My grandfather is the most frugal person I know. For as long as I can remember, he’s worn the same few cardigans, one of which has a hole in it. Years ago, my mother bought him a new cardigan, but my grandfather refused to even take the tags off. A piece of clothing must literally be falling apart before he will even consider throwing it away. He has some savings, but he’s still consumed by pinching pennies.
I get it. The man lived through a wartime era. Growing up, he didn’t know that he’d have food on the table or a roof over his head. A scarcity mindset was critical to his survival. But here’s the thing: He now lives in a different world — one that’s full of opportunities that were unfathomable to his childhood self. And yet he limits his life much more than he needs to.
Whatever your income level is, being overly obsessed with living frugally will not make you rich. Instead, it will only drain your energy and bring you stress. I’m not saying it’s foolish to budget — but there’s a point where living below your means passes prudent and becomes excessive.
When you budget obsessively, you’re acting out of fear, and it is that fear that keeps you from investing in yourself and creating actual value. I often think about my friend who always complains about how expensive everything is. He once drove two hours to buy a used car that was a few hundred bucks cheaper than another used car that was available in his neighborhood. He took a bus to the dealership, spent the day looking at the car, then bussed back home. Once he decided to buy it, he spent another day doing the same thing to pick it up. Two months later, the car broke down, but he had declined to buy the warranty. The repairs set him back close to $2,000, in addition to all the time he wasted (not to mention the bus tickets). Being cheap is often incredibly expensive.
Look, I don’t go out to dinner every week. I don’t go to the most expensive hotels. I don’t travel a lot. I don’t spend frivolously.
But I do have a clear rule when it comes to money: I’m okay spending up to a hundred dollars extra for something whose value is that much greater. If the grocery store on my…