We were driving around France on a budget camping holiday a few years ago, when a sudden heatwave left my wife adamant we should switch to an AirBnB with air-con.

“The heat’s unfair on the dog!”, she said, and she had a point.

However, well into a frugal pension-loading phase of my life, having to scrape the cobwebs off my debit card and fork out for even the most basic AirBnB filled me with anxiety.

Even today, if a bill hits the door mat, I still get a pang of anxiety at having to spend money I’d really rather spend on something else.

It’s not reckless spenders who suffer such anxiety when spending money, it’s the opposite – the more frugal you are, or the more you care about building a financially stable future, the more anxiety you are likely to feel whenever you purchase anything.

It’s not just big purchases either.

The thought of an extra 30p for oat milk in your latte can fill a frugal spender with dread.

But it shouldn’t be like this.

The point of saving is to enjoy your life later, but that doesn’t mean you should sacrifice your life now, or live in a state of constant panic about buying your groceries.

Let’s take a look at how to cope with the anxiety of spending money…

It’s not uncommon to feel anxiety when spending money

Firstly, there’s nothing wrong with you.

Money anxiety is surprisingly common, especially if you’re frugal, striving for financial independence, or care about your future.

Money comes and goes, and there will always be stuff in life we must pay for – bills, groceries, or dastardly parking fines when you’ve read the sign wrong.

The trick is to accept this is normal. It’s part of life.

Stuff like that we just need to pay for, and move on.

I spent 12 years in Perth, Australia, which locals would often refer to as a “police state”. Unlike the UK, minor driving mishaps in Perth will often result in a fine.

A few personal experiences:

• Driving home on an empty motorway at 2am resulted in a fine when the speed limit reduced from 110 km/h (68 mph) to 100 km/h (62 mph). The police were hiding in a bush directly behind the sign, flashing.
• Parking on private land and being given a parking ticket – appeal refused.
• Crossing a single white line on my motorbike when I pushed myself out of the way to let a police officer on a motorbike behind go past, and then having him fine me for it – appealed, went to court, and was told by the magistrate “Motorbikes are silly vehicles which deserve to get fined.”

Each incident struck me with a whip of anxiety, until I tweaked my mindset and classified these fines as unavoidable “Perth Tax”.

It’s these minor adjustments in mindset, and planning for such eventualities, which can help us cope better with the anxiety of spending money.

Anxiety when spending money is healthy

You feel anxiety when spending money means you are financially aware, and that’s healthy.

Frugality is healthy because it means you’re not being sucked into the same clever marketing and consumerism your friends and relatives are.

However, it becomes unhealthy when the little anxiety monster in your brain makes you:

• Panic over small and unexpected expenses.
• Track every single penny.
• Feel guilt over normal spending.
• Feel irresponsible for spending money you worked hard to earn.

These issues aren’t about the money itself, they’re about control and safety.

Let anxiety guide you towards sensible purchases (and help you avoid all others)

Our spending is very much a balance between joy now and an easier financial future.

It’s hard to find a balance, because not spending money on things you want (or think you want) is a cause of anxiety.

It is better to assess whether a purchase is something you really need (an essential purpose) or whether it has real life value (I talk about this mindset a lot in the book), which helps you decide whether it’s money well spent or not.

If it’s money well spent, go ahead and buy it, and don’t be anxious about it.

Life experiences, assuming they’re not bought on credit, are always worth paying for.

A Rolex watch isn’t. No matter how impressive it is.

Ask yourself if the future you will look back and say “I’m so glad I took that trip to Vietnam”, or “I’m so glad I spent all that money on that watch which has spent three decades hidden in the sock drawer”.

Whenever you have the urge to make an impromptu purchase on Amazon, sit on it overnight and see if it still makes sense to buy it the next morning.

If you feel anxious about buying something, it could be a sign you don’t actually want to waste your money on it.

And if you feel anxious having purchased something, treat that as a lesson not to make the same mistake the next time around.

How to stop being anxious about the money you spend

The best ways to cope with money anxiety are through planning, and setting clear clarity and boundaries.

There’s no one-solution-fixes-all, so instead I’ll cover various strategies which make work for you:

1. Have control over your finances, or allocate a pot of money for worry-free purchases

Anxiety thrives on uncertainty, so having a good grasp of your finances and monthly expenditure is a great start to feeling better about things.

This isn’t something I’m overly good at, but you may find tracking your finances with a spreadsheet, budgeting app, or an expense journal can offer you relief.

When you have visibility (and control!) of your finances – savings, income, and bills – your brain will stop filling the gaps with anxiety.

2. Build an emergency fund

The most anxiety-inducing expenses are the ones we don’t plan for. These can be unexpected car maintenance bills, impromptu vet visits, or an unexpected bill coming in.

Nothing reduces the financial stress of these inevitable events better than a financial buffer.

Create a separate bank account, and set up a monthly direct debit to start building it. Aim for enough money to cover worst-case-scenarios over a 3 to 6 month period – ideally enough to get you by if you suddenly lose your job.

Once you’ve reached a suitable amount, simply top it up as and when necessary.

Having that emergency fund will really take the pressure off. Need to pay for something – pay it, and forget about it.

3. Mentally reframe small financial mistakes

We can’t avoid spending money on stuff we later regret (sometimes almost immediately).

I recently purchased a Marshall Bluetooth speaker at a local auction house, only to find the two letters “AF” in the description meant “as found” – or in plain English, absolutely shafted and you have no chance of getting a refund.

That was a harsh £100 lesson, and the lesson I learned was to not visit the local auction house – too much temptation for unnecessary purchases.

In these situations it’s best to pay the money, treat it as tuition fees for life experiences, and never make the same mistake again.

The same applies to fines, forgetting to cancel a free trial, buying a cheaper alternative which breaks within a week, or not planning ahead and having to buy an expensive sandwich at an airport to satiate unexpected hunger.

Unavoidable, so not worth fretting over – just make a mental note to prevent these small financial mistakes in the future.

4. Some anxiety isn’t actually about the money

Sometimes the anxiety we feel about money isn’t really about money at all. It’s just your brain telling you to chose money as the thing to worry about. Our early ancestors survived from worrying about stuff – like ravenous wolves hell bent on eating them – and that worry is what kept them alive, and led to you and I existing.

These days, those same parts of our brain cause us to worry… about things which aren’t life or death. This means, an unexpected expense like a parking fine or regrettable purchase causes our minds to react as if something much worse has occurred.

In these situations, we need to address the root of the anxiety itself, which is the stress response behind it.

For some people that can be addressed with exercise, meditation, going outside and getting fresh air, or simply talking things through with someone they trust.

Because the real problem wasn’t the bill.

This syndrome can worsen if we become more frugal in life or focus on investing for our future, simply because we realise how money affects our lives, and how money can change our lives.

5. Separate your finances from others

This is a big one if you have shared accounts, such as with family or a partner. Blurred financial responsibility is a cause for constant stress.

My wife and I have a shared account, and this is me preference – thankfully our views on money align. However, for many couples this isn’t the case, and if this is you then it’s totally possible to maintain a healthy relationship with separate accounts.

When you know what’s yours, and what you’re responsible for, then your financial situation will be a cause of less unnecessary anxiety.

Achieving the quiet goal of financial independence

Let’s round this off with an end goal, as knowing what you’re striving for is a great way to reduce anxiety while you’re getting there.

Just like the stock market has ups and downs (and downs can feel disastrous), keep in mind there will be hurdles along the way.

What is your end goal?

Is it to pay off your mortgage before you retire? Or to build a pension pot of millions?

Whichever it is, keep that focus.

Forget about small financial mistakes – they happen. Shrug off the anxiety you feel about purchases, and use them as lessons to be better in the future.

With every lesson, you’ll become one step closer to being a master of your future financial decisions.