Can you be too cautious about spending money?

Dear Liz: I think I have a phobia about spending money. I’m a young professional who has devoted a lot of time to building up my savings account. I also contribute sizable amounts to my 401(k) and IRA each month. I pay off my credit cards each month, and I am making larger-than-necessary payments on my small student loans. Still, I feel as if every time I spend money on something — clothing, travel, furniture, etc. — I am undoing my hard work. It makes me scrutinize every decision until I either give up or make an impulse purchase. Is this normal? How do I know when it is OK to actually spend the money I have worked to save?

Answer: Being cautious about spending money is fine. If making purchases causes you great anxiety, though, or you’re unnecessarily compromising your quality of life, then you may want to seek help.

People with irrational fears of spending money may put off necessary doctor visits, buy unhealthy food because it’s cheap (at least in the short run), refuse to make charitable contributions or forgo pleasurable experiences. Instead of using money as a tool to live a good life, they make saving an end in itself.

Since you’re by nature a saver and a planner, you should use those strengths to free yourself from unnecessary concerns about spending money. If you enjoy travel, for example, plan a few trips and set aside money in advance to pay for them. Do the same thing with clothing or furniture upgrades. Planning and knowing how much you have to spend can help you dispel some of your anxiety and minimize the chances of regret.

Talking to a therapist or a financial planner could give you some additional strategies for dealing with your worries.

Is moving in with Mom unfair?

Dear Liz: I just read your reply to the woman who was struggling to make ends meet with her part-time job. She was wondering whether she should sell her house and move in with her mother. I couldn’t get to my computer fast enough to ask you how on Earth you can recommend with a clear conscience that someone move back in with a parent because she can’t pay her bills.

Why should she be able to mooch off Mom and expect her to take her Social Security check to pick up the slack? I was in basically the same situation when I was 39, except that I had three kids and my ex passed away within a week of our divorce, so I got no child support. I still managed to find a full-time job, maybe not the job of my dreams, but it paid well and allowed me to keep the house and continue to raise the kids. I built up a good retirement, which I felt I had earned and was enjoying very much, until my adult son went through a bad divorce and “temporarily” moved himself back into my home.

I’ve tried to help him get back on his feet and moving again, but so far all that has happened is my credit cards are getting out of control, my home equity line of credit is maxed out, my property has been damaged, and my life is now miserable, as I share my once-lovely home with an ungrateful jerk, his girlfriend and three cats. I can’t figure out how to get him out, and I can see no end in sight. I’m not saying this woman would do the same, but it’s still not fair to expect her mom’s life to be disrupted, no matter how nice the lady is.

Answer: The other reader was considering going back to school to get training that would qualify her for a full-time job. Selling her home and moving in with her mother would allow her to keep her current part-time job while she went to school. There was no suggestion that Mom would pick up her bills — only that she would share her home for a finite period.

So the other reader’s situation probably isn’t like yours. But perhaps it’s easier to get mad at a stranger than to acknowledge that you helped create this mess and you’re the only one who can fix it.

Schedule a meeting with an attorney familiar with landlord-tenant laws in your state so you’ll understand the best way to evict your freeloader. Then do.

Perhaps your parents did a better job of setting boundaries with you than you did with your son, but it’s not too late to reclaim your retirement, your house and your life.

Tuesday’s need-to-know money news

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Things you should know before you walk down the aisle.

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Things you should know for when the walk down the aisle fails.

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Student loan battles don’t have to be fought alone.
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How to get by when time isn’t on your side.

Estate taxes no longer a worry for most people

Dear Liz: My father passed away two years ago and my mother recently died as well. I will be getting about $50,000 from the sale of their house. Everyone tells me the tax on this will be very high, so I need advice about how not to give my parents’ money to the government. Their grandchildren should be able to see a legacy of their grandparents.

Answer: You need to stop listening to “everyone,” since these people clearly don’t know what they’re talking about.

You have to be pretty rich to worry about estate taxes these days. The money you inherit wouldn’t be subject to federal estate taxes unless your parents’ estates exceeded the federal exemption limit (which is currently more than $5 million per person). Some states have lower limits and a few have “inheritance taxes,” which base the tax rate on who is inheriting (spouses are typically exempt, and lineal descendants such as children pay a lower rate than others).

The vast majority of inheritors, however, won’t face any of these taxes. You should check with a tax pro, but chances are good your inheritance won’t incur a tax bill and you’ll be able to pass the entire amount along to your children without taxes as well if you wish.

Friday’s need-to-know money news

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The Best Car Rental Agency in America
Before you hit the road this summer, find out who has the best rental policies.

Insider Shopping Tips From a Grocery Store Cashier
How to get more for your dollar at the supermarket.

Don’t Let These Six Surprises Ruin Your Retirement
Rule No. 1: Expect the Unexpected

Homeowner Tax Breaks Not as Great as You Think
Tax breaks always sound good, but they don’t always pay off.

How Boomers Can Keep Their Identities Safe
Simple tips to protect your identity.

Monday’s need-to-know money news

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How to keep your money safe from internet thieves.

How to Dispute a Credit Card Charge
The easiest ways to get your money back.

How Young People Can Begin to Build Credit
Sharing your credit could just be the best way to start.

7 Retirement Decisions that Affect the Rest of Your Life
When you start saving could make the difference forty years down the line.

Friday’s need-to-know money news

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The 50 Best Employers for Boomer Workers
The fifty best employers for those over fifty.

5 Methods for Setting Retirement Targets
Strategic planning to reach your retirement goals.

5 Tips for Parents On How to Be Good Financial Role Models
Being a good financial role model could save you from supporting your kids in their 20’s and beyond.

How to Negotiate Financial Aid With Your College
Everything is negotiable; even financial aid.

3 Moves to Make Your Retirement Almost Tax Free
How to pursue as much tax free retirement income as possible.

Thursday’s need-to-know money news

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The 10 Commandments of Summer Travel
Thou shall follow these tips to keep your finances and identity safe this summer.

Sizzlin’ Summer Financial Reads
Feed your mind while working on your tan.

Which to Tackle First: High-Interest Debt or Small-Balance Debt?
The best methods for prioritizing your debt.

How I Found a Job After Graduation
Seven recent grads share their employment world successes.

Is Your Neighbor Hurting Your Home’s Value?
Bad neighbors can lead to bad home values.

Wednesday’s need-to-know money news

Passenger airplane landing on runway in airport.The myth of open houses, the credit report you never knew about and how to avoid being squeezed by airlines.

The Credit Report You Haven’t Seen Yet

How “alternative credit data” could help you get approved at lower rates.

Cyber-thieves: More Tips on How to Protect Yourself From Credit Card Theft

Protecting you and your credit from cyber-theft.

Are Open Houses a Waste of Sellers’ Time?

Open Houses are not only a waste of time; they could be an open invitation to thieves.

The Worst Fee-Greedy Airlines

From bag fees to charging to make reservations by phone, airlines are determined to squeeze as much money out of passengers as possible.

When to Buy a Mutual Fund

There’s money to be made in mutual funds, if you have the patience.

Tuesday’s need-to-know money news

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How to Save More Money This Month
Six ideas to help you get through June without breaking the bank.

No, You Shouldn’t Take Out the Largest Mortgage Possible
Don’t be tempted by still-low mortgage rates.

How to Give Your Finances a Summer Makeover
Ten tips on strengthening your finances over the summer months.

Nail Your Home Renovation Budget
How to ensure your home does not become a money pit.

How to Avoid a Summer Vacation Disaster
Don’t let your summer vacation turn into a summer nightmare.