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Ask Dave

The Embarrassment Of Riches

It can be hard to do, but Dave explains a way for Connie to get over her concern about buying luxuries that she can do because she saved money.

QUESTION: Connie asks if it’s common for people with pensions and money saved up to feel weird or tight about spending money on luxuries. Dave says it is, and why that’s such a common way to think when you’ve disciplined yourself.

ANSWER: It’s very common because you set a 40 or 60-year life pattern of living frugally, and any extravagance feels embarrassing. Even ordering a little extra on the menu can feel wrong. It’s called the embarrassment of riches. You need to loosen that up. You need to say “every time I spend money on a luxury, I’m going to find someone who is struggling and give some ratio of the money you spend to them, hand to hand. If you spend a certain amount, then give them half of what you’ve spent, or 25% or something. That will help you to loosen up a little bit. It has to be a small percentage of your wealth, though.

It’s brain damage and stupid to buy a car that’s half your annual income. Practice the enjoyment of money. It’s there to enjoy, not waste or be frivolous and impulsive.