By: Roshawn Watson

If you have been financially responsible, then it’s time to rid yourself of the fear and guilt associated with reasonable spending on things that you value. Extreme frugality can be harmful. If your saving habits are an obsession despite attaining your financial goals, little good is coming from such deprivation and self-torture.

Fear and Guilt

Does the “fear of lack” control you?

I am convinced that we are too often motivated by fear. It is quite sad that people who have been responsible [i.e. are free of consumer debts, have fully-funded emergency funds, have invested for retirement and their kids’ education (if applicable), and have even given to charitable organizations] are still being controlled by fear. Unfortunately, fear can rule frugal people too.

In the Total Money Makeover, Dave Ramsey wrote about Michael, a caller who wanted to purchase a Harley-Davidson motorcycle. This can run you over $20,000 for a nice one. Dave prejudged Michael to be young and irresponsible for wanting to purchase the bike without adequately providing for his family. It turned out that Michael made over $550,000 a year and had a net worth of over $20 million. Dave enthusiastically told Michael to buy the bike. Clearly, this is an extreme example: Michael is a prodigious accumulator of wealth (a.k.a. Balance Sheet Affluent) with a net worth approaching the top 2% of millionaire households . However, despite his success, he still feels guilty spending an amount equivalent to the cost of a Happy Meal, given his financial position.

This example illustrates the need for eliminating the “fear of lack” and guilt from enjoyment. I really don’t know what amount of money would have made Michael feel comfortable making that purchase because his problem had nothing to do with his financial statements.

Balance

Breathe.

While I am certainly not promoting irresponsibility, I do want to make the case for moderation. If you have already been responsible and have an average income with reasonable expenses, there should not be so much conflict between building wealth and enjoying life. I don’t see anything personally wrong with having a very nice car (if that strikes your fancy) if you are hitting your other financial goals. Just because it is not prudent to have too much of your financial world tied into depreciating assets (i.e. such as cars) doesn’t preclude you from ever having such items. Financial detriment occurs when people refuse to delay gratification long enough to build a solid foundation. However, once one is built, then there should be allowances for some fun.

Thus, argue as you may that “the best things in life are free,” there are plenty of things that will bring fun and happiness to you that require M.O.N.E.Y. I don’t think I will ever advocate materialism, but I also refuse to live in denial. Moreover, there are plenty of non-selfish and enjoyable things that also require resources. For example, money provides medical care for the sick, feeds the hungry, educates our children, and provides for the poor. Of course, there are many enjoyable activities don’t even require money, but some meaningful experiences and purchases do. In Is Extreme Frugality for You? , I cite new research findings showing that out of the nine major categories of consumption, only spending on leisure correlates with happiness.I don’t think I will ever advocate materialism, but I also refuse to live in denial. Moreover, there are plenty of non-selfish and enjoyable things that also require resources. For example, money provides medical care for the sick, feeds the hungry, educates our children, and provides for the poor.

In societies that have glamorized conspicuous consumption to the point of a worldwide financial catastrophe, a call for balance may seem somewhat untimely. However, this admonishment is for those who are financially-solvent, fiscally-responsible, debt-free, and have built wealth but are so consumed with saving that their lives lack joy and peace. Until one has built this foundation, being off-balanced (very frugal) is a very good thing in most cases.

Security

Some people argue that they are compelled to save and invest for financial security. This is certainly a valid motivation for frugality. Nonetheless, there should not be much of a conflict between becoming financially secure and enjoying life (in most cases), provided that you have reasonable income and expenses. If this cannot be done, my concern is somewhere we may have lost our ways under the guise of frugality . We should be concerned if we will barely go out to eat or have fun with others because we’re too cheap. The warning bells should go off if we stock up on napkins and utensils that we stole from the condiment bar at McDonald’s. We are not right if we’re “regifting” crappy stuff that we don’t want ourselves.

Please don’t call yourself frugal if you are really cheap. It’s really not fair and hurts the cause.

If your goal is financial security, be sure to clearly define what this means to you. Consider “how much do you need?”, “how long will it take to obtain it?”, and “from which sources do you want this income?” We must also develop and execute plans to achieve it. Financially security doesn’t typically happen by chance, even for the frugal.

Self-care is okay

the best gift you can give someone is a better you. For some this is intuitive, but for others it is a revelation. There are so many kind and loving people who invest nothing in themselves, yet the atmosphere that they are in determines the decisions they make. For example, merchants create environments that influence our buying decisions. When you go into a clothing store for younger people, the music is often fast, upbeat and energizing. Contrast that to music at a high fashion retailer, which is often quiet, classical, or dignified. This isn’t by coincidence. It is not selfish to nurture yourself AND your love ones. I often say that. For some this is intuitive, but for others it is a revelation. There are so many kind and loving people who invest nothing in themselves, yet the atmosphere that they are in determines the decisions they make. For example, merchants create environments that influence our buying decisions. When you go into a clothing store for younger people, the music is often fast, upbeat and energizing. Contrast that to music at a high fashion retailer, which is often quiet, classical, or dignified. This isn’t by coincidence. Unfortunately, few people really care about your specific needs like you do, yet your productivity and prosperity depend on it. There are books that will revolutionize how you handle your finances, but no one will make sure that you read them. How many lives do you think have been changed by following the message in the Millionaire Next Door, yet there are some who will argue that $10 is too much to pay or that it takes too much time to read. Your future is worth considerable investment. Don’t think saving a few dollars at the expense of your comfort or enrichment is smart: it’s merely penny-wise but pound foolish.

Past building a foundation, a primary focus of investing and saving is obtaining financial peace, but if you derive little to no enjoyment from your money, are you missing the point entirely? In this journey to acquire wealth, don’t rob yourselves of a fulfilled life.

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