You want to get it right. Your budget has to balance to the last euro, your savings goal has to be met, and a month in which you spent too much after all feels like failure. Perhaps you then throw the whole budget overboard, or don’t look at your account for weeks. Sound familiar? Then it is worth checking whether your drive has gradually turned into perfectionism.
The difference seems small, but it has big consequences for your stress and your peace of mind. In this article you will read what research says about perfectionism, how it shows up in the way you handle money, and how you can keep high standards without tearing yourself down.
Two sides of perfectionism
Psychologists no longer see perfectionism as a single trait. Researchers such as Paul Hewitt and Gordon Flett (1991) and Randy Frost and colleagues (1990) showed that it consists of several dimensions. Joachim Stoeber and Kathleen Otto (2006) summarised the research into two broad sides:
- Perfectionistic strivings: setting high standards and working hard to meet them.
- Perfectionistic concerns: fear of making mistakes, harsh self-criticism and the feeling that you never do enough, or that others will reject you otherwise.
It is mainly that second side that research associates with stress, exhaustion and low mood. High standards in themselves are not the problem. It becomes difficult when your self-worth depends on meeting them and every deviation feels like a personal failure. Thomas Curran and Andrew Hill (2019) also found that perfectionism among young adults in the US, Canada and the UK increased between 1989 and 2016, especially the feeling that those around them expect perfection.
How perfectionism creeps into your wallet
With money, perfectionism shows itself in surprising ways:
- All-or-nothing budgets: you make a rigid plan with no room for the unexpected. At the first overspend, it feels as if the plan is “broken”.
- Avoidance: you don’t look at your account because you are afraid of what you will see. The longer you wait, the higher the threshold.
- Endless comparing: you spend days searching for the best deal, the perfect savings account or the ideal insurance policy, and in the end decide nothing.
- Spending to keep up appearances: a perfect birthday party, a perfect present, a perfect home, even when the budget doesn’t really allow it.
All-or-nothing thinking has a well-known effect. In research on dieting, Janet Polivy and Peter Herman (from the 1970s) described how people who “break” a strict rule often go on to eat even more: it is ruined anyway. You see the same with a budget. One expensive evening becomes an expensive week, because the month has “failed” anyway.
There is something else too. People who are perfectionistic often link money with shame: a disappointing month then doesn’t say “I was unlucky” or “I planned badly”, but “I am not good enough”. That shame makes it hard to ask for help or to talk openly about money with a partner. That is precisely why small problems sometimes stay under the radar for a long time, until they have become big.
Research by Kristin Neff (from 2003) shows that self-compassion, treating yourself after a slip the way you would treat a good friend, does not lead to laziness. People with more self-compassion are more likely to take responsibility for mistakes and try again, because a mistake is less threatening to them.
Elke’s story
Elke (38) is an accountant. At work, precision is a strength. At home, it worked against her. She kept a spreadsheet with thirty categories and a savings rate she wanted to hit every month. If she didn’t manage it, she closed the spreadsheet and sometimes didn’t open it again for two months. “I was ashamed in front of myself. I’m an accountant, I should be able to do this.”
With her coach, she cut the budget back to six categories and added an “unforeseen” line. More importantly, she replaced her goal of “saving twenty per cent every month” with “looking at my figures every month, whatever has happened”. “The first month I went over budget and still just wrote it down felt like a victory. I would never have thought so.”
Five ways to stay driven without perfectionism
- Choose a “good enough” standard. Decide in advance what a successful month is for you, for example: fixed costs paid, something put aside, no new debts. Anything beyond that is a bonus.
- Build in some slack. A budget with no line for the unexpected is a budget that is guaranteed to “fail”. Allow a small margin.
- Judge the process, not just the result. Did you look, write it down and adjust? Then you have done your job, even if the figures were disappointing. A fixed moment with the monthly check-in makes that easier.
- Talk to yourself as you would to a friend. After a disappointing month, write down what you would say to a friend in the same situation. Then read it back to yourself.
- Put a time limit on comparing. For a decision such as a new insurance policy or savings account, give yourself, say, one evening to research it, and then choose the best option you found.
From perfect to calm
Financial well-being is not about a perfect budget. It is about the feeling that you are in charge of your money, that you can absorb setbacks and that you can make choices that suit you. Perfectionism undermines exactly that feeling, because it turns every deviation into a threat. Those who become gentler with themselves look at their figures more often, adjust sooner and experience more peace of mind. That is financial self-care: not harder, but smarter and kinder to yourself.
If you strongly recognise yourself in this story and notice that self-criticism weighs heavily on you, talk to your GP or a psychologist about it. Would you like to build a budget with someone that you can actually stick to? Discover how coaching can guide you in this.