But do "you" really understand?

My parents have always been on a tight budget -- they got most of their cutlery, plates etc with loyalty schemes for the biscuits I'd eat every morning. They bought a second-hand campervan so that they could go on holiday without paying for hotels, and could afford a house only thanks to old-school "socialist" policies here in Europe. They always fixed what they broke and always talked about the importance of using money wisely, for real things etc etc. They were also politically active, so I know how the sausage gets made, so to speak.

The result? I've always been rubbish at managing big sums of money. When my salary went over a certain threshold, I just stopped caring. I get anxious at the first sight of debt, yeah; but in many ways, that's also a handicap because it stops me from effectively leveraging debt as an instrument of growth. I can't get myself to talk about money with clients, and I'm thankful someone else does it for me. I used to spend days looking to save a few quid on this or that £20 gadget, and now I buy my cars from an expensive official dealer that is clearly overcharging me. When numbers go over a certain threshold, it just becomes "funny money" and my brain switches off. Right now I'm probably living beyond my means and balancing my budget by pure luck, I just have no idea.

Growing up poor can give you a certain inner fire and a sense of the importance of money in society; but it doesn't necessarily give you a full picture, in the same way knowing how to develop a simple webapp with Django or Ruby doesn't mean you know how to implement a scalable and highly-available system with queues, nosql, AWS orchestration and so on. You know the value of a penny, but not necessarily the value of a grand.

Perhaps thinking of your spending as a percentage of your net income, rather than an absolute amount, would help? Have a read over:

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

I found it provided a very useful perspective.

Very useful, thanks. Basically: "your age to retirement depends entirely on your savings rate, as a percentage of your take-home pay".

So, in short, try to live on less, put the rest in the bank and don't spend it. Live on what you need, avoid needless luxuries. And avoid credit card debt like the plague, right?

This is just an idea, but it sounds like you have a hindering emotional reaction to large sums of money. I wonder if you could "disable" that reaction by using a new representation that your unconscious mind wont recognize. Like if you think about money with scientific notation for instance.

>I earn 1.5E5 units per year. After 20% taxes that's 1.2E5 units.

>My mortgage is at 4E4 units.

etc

I remember learning that you can't rely on listed price for grocery items, but must check the per kilogram or per liter price. Because bigger containers are usually cheaper. But not always.

I still buy tuna that's 0.1 euro per kilogram cheaper ... I really don't know whether the savings are ever going to add up to anything and I'm almost certain it's not worth the 30 seconds it takes to check. But I can't not do it.

You also have to factor risk of spoilage. 2 units of milk is cheaper than 1 unit. But what is the risk of .5 units being thrown out since you normally don't use 2 units within the time it takes to spoil. You could increase consumption to not throw it out, but then you need to balance that out or all you did is increase the amount you spend on groceries and the calories you consume while attempting to actually reduce the money spent on groceries.

Stores are good at using sales to trick us into comparing prices as if we were going to buy on sale items anyways (in which case money is definitely being saved) instead of comparing it to what our actual behavior would have been had the items not been on sale.

Sort of. I grew up in a working poor household and while I learned the value of money, simple things like budgeting and how much debt is too much debt I had to teach myself.