Partha Iyengar

Overcoming the Fear of Spending Money: Empowering Yourself to Financial Freedom

Explore the psychology behind the fear of spending money and expert tips to successfully regain control of your finances.

Overcoming the fear of spending money: Empowering yourself to financial freedom


Hey there, it’s me, Partha Iyengar, a financial coach and your guide on this journey of holistic financial well-being. Today, I want to dive deep into a topic that I have seen affecting many people across the world: the fear of spending money. I especially hope to shine a light on women dealing with this issue.

A study in 2021 by Fidelity revealed that around 34% of women worry about their finances at night.1 Know that you are not alone, because you’re not the only one who feels this way. Being worried about not being able to pay for utilities, bills, and groceries is a normal human experience. However, if this emotion vehemently evades other areas of your life, you may have to dig deeper. How and when did this fear of spending money develop? It may be a result of financial insecurity or a lack of knowledge about personal finance. This fear can be paralyzing, preventing you from enjoying the things you truly want and need. 

I understand how this fear can affect us, and together we can tackle it head-on and reclaim control over our financial lives. According to another study, 65% of women reported being anxious about their personal finances, compared to 54% of men.2

As a financial coach who is committed to helping women succeed in every aspect of life, I’m writing this blog post, and I will go through the root causes of where this fear may stem from and explore strategies to help overcome it. 

What is the Fear of Spending Money?

Let’s talk about the fear of spending money, or as it is psychologically known, “Chrometophobia”. It’s the nagging fear tied to scarcity, the unknown, and making the wrong financial decisions. It can bring guilt and anxiety, even when our financial security is intact. This fear can have major implications for one’s financial well-being, which may also prevent them from making necessary purchases even when they’re affordable and within the person’s means. I may not have had an intense phobia of spending money, but I’ve felt the unease it brings .

The psychology behind the fear

Before we conquer the fear of spending money, let’s understand where this fear stems from. It often comes from facing financial challenges, growing up with money issues, or past financial mistakes. Sounds familiar?  

Common reasons behind the fear:

  1. An upbringing in poverty or currently experiencing poverty
  2. Dysfunctional family dynamics where money caused several problems 
  3. Past financial mistakes 
  4. Faced excessive debt in the past or present moment 
  5. Poor investment decisions 
  6. Money is seen as something to be hoarded during childhood or currently 
  7. A lack of or poor financial literacy and decision-making skills
  8. Volatile economic conditions in the country 

It’s important to note that not everyone who feels money anxiety for these reasons has Chrometophobia. Seeking professional help will be highly beneficial, as the therapist can help diagnose if one has a phobia of money and provide aid to overcome it.

What the fear of spending money may look like

The fear of spending money manifests differently for everyone. Recognizing these behaviors, patterns, and thought processes is key to addressing the issue. Here, I’ll dive deeper into the common ways in which the phobia of money is prominent:

1. Excessive hoarding of money

This goes beyond responsible savings. It’s a tendency to accumulate wealth, even if it means sacrificing your quality of life. You might find it strenuous to part with money, even for essential needs or experiences that could enrich your life. 

2. Missing opportunities for enjoyment and growth

Money is a tool for personal development, growth, and enjoyment. This fear may lead you to miss out on experiences of self-improvement that could help you grow and find happiness. You might find yourself hesitating to invest in self-enriching experiences.

3. Increased stress and anxiety around finances

Constantly being afraid to spend money can significantly impact your mental and emotional well-being. This fear can lead to chronic stress and anxiety, affecting your overall quality of life. 

4. Lack of socializing where spending money is required 

Avoiding social interactions that involve spending money can result in increased isolation. This isolation, driven by money anxiety, can damage your interpersonal relationships and limit your overall happiness. 

5. Constantly seeking validation and reassurance around one’s financial security 

Individuals with this fear may be in constant need of assurance from those around them regarding their financial matters. This can put a strain on relationships and hinder your ability to develop your financial decision-making skills. Consider professional advice from a financial coach, advisor, or therapist to build up your financial independence. 

Identifying the Root Causes of Your Fear

Understanding the root cause of where your fear stems from is the first step in unraveling one’s anxiety around money. 

Childhood experiences and beliefs

1. Messages about money from parents and caregivers

You know, the inner script we carry around with us about money often isn’t our own. Our early upbringing plays a big role in our outlook on money. Think about how your parents handled finances or spoke about money matters. If money was a constant cause of tension, it might have left a mark and manifested as a fear of spending money. Growing up in a home where money caused problems can lead to a reluctance to spend in adulthood. 

2. Traumatic financial events

Maybe you have been neck-deep in debt or faced the looming shadow of bankruptcy. These experiences can scar your financial outlook, where withholding spending money is used as a means of gaining control. 

Societal and cultural influences

1. Media portrayal of wealth and spending

The outside world can be pretty influential, don’t you think? Social media is full of people living super luxurious lives, and brands constantly tell us what we should buy next. This can lead to feelings of insecurity and anxiety around money.

2. Social pressure to conform to certain spending habits

Social pressure around buying a house, marriage, owning a vehicle, and hitting certain milestones within an age range can impact a person’s financial decision-making ability. Individuals may adhere to restrictive spending habits to reach these milestones. This societal pressure may create unrealistic expectations, and material possessions may take precedence over enriching experiences.

Understanding how this fear manifests in your life is the first step to overcoming it. I’ll explore strategies to break free from these patterns and empower you to make confident, mindful financial decisions on your own terms.  

Strategies for Overcoming the Fear of Spending Money

1. Challenge your limiting beliefs

Dive deep into what particular subconscious limiting beliefs or scripts around money you may currently harbor. Analyze these negative beliefs and ask yourself how they affect your financial decisions. For example, the limiting belief that spending money is inherently bad or “I am not good at handling money” can be replaced with empowering positive statements. Identifying your limiting beliefs is the first step in overcoming your fear of spending money and beginning your journey towards holistic financial well-being. You can break this cycle by instilling a positive money script and making small changes. 

2. Start small and gradually increase your comfort level with spending

You can slowly but surely begin taking action against your limiting beliefs about spending money. This is a wonderful step in building up your confidence and ability to make financial decisions. As you become more confident in managing your finances, you can gradually increase the amount you are comfortable spending while still staying within your means. Remember to celebrate small victories while achieving your financial milestones along the way. 

3. Create a realistic budget and financial plan

Working together with a financial advisor or coach can help you build a realistic financial plan tailored specifically to your financial circumstances and tackle your fear of spending money. They can help you understand specific strategies, areas of budgeting, spending habits, and why you’re afraid to spend money and how it can be resolved. They will monitor your progress and make necessary adjustments to ensure your budget remains achievable in the long run. With this expertise, you can gain the confidence and knowledge needed to take control of your future and build a secure one.  

4. Practice mindful spending

This practice will help you make intentional financial choices and review their impact. Set clear spending intentions that are in alignment with your needs, wants, and priorities. Gradually challenge yourself to make purposeful and deliberate purchases, focusing more on experiences that enrich your life. It is important to check in with yourself and look for areas where fear may be influencing your decisions. As you become more and more mindful of your spending habits, this practice will help you build up your ability to make empowered financial decisions.

5. Seeking professional help and support if needed

Consider consulting with a financial advisor or therapist who can provide valuable guidance and tools to overcome this fear and help develop better spending habits. Keep in mind that there are various reliable support options available. Joining support groups or seeking online resources dedicated to managing financial anxiety can offer a sense of community and aid. 

6. Educating Yourself About Personal Finance

Pursuing financial literacy is a crucial step towards holistic financial well-being. By learning deeply about financial concepts like saving, budgeting, and investing, you can make informed decisions about your finances and feel more confident in your spending habits. Learning about personal finance can help you develop a healthy relationship with money, allowing you to prioritize your financial goals and make intentional choices that align with your values. 

Developing a Healthy Relationship with Money

Shift Your Mindset from Scarcity to Abundance

1. Building an abundance mindset

We have all, at some point, felt like we did not have enough or we were not enough. I have felt that way too! When one has a scarcity mindset, they have an indomitable feeling of never having enough, even if they do. A scarcity mindset can sabotage your financial discernment and exaggerate your fear of spending money. While switching from a scarcity mindset, which is largely based on fear, may not be an easy decision, it’s still worthwhile. Adopting an abundance mindset helps you take risks and seize opportunities, which a scarcity mindset may hold you back from doing. Feeling abundance is an inner choice, regardless of what your outer financial reality is. Understanding the abundance mindset and its impact on your financial well-being is essential to achieving financial success.

2. Practicing gratitude and reframing your thoughts about money

Review your money blocks that are keeping you in a scarcity mindset. Challenge the thoughts and fears of lack by embracing an abundance mindset by being grateful and appreciating the wealth and abundance that already exist in your life and being open to opportunities that will shower you with prosperity. Try reframing a negative thought like “I’ll never have enough money to enjoy life” to a positive one like “I’m deciding to believe in the goodness that life has to offer”

Set Financial Goals and Create a Plan

1. The importance of setting financial goals 

By setting clear objectives, individuals are able to prioritize their spending and saving habits, ultimately leading to a more secure financial future. Additionally, creating a detailed plan helps individuals track their progress and make necessary adjustments along the way.

2. Set SMART goals and create an action plan

What do you want your financial life to look like? That can be an overwhelming thing to answer if your fear of spending money is running the financial script. But it doesn’t have to be, and setting SMART goals is sure to help. These goals are specific, measurable, achievable, relevant, and timed. Take a piece of paper and write down your financial goals, applying this framework to each goal. To make your goals a reality, you have to take action; thus, creating an action plan will help you stay on top of your goals, ensuring you stay focused and motivated throughout your financial journey. 

3. Tracking your progress 

Tracking your progress and making changes as required are crucial steps in achieving financial goals. By regularly monitoring your progress, you can identify any obstacles or areas that require improvement. This allows you to make necessary adjustments to your action plan, ensuring that you stay on track towards achieving your financial goals. Additionally, tracking your progress provides a sense of motivation and accomplishment as you see yourself getting closer to your desired financial outcomes.

Practice Self-Care and Reward Yourself

1. The role of self-care in overcoming the fear of spending money

Last but not least, taking care of yourself as you overcome the fear of spending money is a crucial part of the journey. Taking care of yourself during challenging times can often be overlooked, but it’s essential to take time out and tune in with yourself. Being in touch with your feelings, emotions, and thought patterns is key to understanding any fear, including the fear of spending money. Regularly journaling your feelings and checking in with yourself will help you seek clarity on your financial outlook. 

2. Finding healthy ways to reward yourself for achieving financial milestones

Celebrating financial milestones is essential. Often, we feel shame or guilt for failing to stick to our budget or falling short of reaching our goals. I’m here to cheer you on. It’s completely okay to give yourself a pat on the back for achieving any financial milestone, no matter how small or even if you are halfway through it. 

It is time to conquer this fear of spending money in order to achieve financial stability and reach our personal goals. You deserve to live a fulfilling, balanced financial life. By delving into the fear, challenging the limiting beliefs, and gradually taking small steps, you’ll gain the confidence to spend wisely and prioritize your well-being. Remember, it’s perfectly fine to spend on things that bring joy and enrich our lives. Let’s embrace financial freedom and empowerment, one step at a time.

Want to gain further financial insight? 
I have dedicated a free resource section that you can check out here

  1. Data taken from Fidelity Investments 2021 Women and Investing Study* ↩︎
  2. Figures taken from a study conducted in 2021 by the Global Financial Literacy Excellence Center** ↩︎

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Overcoming the Fear of Spending Money: Empowering Yourself to Financial Freedom

Explore the psychology behind the fear of spending money and expert tips to successfully regain control of your finances.

Overcoming the fear of spending money: Empowering yourself to financial freedom

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