Yesterday I shared a guest post from Leo of Zen Habits. His guide to minimalist money was a sort of overview of good financial skills, useful information for those in the first stage of personal finance. But some long-time GRS readers couldn't relate to Leo's post.
Today's post goes in the opposite direction. It's a meditation for those in the third stage of personal finance (or beyond), and it's probably going to seem foreign to those who are still struggling to get debt under control.
The Evolution of Spending
Before I developed smart money skills, I spent without thinking. I accumulated debt because I had no self-control. I bought what I wanted, even when I couldn't afford it.
To repay my debt and build wealth, I learned to be frugal. I was never able to completely discard my tendency to spend, but I curbed it sharply. In fact, I became so frugal that I would debate whether to use two spoonfuls of hot chocolate mix or three when making a cup of cocoa. (And this was just a year ago!)
I'm still frugal. In my day-to-day life, I make choices to save money in every way I know how. I clip coupons, buy store brands, borrow from friends, make do with what I have. I am a proponent of thrift.
At the same time, however, I've reached a point where it's possible to save for some very nice things. I saved for my used Mini Cooper. Kris and I are saving for a trip to France next year. And this weekend we'll receive a shipment of some nice furniture we've saved for.
Because I've made smart choices in other parts of my life, I'm able to spend well on the things that really matter to me.
The Guilt of Wealth
There's no question that I'm happy about my current financial situation. I'm doing well, making smart choices, and enjoying a balance between tomorrow and today. But not everything is perfect. I've found that I feel guilty about some of the things I can now afford to purchase. And I'm not the only one.
I had lunch with a close friend yesterday. Though he was raised dirt poor (way below poverty level), he's worked hard to obtain an education, to build a career, and he now owns a couple of businesses. It was never his aim, but now he finds he's wealthy. He's proud of his accomplishments — but he also feels guilty.
“I look at my extended family, and they're still poor,” my friend told me. “They struggle. And yet I have a nice house a nice car and everything I could possibly want.” A few years ago, my friend purchased an expensive car as a reward to himself for his hard work. He could afford it, but somehow over the past few years, he hasn't enjoyed it as much as he thought he would. He feels embarrassed to drive it. He worries that his kids will grow up to take for granted those things he views as blessings.
This morning, I walked across the street to pick ripe Concord grapes at my neighbor's house. He came out to help. We chatted as we plucked the juicy bunches from the vine. My neighbor has been retired for fifteen years, and through patience and smart investing has built an enormous nest egg.
When my neighbor retired, one of the first things he did was buy a boat. He spends his summers cruising from Seattle, Washington to Juneau, Alaska and back. (He's invited me to spend ten days on his boat with him next year — I can't wait!) My neighbor told me about the first summer he had his boat. One day he anchored in a little cove. Before long, several other boats had anchored in the same spot. He was embarrassed to see that his was by far the biggest boat. “I was worried about what they thought of me,” he said.
A Strange New World
Both my friend and my neighbor are generous. They contribute time and money to their friends, family, and community. They've built wealth through hard work, and can afford the indulgences they allow themselves. Yet they both feel some degree of guilt over the things they have.
Believe it or not, I've begun to experience some of the same feelings. I know I've worked hard to get where I am today, but I've also been incredibly fortunate. I have a great job. I'm doing something I love, which also happens to help other people. I work from home, so can set my own hours. (I spent all yesterday hanging out with friends, but here it is Saturday morning and I'm working.) I've eliminated my debt and am building wealth. As a result, I can allow myself some of the nice things I've always wanted.
So why do I feel guilty? I never felt guilty about the things I had when I was in debt. I felt I deserved them. I don't feel that anymore. Now that my new furniture is on its way, I don't feel happy to have it, or proud that Kris and found ways to save so much money on it. I feel ashamed that I'm able to afford this while my little brother and his family are struggling to stave off bankruptcy.
Yes, I know that his situation is largely a result of his choices, as mine is a result of my choices. But I know there are plenty of people in this world who have worked as hard as I have, but who haven't had the breaks.
Does anyone else experience this? How you handle it? I've decided that the best thing I can do is to continue my frugal lifestyle, allowing myself occasional indulgences as I can afford them. At the same, I'll continue to help as many people as possible improve their financial situation. Maybe if I can help others achieve wealth, I won't feel guilty about my own.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.
JD, I can completely relate. I was fortunate to have a great job for many years, and, by living frugally, my husband and I paid off most of our debt (except our mortgage) and saved up a comfortable “emergency fund.” We were able to go on vacations, and we were able to purchase what we needed without building up credit card debt. We felt the same guilt about our good fortune as you do – with the result that we donated money and time to a host of philanthropies and our church – and still felt guilty. Now, I have… Read more »
I wonder if there’s more than guilt going on — maybe there’s also a continuing fear, especially when we look around and see that there are so many people who aren’t in as good a place, and there are disasters etc that aren’t in one’s control. But I do think that establishing a committment to generosity does go a long way toward assuaging the guilt aspect. My husband has less guilt about spending money on himself than I do, and I think that one reason is that he is extremely generous; he has established several scholarships that are awarded on… Read more »
I think a lot of people have the same feelings in this economy, especially when it comes to employment. Many of our friends and family are unemployed, and those of us who are still working can’t help but feel a bit guilty. After all, we’re still making ends meet while those we know are struggling and losing everything around them. How do we deal with it? Like you said, everything in life is about choices. I’m not saying that people who are losing their jobs have themselves to blame. At the same time, there are things everyone can do to… Read more »
I don’t feel any guilt – though I do feel incredibly fortunate – but I do feel like I want to *help* family members and close friends who haven’t been as fortunate. I have to really hold back from offering financial help as I’ve heard that can really complicate relationships.
@jdb (#4) Yes, this is a great point. The basic rule of offering financial help to family and friends is: give, don’t lend. That is, if you’re going to provide help, give the money without expectation of it ever being repaid. You may draft loan paperwork (and in most cases, that’s a good idea), but mentally treat the assistance as a gift. And if you can actually make it a gift (and the situation warrants), then do so. @elisabeth (#2) I like the idea of starting need-based scholarships. I’ve mentioned that I want to do more stuff with chairty, but… Read more »
First/Second stage of PF: DENIAL of wealth. People who racked up more in material riches on credit cards and mortgage notes, than most human beings have seen over a lifetime, but still think they’re broke, and are never satisfied. People who complain about how bad they have it, while they’re filling the gas tank of their family automobile, dragging a couple spoiled rugrats home from soccer practice to their aircon McMansion. Third stage of PF: GUILTY of wealth. People who write checks to Save The Children foundations, boycott stuff made in sweatshops in Bangladesh, and start charity foundations for single… Read more »
There used to be a strong American trend of Upward Mobility, it was presumed that it was everyone’s aspiration to ascend through social classes, the lower class strived to become middle class, the middle class aspired to the upper class. But now America has become stratified with less social mobility than ever, the rich keep getting richer, but the middle and lower classes get poorer. Almost all the wealth is concentrated in about 2% of the population. Well there is a counter to all this, I’ve heard it described as “Downward Nobility.” It can be nobler to live a life… Read more »
J.D., I think it becomes difficult to justify living in relative luxury when there are so many people struggling in the world. Sure, some are struggling because of their own poor decisions, but many don’t have the opportunities to succeed like we do in America. The natural tendency of anyone who’s got their finances under control and learned that life isn’t all about them is to wonder how they can help others get to the point where their needs are met and their finances are under control. I don’t, however, think it’s as cut and dry as Frugal Bachelor (#6)… Read more »
I’ve always associated money with guilt. When I was 5 years old I started getting $5 a week allowance, and right away I was told that it was sort of a secret because that was a huge amount at the time (1986) and my friends’ families all had less money than my family. I still feel guilty about money. I was always brought up to be frugal, but I’ve followed that in odd ways sometimes (eating too much food when it’s free, hitchhiking and staying in the cheapest possible youth hostels even though I had the money to go to… Read more »
I actually do feel a little bit guilty sometimes, knowing that I’m taking advantage of a society that doesn’t value the work of (for example) Southeast Asian factory workers the same as it does those in America (do the exact same work and you’ll get paid more for it here), when I’m the direct beneficiary of that inequity. But I also don’t feel like it’s my duty to fix all the injustices in the world. I live with them like anyone else does — some work in my favor, some work against me. Admittedly, for someone in my position, more… Read more »
I think you should read “The Most Patriotic Thing You Can Do” by Mark Cuban http://blogmaverick.com/2009/08/13/the-most-patriotic-thing-you-can-do/
This is not a competition society. Because you have done well does not mean someone else had to suffer. You should take great pride in what you have and continue to accomplish. Just don’t boast that pride. Show it with the way in which you handle your money. Give back. Right now is a great time to spend money to help the economy get back on it’s feet.
One more thought: Sites like this are constantly discouraging us from “keeping up with the Jonses” so to speak. At what point do you reach a minimum standard of living, above which, you’re just trying to “keep up with the Jonses”? Even if, in this case, that’s J.D. Jones? Does your brother really *need* more? Sure, he may not have a mini cooper, but he’s got a warm home, a caring family, and his health, doesn’t he? I have never read you give any advice on this blog that says “you need more than what you are living with right… Read more »
Unless you amassed your wealth by stealing it from others, I do not understand why anyone would feel guilty. Don’t accept guilt you don’t earn. If you value something (like a charity) then give to support it. I am not wealthy (yet), but am certainly doing better than some of my siblings. However, I don’t feel guilty because of that. Why would I? It’s like feeling guilty that you an A on a test because you studied, but your best friend only got a C. Frugal Bachelor made some very good points, all of which I agree with. I just… Read more »
I very much identify with this article, although I am in an admitedly VERY different place than J.D. right now. Believe it or not, my husband and I are both unemployed right now (him through getting laid off; me through choice), and I feel a weird “wealth” guilt because unlike many other unemployed people in our region (metro Detroit), we are NOT having financial difficulties. Let me explain a bit more: this summer my husband was laid off from his auto-industry job when I was in the process of switching jobs. We then had to make the difficult (to us)… Read more »
Oh my…so many directions to go in this area. I’m constantly afflicted by money/affluence-related guilt. For example: 1. Achieving a high-paying, low-stress, flexible (work-from-home) job without working all that hard. The work would be considered challenging to many but it comes easily to me which I think makes me feel even more guilty. My friends went to the same university, are just as smart as me and struggle quite a bit more. Where’s the fairness in that? 2. Having my dad pass away suddenly while in my mid-20s and inheriting a fairly significant sum of money. If you want to… Read more »
When I bought my Acura (with cash) a few years back I’m not sure if I felt guilt or felt I was being extravagant. I’m thinking it may be the latter since I knew I could make do with a Honda or Toyota, but I had to have a little extra luxury. Now when I shop for cars (I’m still driving my Acura) I know I have the cash for a Mercedes or BMW, but I can’t bring myself to get it – mainly because I see it as overkill when I know an Acura would do just fine –… Read more »
I know the kind of guilt you are feeling J.D. I woke up to my crap financial habits when I was 27 and have spent the last 10 years paying off more than $52,000 debt ($10,000 credit cards, $21,000 student loans, and $31,000 in cars and a fertility loan from my dad!). Now I am debt free except for my house, and I look around at my friends and see that I have become the most well-off among us, a situation that didn’t seem possible 10 years ago. I spent some months contemplating how I could share my good fortune… Read more »
I can’t relate at all, but I loved this post. I’m still working my way out of debt, but hopefully I’ll be prepared for what will come when I finally get to the wealth building stage. It’s amazing how many challenges money introduces into our lives- both positive and negative.
I applaud you J.D. for mentioning an idea that many dismiss immediately. That idea is hard work alone will NOT automatically grant you success. You admit that there are others who work just as hard as you do, and yet, you’re the one who caught the break. I grew up watching my parents slave away in the kitchen restaurant to provide the opportunities I have received in life. Without their sacrifices, I could have never made it to where I am today. I graduated from college, got an engineering job, and now work half as hard, and make twice as… Read more »
Great post. Having counseled thousands,the guilt is common. I am not sure why, when we have done all we can do, that we sometimes feel as if it is not enough.
I do think however, this is guilt best kept to yourself. Not showing excitement,and appreciation for the new purchases will definitely be felt by your spouse and hurt feelings and resentment may soon follow.
Keeping a diary and recording the things you do to help others can make those things seem more real. We all try to “help others” but recording how will confirm it.
Very interesting post, JD. I am struggling with some of the same feelings, also, having recently landed a job with a very good income for the first time in my life, while a dear friend of mine has been unemployed for a year. Wish I had something insightful to say, other than that I appreciate all the previous posters’ comments. One reply I would like to offer, to [email protected]: I was a recipent of need-based aid in college. My mom was a single parent, having been abandoned by my dad when I was an infant–definitely not a choice she had… Read more »
This is not a very discussed topic – my whole blog (MoneyChangesTHings) started off as a meditation on just this question – what is money for? but I found very few people with money who were open to discussing it; it is said that people are more comfortable discussing their sex life than their checkbooks. There are several books on the challenges of inherited wealth, but you’re talking about simply having a modest surplus, not vast wealth. Where does the guilt come from? To some extent, it is related to acknowledging how incredibly lucky and fortunate we are – born… Read more »
This is not a very discussed topic – my whole blog (MoneyChangesTHings) started off as a meditation on just this question – what is money for? Once you have enough to accumulate a surplus, you can – of course – keep escalating your life style, but there’s evidence that this does not make you any happier, as your friend with the fancy car observes. In his case, it seems to have actually had the reverse effect. So you need to set guidelines for yourself – what is that surplus for. SOme people just keep on investing it, thinking that the… Read more »
Hey Angie (#21), I was just talking about scholarships- not financial aid. I definitely think financial aid should be need-based, because of all the reasons you mention. Scholarships are different- those were historically given out for specific achievements, but I feel like they have moved away from merit based and toward need based. Also, in the case that parents pay for college, parents who have saved are actually penalized for having saved. Of course, if the child is responsible for paying, that’s another story– but I think a lot of parents do pay, and I have literally heard people going… Read more »
I guess I can understand feeling guilty if you’re doing better than someone you care about, but I think tossing the word “wealth” around is a bit much. I consider people who make $100,000+ per year consistently, own their house outright, and can basically choose to work or not (or they have a profession like a doctor) to be wealthy. Not people who recently got out of debt and can afford to pay cash for some items. I don’t know if part of the bad feeling “wealthy” people feel is because they’re also somehow afraid it could all be taken… Read more »
“Live simply, so others may simply live”, is a
platitude, I think. I am well off, and VERY
appreciative, but I don’t think I feel particularly
guilty. I DO often wonder WHY I’ve been so lucky…..
Btw, I like the saying “Reduce, reuse, recycle” a lot
better.
I can relate. When our 1993 Acura died last year, we were looking for a new car with manuel transmission on short notice. Almost ready to buy a VW Passat when we read that Consumer Reports had very negative reviews re: the electrical system.
A 2005 BMW was the same price, CR car of the year for x-many years. Mint condition. We bought the beemer.
And now, I often feel guily driving around my neighborhood. I feel like I have to retell the car-purchase decision to justify it.
I’m in a weird situation of having double-ended guilt. After seven years between jobs, I finally have a part-time low-income gig (it’s a start) that’s nowhere near my skill level. I have a Bachelor’s degree in a field that’s a tad dormant at present so jobs have been scarce. I’m blessed to have this job at all. But because of the layoffs and other complex circumstances, I found myself broke and impoverished for the first time in my life. Ironically, I also became the owner of three properties without the money to support them: one was my own home, and… Read more »
Seriously, what is there to feel guilty about? You’ve done nothing wrong. Instead, you’ve learned from mistakes and done things right. I understand that you may “feel” guilty. But could it be that the guilt is really just a cover for something else? I would think that when you start acquiring things that you used to see as symbols of overspending, some part of you still worries that you are living beyond your means. Intellectually, you know that you aren’t. But when you’ve gone for many years without spending on frivolous items, I don’t know how you can change that… Read more »
J.D., Unless we’re talking about international-level banking, I do not feel that wealth is a zero-sum game. In other words, your financial winning does not automatically mean that someone else like your little brother is doomed to financial losing. That opportunity is still there for him. Perhaps some of the guilt comes from a mistaken underlying view of wealth as zero sum, when on the scale of individual households, I don’t think it is. The suggestion to donate to microfinance charities is interesting because it allows you to use your wealth in a way that gives the opportunity to another… Read more »
I mostly think that the taste of the freedom outweighs the guilt of being where you are. I work for the collection department of the 2nd biggest credit card issuer in the world (To not say whom…) and what you preach is gold. Most clients that I’m talking to are not builders there are simply copying whatever what their parents did, without even creating their own opportunities or personalities. They hardly make any decision, they simply react, which is the difference between achievers and followers. There is a song I like to hear out when I’m a bit down, I… Read more »
I assuage the guilt by donating both time and money to various charities. I help build playgrounds, renovate low-income housing, organize toy drives, etc. Also, since I’m a big proponent of education and helping people help themselves, I do lectures at a local college on personal finance. And when individuals manage to wear me down, I’ll do one-on-one counseling…which can sometimes drive me batty because some people are only interested in get-rich-quick schemes.
My family is still dirt poor, and it’s a constant struggle to keep from trying to go out and “save” everyone. I’m a teacher at a district that pays well. Most of my family still works for minimum wage, so comparatively I am considerably wealthy. I can afford vacations, a home, and a few other toys. Personally, I think I feel a little better when I bring my family along for the ride on nicer experiences which they’d never be able to afford on their own. Obviously I can’t include all of them all the time, but I can alternate… Read more »
My parents immigrated from Europe in 1953 with not too much more than some suit cases of clothes, as many immigrants did at that time. We lived in rural Southern Alberta on a small farm where we grew our own veggies and raised our own livestock. I remember spending summers shelling peas, shucking corn, canning, freezing, baking, etc, etc. We threw very little away and recycled all kinds of things. I don’t know specifics but I’ve got a pretty good idea of what my parents’ net worth is now and I’m seriously amazed. They saved and lived very simply all… Read more »
feelings of guilt are normal and they will always be there as long as there is a gap between the haves and have nots. and i think that there is nothing that anyone can do about it. if one gives to charities and to the less fortunate, then it means that you are a good steward with the resources that were given to you. the guilt of buying things that few people have and may never own is a feeling that i know all too well but i have learnt to live with it. i think that those seemingly uncomfortable… Read more »
Your blog, following it, was actually incredibly helpful to me in climbing out of debt. “I have no words but thanks, and thanks, and ever thanks…” On the other hand, I was recently fortunate enough to be able to offer a room to a friend of my daughter’s whose parents were unable to offer housing due to their own homelessness (I already house and board a college friend of mine who makes less than she spends on transport to and from her work as a server in a diner… thanks, Mr. Pink!) When filling out paperwork for my daughter’s friend… Read more »
I wanted to say I don’t make too much money in a year. When others commented here about their income being sizeable I’m assuming at least $50,000+ per person. Well I would venture to say I only make say $30,000 pretax. I none the less feel more fortunate and as a result guilty for my position. I don’t carry any credit card debt. And don’t have student loans at the age of 26 I feel fortunate that I can put sizeable portions of what I do make into savings after rent. I get to live out on my own withot… Read more »
Hi J.D., I don’t doubt you feel some guilt about the status of others, but as previous commentators have said you probably feel some uncertainty, too. I wonder if the uncertainty isn’t so much that it could all be taken away from you, but about who you are now you have this money? More than most, you have identified your personal life with your financial well-being. You have contributed an outstanding blog to the field of personal finance, based on your journey out of debt and into financial security. In recent posts you have been making the transition to living… Read more »
This post reminds me of a discussion I once had with my best friend over the difference between jealousy and envy. Jealous people see someone in a nice car and think, “Man, I wish I could afford one of those. Maybe one day!” People green with envy look at the same person and think, “If I can’t afford that car, he shouldn’t get to enjoy it either!” In other words, they don’t admire your success and want to work for it themselves. Rather, they assume you built your wealth on someone else’s back and are flaunting it by driving that… Read more »
Buying yourself something is perfectly fine as long as you see it as a treat for all your hard work. When you identify yourself and your ego is attached to the new object (ex:car) that usually spells trouble. A car is just metal on rubber. In the long run it will not make you a better or happier person.
I´ve read this blog for a long time and i love this blog! you write in a way that really helps me. For instance, a co-worker told me to never buy a cup of coffee, because it´s so expensive, but instead she puts her money on thing I never would. “Do what works for you” 🙂 I live in Europe, and because of that some of your posts are not applicable here. I will soon take debt, because I want to have surgery done that improves my life very much. No one pays for that surgery, but I think it´s… Read more »
Like Sherry (#13), I think you no way should feel guilty for what you’ve achieved by hard work and planning. In fact, I’d argue that this type “false guilt” is at the root of many problems in our society. So many people these days have no idea of the principle of cause and effect. They think that affluence falls out of the sky and lands randomly on this or that person–they don’t connect the reward to anything they personally do. While it is true that some people work hard and end up poor, it is just not true 99% of… Read more »
I don’t feel guilty about spending money on my own favorite indulgences–such as buying “better” seats to a concert when I already have good ones in hand–if my finances allow me to then be able to turn around and do something wonderful like hand my “good” seats to a random mom & kid who’d only been able to get seats at the very back of the theater. I end up enjoying the experience twice as much bc I have the joy of seeing someone else made happy as well as the pleasure of the concert itself. This is what I… Read more »
I can totally relate to your post, since I’ve been expert at feeling guilty almost all my life. Here’s how I’ve conquered my guilt: 1. Ask yourself: if your guilt had an purpose, what would it be? I’ve learned that we think what we think and feel what we feel because one part of us believes that it is good for us to think/feel that way — that it saves us from something bad or gives us something good. I used to feel guilty because it made me feel like a better person. (Just like I used to constantly worry… Read more »
Thank you commenters. I wanted to make my own comment about “guilt”, but I got so much from your comments, I’d like to write about that. All of these commenters that have acquired wealth, or some wealth, have done it by their own hard work. And the desire to give back seems to be what we’re really all about. We now have security, wealth, comfort, how can we now help others. I don’t think we feel guilty because we have this wealth, it’s that we yearn for others to have a better life. It really is a matter of perspective.… Read more »
Interesting topic, JD. DH and I have been in phase 3 for a while. I have some guilt for being well-off while others aren’t. Different reasons, though, I think: — I feel guilty when I had advantages others didn’t — I won the birth lottery in most ways that counted. Most causes I support are about disadvantaged people in less-secure parts of the world, and for improving educational opportunities for children. — I feel lucky when we are equally smart and worked equally hard (or they were smarter and worked harder), and things worked out better for me for reasons… Read more »
Oh and three resources that relate to these questions: Dan Gilbert’s talks on happiness at TED: – http://www.ted.com/speakers/dan_gilbert.html Brian Tracy, Luck factor -audio program – http://www.nightingale.com/prod_detail~product~Luck_Factor.aspx Paul McKenna, I can make you rich -book – http://www.amazon.com/Can-Make-You-Rich-Book/dp/0593055373 (US) – http://www.amazon.co.uk/Can-Make-You-Rich-Book/dp/0593055373 (UK) — And I forgot to mention that yes, I understand that if someone is born in the worst ghetto of L.A. or at a refugee camp in Africa, they probably won’t achieve the same amount of money as easily as someone who was born in a dirt-rich western family, but that doesn’t mean that they couldn’t feel wealthy and happy,… Read more »
Hey JD, You can feel less guilty about what you have if you appreciate it and don’t take it for granted. You don’t see yourself as better because you have bigger stuff. You embrace what you have, and are happy to use it, but you appreciate it. You really appreciate it; not just saying you’re not taking it for granted aloud or to others, but feeling it deep inside. You don’t get used to having it, and continue to work at it to make it better. The same can go for great relationships when you see others around you with… Read more »
I’ve not read through all of the comments because I wanted to express my own thoughts. I feel guilt when I’ve done something wrong. I feel badly when someone else points out that I should be doing something I don’t want to. I feel uneasy and badly when presented with someone else’s jealousy over my perceived wealth. I grew up in a family with money. My father’s parents were quite wealthy – enough so that when grandpa died he donated $50 million to the hospital he worked at so they could open a teaching wing. My mother’s side was middle-class… Read more »
I was just thinking about this yesterday. This very topic. Why? Let me explain. I just took a vacation to Crete. I earned the money teaching English. I looked for the best deal and had saved enough for my two daughters and myself. I went with a lady from our church who has no family and needed someone to travel with since her health doesn’t allow her to travel by herself. I live in Poland so it’s not like it’s as far as from the states and I could do the whole thing (flight, hotel, food) for approx. $600 each.… Read more »