Frugal Living: How Frugal is Too Frugal?

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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MoneyCone's picture

MoneyCone wrote:

Wed, 12/28/2011 - 22:21 Comment #: 1

Good point Christa! When I'm about to purchase an item that I know will be cheaper with a coupon, I still go ahead and buy it even if I don't have a coupon handy.

Extreme couponing is not for me!

Christa Palm's picture

Christa Palm wrote:

Thu, 12/29/2011 - 15:32 Comment #: 2

MoneyCone, I agree: spending money on items you need without worrying about a coupon is one way to save time and sanity. Frugality in other areas can offset the coupon mindset.

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Happy New Year! Goals Update and Weekly Round-up #1Life And wrote:

Sat, 12/31/2011 - 15:07 Comment #: 3

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Happy New Year! My Goals for 2012 and Weekly Round-Up - Cre wrote:

Sun, 01/01/2012 - 10:00 Comment #: 4

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Poor to Rich a Day at a Time's picture

Poor to Rich a Day at a Time wrote:

Sun, 01/01/2012 - 13:47 Comment #: 5

Nice reminder of how far one takes frugality. I have found that even when situations call for frugality out of neccessity, that if the frugality causes great discomfort it is a sign it has gone too far. The things you do to be frugal must come from a comfortable place and not turn your stomach or make you squeemish.......the fun just comes right out of being frugal then!

Also frugality is not suppose to go to extremes of deprivation in my opinion, however deprivation may simply be a frame of mind and thoughts that need to be changed, it boils down to how you look at something, half empty or half full?

Nice article here!

Christa Palm's picture

Christa Palm wrote:

Mon, 01/02/2012 - 20:38 Comment #: 6

Poor to Rich, very true! When being frugal is no longer fun, it is much more difficult to stick to it!