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Can You Be Too Frugal?

March 31, 2011 Leave a comment

Is it possible to be too frugal?  I think so. With most things, moderation is key.  An MSN article discusses several ways that bring too frugal can do more harm than good.  Cutting out certain items so you can save money may not be the best idea.  The article focuses on nine ways the being frugal can cost you including avoiding regular medical check ups and being underinsured.

But keep in mind that being overly frugal may not just have a negative impact on your finances, it may also have a negative impact on your mental well-being.  There are people who save and save and avoid spending money on enjoyable experiences because they believe that their financial goal is to amass as much money as possible.  But they end up missing out on a lot of fun things in life.  If you’re overly frugal you may want to ask yourself, “Why am I hoarding my money?”  I’ve been guilty of holding on to my money to the point where I’ve missed out on some great opportunities.  I’ve skipped concerts and other enjoyable events because I didn’t want to pay and I didn’t like the idea of parting with my money for something that was not a necessity.  But when I look back, I know that my money would have been better spent on an experience that would lead to great memories.  I wouldn’t have missed that money in the long run but I certainly regret missing the experience.  Now, I make it a point to think about my entire financial picture and understand why I may be hesitant to spend that money.

The point is that spending money isn’t a good or bad thing and saving money isn’t a good or bad thing.  You need to plan and save for your future but you also have to live your life.  You have to understand why you’re spending money and why you’re saving money to make sure that it makes sense for you.