Being shamed for spending money won’t help you. Here’s what will

Today, I yet again saw some personal finance guru advocating the same tired advice: if you don’t have money, why are you wasting it on coffees, pubs and eating out? It’s a narrative that’s not only oversimplified but also fundamentally flawed. Here’s why.

On the surface, it seems logical. If you reduce unnecessary spending, you’ll have more money left over. Problem solved.

It’s pointless to simply have the attitude that “you should stop spending on that.”Credit: Simon Letch

It just seems patronising at best, and woefully ignorant at worst, to suggest that grown adults, many of whom are well-educated and professionally successful, don’t get this.

I say “ignorant” because this attitude demonstrates a lack of understanding of why people spend money the way they do.

I’ve helped hundreds of people over the years create real and lasting change in how they save money, without ever telling them to stop spending money on something.

How? The first step is understanding that our financial decisions are not rational, they’re emotional. The study performed by Nobel Prize-winning psychologist Daniel Kahneman found that over 85 per cent of our financial decisions are driven by emotion, as opposed to logic.

So it’s pointless to simply have the attitude that “you should stop spending on that”. The better (and more compassionate) approach is to understand – and more importantly, help them understand – why they’re engaging in those behaviours in the first place.

Here are some examples of what this might look like:

• A young professional struggled with overspending despite earning a good salary. She realised her behaviour stemmed from a childhood where money was tightly controlled. For her, spending symbolised freedom and autonomy. Once she connected this realisation to the stress and opportunity costs of her future goals, she chose healthier financial habits without feeling deprived.
• A woman felt resentment toward her husband’s desire to save, as it reminded her of restrictive behaviours of her parents in her childhood. When she reframed investing as a way to reduce her work years, she found a new motivation in the long-term benefits, making saving feel exciting rather than restrictive.
• A parent juggling a demanding career and family responsibilities relied on eating out as a coping mechanism for stress and exhaustion. By focusing on how healthier eating habits could improve their physical and mental well-being – rather than just their finances – they were more motivated to shift to healthier food choices that also resulted in financial savings.

In all these cases, spending habits were merely symptoms of more profound issues. Addressing the root causes – whether tied to emotional coping, childhood beliefs, or lack of clarity or connection to long-term financial goals – is what led to lasting change.

If you have a fraught relationship with spending money, here are some exercises you can do that might help you understand your spending behaviours better:

The path to lasting behavioural change begins with self-awareness, not sacrifice.

Become present to the emotions you experience when spending:
How do you feel when you’re about to spend money? Start to just observe the thoughts and feelings you’re having before you engage in a habitual spending pattern. This will provide you with information about why you’re spending. For example, are you seeking stimulation, stress relief, comfort, or excitement?

Get curious about where this spending pattern came from:
When did it start? What influenced you in engaging in this pattern? Did your parents have the same coping mechanisms? Or maybe they were overly restrictive in this area – spending on food, clothes, entertainment was frowned upon – so you’re overcompensating now? Or perhaps that’s a norm in your social or professional circle?

Get clear on the costs of this pattern in your life:
Take stock of how much these habits are costing you over a year, not just financially but also emotionally, physically, and socially. For example, regular takeout might leave you feeling sluggish, while frequent pub outings might disrupt your weekends and family time. When you get the full picture of how this is impacting your life, you can then make an intentional decision around whether the benefits outweigh the costs.

When you focus on cutting spending “because you should”, it becomes a hard change to sustain long-term. You’re not totally bought in. Part of you still wants to be able to spend on that thing, but you’re forcing yourself not to.

However, when you address the root causes – the underlying emotions driving your behaviours – you can create real and lasting change. You’re no longer trying to trick, manipulate or force yourself into behaviour change. You are creating internal alignment with the external behaviours and results you want.

This is the real way to have your cake and eat it too. When you change from the inside out, the behaviour change is no longer something you have to do, or feel forced to do. It becomes something you want to do. It becomes a choice, not an obligation.

The path to lasting behavioural change begins with self-awareness, not sacrifice.

Paridhi Jain is founder of SkilledSmart, which helps adults learn to manage, save and invest money through financial education courses and classes.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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