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Why I love helping my clients spend their money

We’re all told to save, save, save. But, sometimes, it’s time to spend your money – as our financial planner Dan explains…

We’ve all heard stories about people who can’t control their spending. But we don’t hear nearly as much about people with the opposite problem: people who have more money than they’ll ever need but can’t bring themselves to spend it.

Saving is portrayed as the correct thing to do. Put away so much every year, the experts say, and eventually you’ll be financially secure. But, for some people, saving becomes an obsession. They continue to not spend, squirreling away cash long after they have achieved financial independence and can afford whatever indulgences they desire.

Spending money doesn’t need to be painful

The problem is more common than you might think. A lot of our clients have difficulty spending money even though they can easily afford to loosen their purse strings.

In some cases, spending money is not just hard; it’s almost painful. This obsession can create real problems with relationships. I see situations where one spouse wants to go on a dream holiday, but the other spouse can’t get their head around it – even though the two of them can easily afford it.

Fear of spending can hit people at different stages of life. However, in my experience, the main people affected are retirees who are terrified that they’ll run out of cash – perhaps from observing their parents in a similar situation.

After watching their assets grow over many decades of diligent saving and investing, people can be filled with anxiety at the thought of depleting their capital. It’s not like they can flip a switch and go from savings mode to spending mode!

Some people will even set a minimum target for their cash emergency fund that is way in excess of what they need, because otherwise they just wouldn’t be able to sleep at night.

As I mentioned earlier, attitudes about spending are often shaped by personal experiences. People who lived through tough times in the 50s and 60s, for example, may rightly see frugality and saving as a form of security and pass those lessons on to their own children and grandchildren.

But when healthy saving progresses into something more akin to hoarding, the reasons behind it aren’t always clear.

Using numbers to convince clients to spend

When saving isn’t fun but a symptom of irrational fears, telling the client to stop worrying and enjoy their money usually isn’t enough. They need to be convinced with numbers.

We start by building a comprehensive Lifetime Financial Plan – using conservative assumptions that show every pound of income people can expect for the rest of their lives from their savings, investments, company pensions and personal pensions.

Recently, a couple came to me in conflict about retirement spending. The husband had retired from the corporate world to set up his own small company so he could dictate the amount of time and freedom he had to enable them to live the next phase of their lives to the fullest.

The wife had longed to help their two sons get on the property ladder. She was very anxious about spending and giving away money, given that their household earnings were now unpredictable.

We proved to them both, through their Lifetime Financial Forecast and forward-looking planning, that they had the ability to gift money to their sons without putting their retirement plans in jeopardy.

These gifts enabled the wife to do something she’d wanted to for ages, which gave her a real sense of joy. The couple has since embraced our planning meetings. They have booked some amazing holidays, all with the confidence that it is backed up by a robust Lifetime Financial Forecast and regular planning meetings. They remain on track to have an extraordinary retirement.

If we can demonstrate to clients that they will still have plenty of capital even after 30 years of retirement – with holidays, bucket list experiences and other luxuries thrown in – they’re often able to loosen up.

The key thing for us is to demonstrate to our clients that they will never run out of money or die with too much! With regular reviews and coaching we can help rid them of their money anxieties and ensure they have an extraordinary retirement.


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