You may be laughing at this title. You may thinking becoming too frugal is the least of your worries. You’re too busy partying and spending to even become a little frugal. But chances are, you’d like to become a little more frugal. And once you do so, an avalanche can occur.
Yes, most people fall into two categories: not frugal at all and way too frugal. Finding the balance is the tricky part.
When I graduated college, I wanted to really focus on being frugal. I began saving money here and there. Pretty soon, I was insanely frugal. I was doing everything ‘right’. I was saving water, saving electricity, saving food costs. But, like most people, what had happened was I became overly frugal.
Becoming overly frugal happens because saving money gives us a rush of adrenaline. It’s like shopping a sale at a department store. You may be a multimillionaire. But buying something on sale still makes you feel like you’ve won. Winning is addictive.
I see this all the time. People start being frugal and before they know it, they’re messing up other areas of their life just to save a buck. They stop seeing friends because that costs money. They stop eating healthy because Ramen Noodles and Macaroni and cheese are so cheap. They avoid opportunities to make money because they require startup capital. It’s bizarre.
The following are areas you don’t want to let go for the sake of being frugal. The following areas are more important than saving small amounts of money.
Friends are more valuable than money. A friend is there for you when you get sick. A friend is there for you when you breakup with your girlfriend/boyfriend. A friend can also do business with you or introduce you to influential people.
Humans are a very necessary part of enjoying life and thriving. Even online entrepreneurs need a group of friends for business reasons and personal reasons. That is, unless you want to go live in the wilderness of Alaska. Some people do that and seem perfectly happy. Me personally, that would be insane.
Being too frugal can harm your overall well-being. You may dislike doing something like cooking at home. But you do it because it saves you money. Let me ask you this. On your deathbed, are you going to be glad you spent your life doing something you don’t like? If you don’t like it, don’t do it – even if doing it saves you money. But of course you need to be financially sound. If you’re not financially sound, you’ll hate life. So make sure to increase your income in order to pay for your prepared meals. There’s always a workaround to everything.
This ties in with the well-being aspect. Before doing anything frugal, ask yourself if it will help increase your happiness? For instance, I shopped around for probably three hours before I settled on a car insurance provider. Worth it? Yes, I found the cheapest auto insurance I could find – about $18 per month. Does that make me happy. Yes, very, very happy.
One frugal thing that really does not make me happy is clipping coupons. It’s just not for me. I’d rather spend my time doing something that brings greater value to my life. So what do I do? I never clip coupons. I’m happy with this decision.
Something that many frugal people do is they miss opportunity for the sake of frugality. This is penny wise pound foolish. For instance, I saw someone on the news who walked 5 miles to work and back each day. Yes, he saved money on driving. But such a TINY amount. He would have been better off driving a Lexus to work each day if he made a decent income. Why? Because he spent so much time just walking – not earning money. Yes, walking is exercise and that’s worth something but walking is a very slow way to get exercise. It’s horribly time inefficient.
You mustn’t be frugal when there is opportunity. With that said it’s time to move on to my last point – net worth. Focus on it.
At the end of the day, it’s your net worth that matters. That’s the number you need to focus on. It doesn’t matter how much you make. It doesn’t matter how much you save. What matters is your net worth. By focusing on that number, you’ll be able to balance out income and savings. You’ll see what truly matters.
Are you too frugal?
Do you do anything for the sake of frugality, whilst risking your overall net worth and happiness? If so, you’ve become too frugal. If you have yet to take the frugal plunge, make sure to keep everything in perspective as you begin saving money. Make sure you’re enjoying yourself. If you aren’t enjoying yourself, don’t stick with it. Remember, what you want most in life is to be happy. Yes, having money will make you happier. But do not make it the be-all, end-all, if so, you may become bitter. Don’t be bitter. Be chipper.
Now enjoy dialing in just the right amount of frugality.
Will Lipovsky is a personal finance freelance writer and internet marketer. His most embarrassing moment has been saying to a Microsoft executive, “I’ll just Google it.” You can get in touch with Will at FirstQuarterFinance.com.