Ethan has always had a weird relationship with money, and he’s often the first to admit this. It became obvious to him that he was not a regular spender when he went off to university and began to budget every single penny he had.
“I remember eating nothing but ramen noodles for weeks on end, and not going out with friends, just so I could save money and pay off my loans much quicker,” he says.
Coupled with his job as a teacher’s assistant, the occasional odd bit of work, and thousands of pounds in private scholarships that he applied for, Ethan was able to graduate debt-free. But he still finds it difficult to be easy with money. “I make a comfortable living these days, but that part of my life never really left,” he adds. “I rarely go out to eat, but when I do, I find myself constantly looking for the cheapest thing on the menu. I guess one could say I'm a bit obsessed with saving money.”
The benefits of saving are numerous, especially if you're able to hack it in the current economy. However, savings culture also has a dark side to it – when it becomes addictive. We’ve all heard about compulsive spending, where people drive themselves into debt by splurging on luxury goods and vacations. But we don't hear as much about the people on the other end of the spectrum, who have more money than they need, but cannot bring themselves to spend it.
Some signs you might be a compulsive saver are putting away money endlessly, with no actual end goal in mind; being unable to stop checking your bank account to see how much money you have, and having an irrational fear of spending money, even when you can afford to spend it. Since saving can usually be difficult, how do people get to the point that it's taken over their life?
One of the main factors is a person’s upbringing. Derek Hagen, a certified financial behaviour specialist, says most people who grew up having little money develop a deep fear that there will never be enough, so they putting away money to control their fear. Others, he says, may be nervous that something bad might happen. They convince themselves that they are saving so much so they can be prepared for that situation. “We all have subconscious ‘money scripts’ that drive our behaviours, and most of these scripts are written when we are really young,” says Hagen.
Snezhina, a writer, came from a family where money had always been an issue. She attributes her obsession with saving to the frugality her mother practiced and taught her while she was growing up.
“My mother used to always talk about how I was only supposed to spend money on sensible and practical things,” she says. “We would never buy items just out of pure desire; the only things that we bought in our house had a clearly distinguished use.”
This mindset stuck all the way into adulthood. Snezhina currently has a stable job which allows her to freely spend as much money as she wishes, but the thing is that she doesn't want to do that, or at least, she’s waiting for the right occasion to splurge.
“I still prefer to keep my salary away from the ATM. It’s not that I have something in mind for it, nor am I saving for a special occasion – it just feels better to watch the numbers in my bank account increase, instead of buying material things with it,” she says.
According to Dan Pallesen, a clinical psychologist and financial advisor, compulsive saving can be as much of an unhealthy financial behaviour as overspending. “Holding onto assets and resources is very adaptive,” says Pallesen. “To some people, it is a way to ensure their survival in a quite unforeseeable future. Many disciplined investors, for instance, spend their entire careers making sacrifices so that they can build a retirement nest egg that will last for a lifetime. The thought of spending it can go against their entire being,” he adds. This can undoubtedly cause a lot of anxiety.
Compulsive saving is said to be one of the symptoms of Obsessive Compulsive Personality Disorder (OCPD), and it is generally seen as a severe form of hoarding. Stewart, who works with a personal finance company, realised his inability to enjoy spending money is further heightened by his anxiety disorder, and both of these factors combined affect all areas of his life. “Instead of spending the money I earn, I find myself fixating on the hours of my life it took to earn it, and what it could mean for my financial freedom if I didn't save and invest it,” he says.
However some people who have this habit see it as a kind of financial discipline. To them, it helps control their spending and encourages them to live within their means. Sometimes, it helps them build wealth. For Snezhina, the obsession with saving money is no issue – she feels very content with her life. “I don't feel like I'm missing out on anything by not spending money,” she says.
But though compulsive saving poses no problem for some, when a person denies themselves basic necessities on account of saving money, or spends a lot of time worrying about managing their finances, it can be quite disruptive – to that person, and to other people who are close to them.
So, if you find yourself saving more than you'd like, how can you curb the habit?
“Just being aware of the problem can help," suggests Hagen. According to him, fear around spending can be eliminated by starting out with small steps, like giving yourself rewards when you reach a savings target. Compulsive savers do not like to spend – even on themselves – so learning to purchase something you wouldn't ordinarily buy, every once in a while, is a great way to get rid of the habit.
For Ethan, saving money is the one thing that keeps his mind at ease in a world full of uncertainty. But he would like to spend a lot of money on something nice for himself or someone else, without feeling a little guilty. “I hope I can eventually ease up, and learn to enjoy the money I've worked hard for,” he says. Perhaps that could mean feasting on a prime cut of steak, next time he dines out.