not have been livin’ large and there were times where I had to budget out every last cent or live out the cliche of surviving on Ramen. But I always had enough — barely enough, just enough. But I got by.
From this vantage point, it was so easy to base my decisions with my money off math and numbers. Behavioral finance? Money mindsets? I didn’t really understand why smart people who could do the same simple math I could made dumb decisions about how they used their money.
Couldn’t they see that they were overspending and ending each month in the red? Couldn’t they see their high-interest debt was costing them money? Couldn’t they just STOP DOING stupid stuff with their money?
About a year ago, I ran smack into my first experience with the reality that personal finance is more than just numbers. It’s about our personalities, our behaviors, and what’s going on around us.
When Frugality Flies Out the Window
That thing I ran smack into? It was a divorce. The process wasn’t legally messy and no one lost a lot of money or was kicked out of the house. But it sent me into an emotional tailspin and suddenly upended the life I thought I would always lead.
I felt like I had no control over anything, even though I actually had more control over my individual self–and money–than I’d ever had before. I also felt like the future was more uncertain than it had ever been, and I’m not a fan of things being up in the air or unknown.
Before this happened, I was extremely frugal. I lived for years off the budget I created for myself when I graduated college, even when I could afford to spend far more than I did. That surplus went straight to savings, and then to investments. I was determined to reach financial independence by the time I turned 35 and funneled every last dollar I could into my investment contributions.
Once my ex and I separated, that habit snapped too. I never spent more than I earned, but for several months I saved nothing at all and instead just spent, spent, spent. I abandoned my frugality and leapt gleefully into the experience of makin’ it rain.
I got a weird rush from doing this; I was almost manic in how I would look for the next thing to spend on. More than once as I signed receipts or added up extravagant restaurant bills, I got the sense I was looking down from above on the whole scene–an out of body experience triggered by these new (and ridiculous) spending habits.
Manufacturing a Sense of Control
Only later did I realize what was going on during those few months.
Even though it was the right thing for me to do in the grand scheme of my life, initiating my divorce was akin to setting off a bomb. Life exploded outward and left everyone scrambling for cover. I stumbled around, dazed and uncertain of which way was up.
In this bizarre, foreign state, I clung to one thing that satisfied my need for control: the fact that I could decide how to use my money. And man oh man, did I use it up. It didn’t seem to matter that I was making bad decisions–the fact that I was making a decision was enough.
I completely manufactured a sense of control and as a result, my frugality took a serious blow. This experience taught me that my need for control can drive me to do self-destructive things. And that’s dangerous and something I need to recognize about myself and be aware of in the future.
Learning to Let Go in Order to Regain Control
I’m extremely lucky I work with hundreds of CFPs and financial advisors, and count many of them amongst my close friends. It was a financial planner who asked a few hard questions that had me hit the brakes.
The conversation started when I asked if he’d like to hang out. “We can go grab dinner!” I chirped, thinking of course hanging out meant going out and paying for overpriced food and drinks. But he shook his head and said, “Let’s just go for a walk. That doesn’t cost anything.”
“Oh, come on,” I said (while rolling my eyes), “you make plenty of money. You can spend it!”
“That’s not the point,” he replied. “I’d much rather save my money for something more important.”
Whoa. In that moment I realized how far I’d strayed from my old frugal habits. How far I’d ventured from the advice I used to live by and give to other people to help them change how they thought about money.
On that walk, we talked about money, which was completely natural–what else would a financial planner and a financial writer chat about, right? But this conversation was different, because he challenged me to think about what I wanted and why.
This was my “aha” moment. This was when I realized that what I wanted and why had shifted from where they used to be before I went through a divorce. In fact, I realized that I didn’t know what I wanted anymore, and I was due for a soul-searching session or two.
I needed to let go of the desire to play pretend–to pretend I had it all together, to pretend I knew exactly what was going on, to pretend that I was in control because I was that person who could spend money without worry or concern. Instead, I needed to get comfortable with this new territory, where I was the person who did not have their sh*t together. I needed to accept that was okay, and eventually I’d find my way back to where I needed and wanted to be.
And in the meantime, I needed to realign my spending with my values. While I’m still working through what those values are, I’ve at least been able to step back and realize that all the money I was spending didn’t make me happy or fulfilled. I’ve gone back to basics and I’m slowly recovering from my adventures in overspending.
Instead of wanting to go out every night, I borrow a book from the library and spend lots of time reading (with many cups of delicious tea). Instead of constantly looking for people to go grab a drink with, I go for walks and runs. Instead of breezily spending money with no planning or mindfulness, I focus on my work and my writing and how I can improve both.
And most importantly, I can move forward with the understanding that personal finance is not always about the numbers and the math. It was a hard lesson to learn, but one that I’m glad I finally picked up on. Because life isn’t always easy, straightforward, or simple, and it’s all too easy to lose your grasp on the frugal habits that will serve you and your financial goals so well.
Have you had an experience that caused your spending to spiral out of control?
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