Frugal Living: How Frugal is Too Frugal?

Frugality has been a topic of conversation with many finance bloggers in the recent the months, and there seems to be a consensus that it is possible to be too frugal. This may seem surprising at first glance. I mean, how can it hurt to save as much money as possible? Let's take a look at the principles behind frugality and how being too frugal can be detrimental to your finances.

How Do You Define Frugality?

First, let's jump into what the frugal life entails. It's actually not easy to define frugality because different people define it in different ways. For one person, being frugal may mean frequenting yard sales and thrift stores. For another, frugalness in their lives can be defined by how they much limit their restaurant dining. A person with larger means may define being frugal as living in a simple residence when they could afford more.

The defining factor of frugality in all of these cases is that each person lives below their means. They save money in areas where they could have spent and apply it to retirement savings, investments and purchases that contain more meaning to their lives.

How Much Saving is Too Much Saving?

If saving is the end goal in the frugal lifestyle, someone could make a case that saving every penny available is better than spending a single dime. However, saving too much can lead to burnout. If you are unable to spend occasionally on items that truly matter to you, like the occasional date night or the well-deserved vacation, you might feel trapped in a lifestyle that doesn't fit your needs.

In these cases, many people go on spending binges. They save too long and feel so deprived that they may spend hundreds or thousands of dollars in a short period of time. In fact, sometimes these spending sprees can end up costing more money than was initially saved, sending the would-be-saver into debt.

The Balanced Frugal Life

To combat the frugal-overspend problem that may occur in a budget that is too strict, it may be necessary to better balance the spending. Making room in the budget to both save and spend in areas you most desire can help you feel satisfied while allowing you to save. In essence, balancing the human need for the occasional treat with our need to save can help us all live a more balanced frugal life.

How about you: do you have any tricks on balancing the need to spend with the need to save?

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