The Well-Off People Who Can’t Spend Money

David Fox has plenty of savings. He earns hundreds of thousands of dollars each year. Recently, he allocated $60,000 to buying a new car—but when he arrived at the dealership, he could bring himself to spend only $30,000 on a used model.

Despite making a conservative choice, he had panic attacks for a week afterward. “I have this feeling that the bottom is gonna fall out,” Fox told me. “What if there’s not enough? What if, what if, what if … So instead of going out and enjoying my success, I kind of just batten down the hatches and prepare for the worst.”

Fox falls into a category of people that the University of Michigan marketing professor Scott Rick has spent years studying: “tightwads,” or people who have trouble spending their money. In various studies that he’s conducted, Rick has found that tightwads do not scrimp because they lack money. They are not any poorer than spendthrifts (people who overspend); tightwads actually have better credit scores and more money in savings. (Perhaps because they never spend it.) Instead, they’re afraid to spend money that they do have. Tightwads’ issues reveal how our financial choices can be more psychological than economic. If you feel anxiety about your finances, it might not be relieved by making more money.

Irrational stinginess is a strange problem to have, akin to complaining about being too beautiful. Some tightwads are hesitant to talk about their issues, because when they do, people react by saying, “Poor little rich boy,” as Fox put it. In a society with so much income inequality, it’s obviously better to be well-off and anxious than to be poor and desperate. But the tightwads I spoke with have very real agita—panic, guilt, stress—over their financial situation, even though there’s no real reason for them to worry. They drag around a phantom limb of poverty, burdened with the sneaking sense that something isn’t right, no matter what their bank account says.

[Read: Stop asking whether money buys happiness]

“Our spending, in some cases, is tied with our identities,” Abigail Sussman, a marketing professor at the University of Chicago, told me. “And so, if I think of myself as somebody who doesn’t splurge on things, spending on something like a new couch that maybe would make my life more comfortable … could interfere with my perception of my own identity.”

Tightwads seem especially attuned to the opportunity costs of spent money—they’re always thinking about how many months of rent they could afford with the money they blew on a tropical vacation. Darius Foroux, a financial blogger, recently struggled for a year to buy a bicycle. When he was redecorating his condo, he told me, “I was noticing myself bargaining with myself, like, Oh, well, maybe this couch could last for another year or so.”

Foroux said that he often compares potential purchases with other things he could spend his money on. “Oh, I could buy a new iPhone, or I could put that money in an S&P 500 index fund,” he told me. He did finally buy a bike, but a cheaper one than he’d originally planned.

Many tightwads experienced financial precarity earlier in life, Rick discovered, and though they may no longer be poor, the stress of deprivation is never far from view. “Anxiety about spending became a protective response to make sure you don’t go overboard,” Rick told me.

Damon Young, the author of the memoir What Doesn’t Kill You Makes You Blacker, calls this feeling “post-brokeness stress disorder.” In a 2018 essay, he described the terror he felt when he heard a truck backing up on his street: For a moment, he was seized with the fear that it was a tow truck coming to repossess his car—even though he had already paid it off in full.

Before he became a successful writer, Young was making $34,000 a year working at a college-prep program. It was the most money he’d ever made—until he got laid off a year later. Now, he told me, he still has “intrusive thoughts about worst-case scenarios … You know, foreclosure, having to sell my car, having to sell our house.”

These kinds of fears can afflict even people who are very far from poverty. Aja Evans, a financial therapist in New York, has worked with clients who would drag home even small bits of leftovers from restaurants in order to avoid wasting food. “There are people who have … ‘money-hoarding’ tendencies,” she told me, “where they have tens of thousands of dollars sitting in a savings account”; they fear that “something’s going to happen, and it’s all going to be taken away from them.”

Or they worry that once they start spending, they won’t be able to stop—that “one drop of the bucket turns into the faucet running constantly,” Evans said. And making lots of money doesn’t mean that a person knows how to manage it, she added: “There are some people who work in finance but are not necessarily well versed in personal finance.”

[Derek Thompson: All the personal-finance books are wrong]

Some of these not-actually poor people I interviewed are either the children of immigrants or immigrants themselves, and they can still feel the aftershocks of their austere upbringing. Some internalized the idea that, even if they can afford it, spending money on luxuries is somehow morally wrong. When he was recently considering going to a nice restaurant with his wife, the novelist David Yoon told me, he thought to himself, “We’re bad people if we go there. What we should do is just cook ramen noodles at home, and then that’s good; that’s noble.” When he takes a vacation, Yoon sometimes finds himself putting pressure on the trip to be “worth it.” Or he feels bad after the fact: “You’re like, Oh, we shouldn’t have done that,” he said.

Yoon’s Korean immigrant parents rarely spent money on nonessentials, and, he said, his wife’s parents, immigrants from Jamaica, collect so many free Taco Bell sauce packets that some of them have an outdated logo. “I do think we learned their fear and sort of ingrained it in us,” he told me.

Yoon said he tries to remind himself that, because he’s self-employed, he should imagine himself as his own boss—in which case he should treat himself like a “cool boss” would, and occasionally splurge on career milestones and other life events. When financial woes are mostly in your head, so is the trick to overcoming them.