Stop Frugality From Leading To Lifestyle Deflation

Stop frugality from leading to lifestyle deflation

Lifestyle deflation is what happens when you are overly frugal. Frugality is often praised as a key element to achieving financial independence. Frugality is one of the hallmarks of the FIRE movement I help found in 2009. However, it's easy to take frugality too far.

I'm frugal to a fault. For 13 years after college, I saved 50% – 70% of my income partially due to humble living conditions.

From ages 28-37 I drove a $8,000 car that depreciated to $3,000 even after my income grew by 3X. And even after I had finally escaped the corporate world in 2012, I still couldn't stop saving at least 50% of my income. This was despite my income taking a big hit!

By the third year of early retirement, however, I started seriously questioning the point of working and saving so much if the money was never going to be spent. Saving for retirement in retirement is illogical.

I started getting angry at being unable to kick my frugality addiction to the curb. People with much less were spending so much more and having a great time doing so. Why couldn't I be more carefree?

How Frugality Leads To Lifestyle Deflation

Despite my best efforts to spend more like everyone who posts about their fabulous lives on Facebook, touching retirement principal still felt like a crime.

Instead of relaxing as a good retiree should do, here's what I did instead to maintain a 50%+ savings ratio. This aggressive savings ratio post retirement has lead to lifestyle deflation.

  • Worked on ways to generate $200,000 a year in passive income
  • Took on part-time consulting gigs with three fintech companies over three years
  • Continued publishing 3X a week on Financial Samurai
  • Developed new online business partnerships
  • Downsized to a smaller house to free up cash flow
  • Bought a Honda Fit instead of a Jeep Grand Cherokee Limited
  • Invested 90% of every dollar saved instead of spending it

Then one day, I burned out. I dropped all my consulting gigs. I wrote the biggest e-mail autoresponder known to man saying I was too busy. And I finally found some breathing room to spend a little more than normal.

Finally Started Spending More Money

Instead of limiting myself to $100 shoes, I ventured out and bought a $240 pair of shoes (on sale for 50% off of course). The guilty feeling only lasted for an hour while the pair of Tod's loafers is still my favorite shoe three years later.

Instead of taking an Uber Pool to save $6 to go downtown, I began ordering my own Uber. I still feel guilty for some reason, but the feeling has lessened because I remind myself that time is way more valuable than money.

Instead of staying at a 3-star hotel in Angkor Wat, Cambodia, we decided to stay at a 5-star hotel for $100 more a night. We knew we were never coming back, so we also hired a private van with much needed AC to be our driver for $50 a day. It was so worth it.

Lifestyle Deflation May Be An Inevitability

Then I realized something. Keeping spending constant after a certain age eventually leads to lifestyle deflation because everything is relative.

If everybody still watched cathode ray tube TVs, you'd be happy with your tube TV. But you're no longer as happy when everybody else is watching a paper thin 4K TV.

If you don't at least increase your spending at the rate of inflation, your quality of life will begin to deteriorate because you can't help but notice progress all around. This constant comparison with how other spend their money leads to angst and anxiety.

For those of you who can't seem to lift your spending despite an increase in your income and net worth, let me share with you five ways for overcoming frugality to avoid lifestyle deflation. Dying with way too much is poor consumption planning. 

Instead, we most all decide on a decumulation age to spend down our wealth and life our best lives.

Halting Lifestyle Deflation In Five Steps

1) Find your marginal spending ratio.

Being overly frugal means you either don't make enough money, fear your income won't last, or are stuck mentally in a time when you didn't make much money. There is no denying that having less money means you are forced to spend less.

If you suddenly started making an extra $10 million a year, you bet your bottom dollar that you'd be able to spend more freely. Therefore, the easiest way to crush frugality is to make exponentially more money. By doing so, you can't help but spend more.

The key to unlocking additional spending is determining how much extra money you need to make in order to spend an extra $1. Strike down your scarcity mindset.

Some consumers will spend an extra $1 when they only make 50 cents more. Others might require earning $10 to spend an extra $1. Earn enough to find your ratio for various things.

For example, I need to earn at least $500,000 more a year to feel comfortable spending $8,000 more on a first class ticket to Europe or Asia. Until then, I'll sit in the middle seat near the toilet for 12 hours because $8,000 / 12 = $667/hour!

Related: When Do You Finally Feel Rich

2) Make your income more defensible. 

Lifestyle deflation is avoidable with strong income streams. If your income and wealth are tied to the survival of a startup that has only 12 months left until it runs out of cash, there's no way you'll ever break free from frugality. Conversely, if you work in a massive corporation that never fires anybody, you should be able to open up the wallet a little wider.

Nowadays, the best way to create a more defensible income is to build multiple income streams. This includes both passive and active incomes. Get to a passive income level that covers all your expenses. If you do, you will crush your frugal habits.

Achieving a $200,000 passive income figure was a relief after 16 years of trying. It is more than my wife and I spend each year. When we added on corporate consulting income on top of online income, we finally stopped checking the price of food before ordering at a restaurant.

We also didn't care about the latest cost of an electronic gadget anymore because it was a business expense. We knew that worst case, even if our business went to hell, we'd have passive income made up of 10+ different sources that would carry us through on top of our principal. 

3) Estimate your mortality.

Acknowledge your mortality and calculate how much you'll have left at age 100. Just as most Americans don't properly calculate their retirement target and plan for how to get there, many of us don't calculate how much we'll end up dying with if we don't spend more.

We should be entering a decumulation of wealth phase between ages 40 – 60. This way, we don't die with too much money. I'm personally starting to decumulate at age 45, which also happens to be the ideal retirement age. At age 45, you really start becoming aware of your mortality.

Right now you will be taxed at 40%+ on any wealth you leave behind after $12.06 million per person (as of 2022). Divide your current net worth by the difference between 100 and your age. If the number is greater than your average annual spending, you should be able to spend more freely.

Every month, I run my finances through Empower's Retirement Planner on my iPhone, and every time it says I'm in “Great Shape.” Love it! I imagine it's kinda like being a beautiful person looking at him/herself in the mirror each morning. You know you're beautiful and can't get enough of yourself! Try Empower's Retirement Planner and other fantastic financial tools yourself to see how you're doing. Simply sign up for a free account using the button below.

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4) Find your forever home.

Once you've purchased a home you see yourself living in for 10+ years, you'll feel a tremendous amount of relief. Saving up for a home is the largest financial undertaking for most people, especially those who live in major cities. Therefore, once you've conquered the tallest mountain, everything else will feel like an ant hill. Food and clothing are cheap in comparison.

Buying a primary residence is like paying yourself first. You'll build equity through forced savings and hopefully principal appreciation over time. If you're renting, you'll always wonder when your rent will go up or when the landlord will want to kick you out for whatever reason.

As a result, you'll have a tendency to hoard your money to pay for moving expenses, and potentially a more expense apartment since rents tend to always go up.

After finding and remodeling an affordable home in San Francisco with panoramic ocean views, I finally felt I could spend whatever excess cash flow I had on nicer things. Each stage of the remodeling process had me shelling out an extra $30,000 – $60,000 over a 3-6 month period. Once all the remodeling was done, it felt like I had an extra $10,000 a month to spend on whatever I wanted. 

Related: Your Forever Home Is Really Not Forever

5) Set and achieve ambitious targets.

The reason why the 1/10th rule for car buying is so powerful is because it forces people to tether their wants to achievement. Many people get mad when they want to buy a $40,000 car, but realize their $80,000 income means they should only purchase a ~$8,000 car.

Flip the equation. Set a goal to earn $400,000 a year instead. It will motivate you to work towards your desires. With all the extra hustle, it will allow the buyer to think twice about spending so much on something s/he really doesn't need. And if the $400,000 income is achieved, then there will be no guilt spending so little.

Just like how you'll feel so much better eating a cheeseburger after you've trained six months for a marathon, you'll feel so much better spending money after taking years saving up for a certain stretch goal. The guy who got up to eat a cheeseburger after watching four hours of football isn't going to feel as good as the marathon runner who eats the same cheeseburger!

My Ambitious Goals

When I started suffering from tennis elbow at the age of 33, I made it a goal to go undefeated in one season at the 4.5 level. It was my way of giving the middle finger to pain. When I went 12-0 with various doubles partners in 2012, I felt an enormous amount of pride.

It was easy to replace my ratty tennis bag with holes with a snazzy looking one. Three years later when I got bumped up to 5.0 (top 1%), my tennis budget blew wide open because players aren't supposed to improve after the age of 35. 

In early 2015, I made an ambitious goal of growing organic traffic (not paid) to one million pageviews a month. After consistently hitting over 1 million organic pageviews a month for six months in 2017, I felt zero guilt paying $15,800 for a hot tub and $58,000 for a used Range Rover because it took me eight years of writing three posts a week. To understand how difficult that is, try writing one 1,500 word post a month. Now multiply that effort by 10. 

If you really want to feel better spending money, try to stick to something difficult for at least 10 years. Since so few do, once you do, you will have no problem spending to combat lifestyle deflation.

Finally, I had an ambitious goal of writing a book during the pandemic. When Portfolio Penguin approached me in late 2019, I decided what the heck after lockdowns started on March 18, 2020. Buy This, Not That took two years to write and became an instant Wall Street Journal bestseller!

6) Spend more aggressively before the children come

Now that I've been a dad for over six years, I realize having children may prevent you from splurging. Why? Because every parent wants to demonstrate good personal finance habits in front of their children. At the same time, most parents become wealthier over time.

As a result, to prevent living a life of monastic frugality for 18 years until your kids leave the house, you may want to spend aggressively before having kids. This way, you get spending out of your system and can be more frugal while raising your kids.

Avoid Lifestyle Deflation And Enjoy Your Money

Most of us are afraid of being judged by others for how we spend our money. But the reality is, everybody's financial situation is different.

Paying $10,000 for a first class ticket is ridiculous for someone making less than $100,000 a year. But if you're worth $100 million, $10,000 is like a dollar bus fare for the rest of us.

You can overcome your frugality disease by starting small, and working your way up. The easiest way to reduce your frugal habits is by making more money and achieving certain stretch goals.

It's when you buy things with money you don't deserve (trust fund, inheritance, lottery, using a credit card, your spouse's income, etc) that your conscience may start making you feel terrible about your spending.

You don't get a gold star for being frugal. Being overly frugal simply means you haven't earned or planned enough. This leads to lifestyle deflation. You only get a gold star if you're able to maximize your lifestyle with the money you've earned. Don't let frugality be a crutch or an excuse for not making more.

I regret not spending more in my 20s and 30s. In my 40s and beyond, I'm determined to let the lifestyle I enjoy keep up with inflation and then some. For those who have their finances together, I hope you do the same!

Related: It's Revenge Spending Time!

Achieve Financial Freedom Through Real Estate

Real estate is my favorite way to achieving financial freedom because it is a tangible asset that is less volatile, provides utility, and generates income. By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate a significant amount of mostly passive income.

In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I've invested $954,000 with real estate crowdfunding platforms to date.

Take a look at my two favorite real estate crowdfunding platforms that are free to sign up and explore:

Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the way to go. 

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio. 

How To Combat Lifestyle Deflation

Lifestyle deflation happens when you don't properly track your finances. Once you get a good understand of your finances, you can spend much more freely.

Stay on top of their finances by signing up with Empower. It is the best free financial app on the web. Before Empower, I had to log into eight different systems to track 35 different accounts to track my finances. Now I can just log into Empower to see how my stock accounts are doing. I can easily check how my net worth is progressing too.

Empower's 401K Fee Analyzer tool is saving me over $1,700 a year in fees. I had no idea I was paying them for years! Another great feature is the Retirement Planning Calculator. It uses real data and Monte Carlo simulations to produce realistic retirement results.

Enjoy your wealth to the maximum! The pandemic has reminded all of us that tomorrow is not guaranteed.

For more Financial Samurai, you can join 60,000+ others and sign up for my free weekly newsletter here. I've been helping people achieve financial freedom since 2009.

114 thoughts on “Stop Frugality From Leading To Lifestyle Deflation”

  1. Your advice about buying to build equity had me rolling on the floor in laughter,I rent in a Vancouver BC suburb,above ground suite for $500/mth which includes everything including the backyard.
    My friends who own( to build equity),never have time to enjoy life as they work a full time job and a part time job to keep building their equity position.
    By renting my space which I have never paid more than $750/ mth in my life has led me to accumulate financial assets which always return more than real estate.Speaking of which,every month this year my portfolio returned to me more than a years rent.
    My friends spend double what I pay in rent just on maintaining their houses(taxes,maintenance,internet,hydro,gas,cable etc),then you add in the mortgage payment of $2500+, for thirty years,and last but not least the opportunity cost of $200,000 down payment at 6%.My friends cost to own is around $4700/ mth,which works out to $1,500,000 over thirty years,my renting at $750 costs me $270,000 over thirty years.
    I know that they will have an asset to sell after thirty years that historically returns 1-2% but you would also have to take into account on my end of starting with a portfolio of $200,000 and adding $4200 a month for 30 years at 5% would give me a $4,352,000 portfolio.

    1. Glad I made you laugh! Always a good skill to have.

      Oh man, if only I bought Vancouver real estate 5 or 10 years ago! That would be sweet. I settled with buying San Francisco real estate and finally sold a house I bought in 2005 for $1.52M for $2.74M in June 2017. It wasn’t a huge percentage gain, but I walked away with close to $1.8M after the house appreciated from ~$1.7M in 2012 to $2.74M in 2017. It was the easiest $1M I’ve ever made.

      At the end of the day, if you’re happy still renting your same place 30 years from now, more power to you. You just have to look at what your lifestyle and net worth is today. If you’re happy, awesome! If you’re not, make a change. Why be poor if you can be rich and free right?

      Related: The Average Net Worth For The Above Average Person

  2. I love the example of how much you’ll be taxed on your wealth when you die. That’s definitely something to incentivize spending! I think the spending examples you pointed out related to living more comfortably in Cambodia were a great example! Since I’m far from retirement, I still try to be relatively frugal, but at the same time I want to live what I consider a comfortable and good life where I’m not just penny pinching the entire time even before retirement!

  3. I think how frugal you are depends on your financial obligations and where you are in the life cycle. If you have a spouse, young children to raise, a car and house mortgage it is probably advisable to be frugal regardless of age. Happiness can be obtained without a large amount of money. However if you are in the 6th or 7th decade of life frugality is hard to sell no matter the income or amount saved. I want to enjoy the moment because I do not know how many moment I may have. It is difficult to sacrifice all for a future that is not promised. The number of people who live to 100 is less than 1%. We did not come here to live and stay forever.

  4. Wait until youth travel sports start. I don’t even keep track of the money spent traveling all over to play the best competition.

  5. I am having the opposite problem right now. Hard to save more money with a little guy. The average monthly daycare fee is $2,500 in the Boston area and daycare give us a list of things to buy and leave it at daycare ranging from crib sheets to snow boots and snow suits plus others. It can blow up the monthly budget quickly.

    1. Yes, I definitely can see how a child can blow up a monthly budget. I guess I’ve been saving so aggressively for so long, but my buffer hasnt allowed me to feel The strain yet. I will budget for $3000 a month in preschool cost starting at age 2.

  6. We’re making a lot of these “spend more to get more” decisions lately. Some are real no-brainers – upgrade 8 hour train tickets across Germany from 2nd class to 1st for $30 for the entire family (and get access to free first class lounges, food, and unlimited coffee and beer!!). I’d be foolish not to, right? Upgrade to 1st on the flights across the Atlantic? I don’t know but probably several thousand dollars cash or equivalent in airline points. Probably not worth it at my budget level (where several thousand dollars could buy us a nice 1-2 week family cruise in the off season). Maybe one day I’ll really struggle with how I’m going to spend all this wealth and go for that 1st class ticket.

  7. Deciding to “spend more” has second order effects. There is more to the decision than the money spent versus your means. e.g. Traveling consumes energy, eating out contributes to your wasteline, replacing items (cars, furniture) too soon wastes scarce resources. It turns out that keeping the green in your wallet is often the “green” decision.

  8. MillennialStack

    I’ve lived in a more frugal mindset than I currently have. I think I could cut back but I enjoy spending a little more. Enjoying the moment is all we have but we don’t want to do it at the detriment of the future obviously.

    That being said, the times I had my head down and stacking were actually pretty good because I love seeing that net worth going up!

  9. I had just gotten a well-paying job when I had my very first heartbreak. I lived in a family member’s basement and paid a nominal amount of rent. He encouraged me to plan a visit to family overseas so that I would have something to look forward to while I tended my heart. I said no at first and told him I should start paying him more in rent since I had income finally. He laughed at me and told me that he couldn’t charge me more because the room was far too crappy and that I should spend my money how I saw fit. I called that family member and asked if I could come. Bought a ticket for 6 weeks later to take advantage of optimal purchasing time. I’m so glad he encouraged me to spend. My income had doubled but my expenses hadn’t. It was a good plan that did my heart well.

  10. I’m in awe of 5.0 tennis players since I’m a long time 4.0, I bow to your supreme talent level! I am early retired but make 100k in a couple of days a week of side gig activity and also spend about that much and 100k is also coincidentally about what my investments would provide with a conservative draw down ratio. So I suppose that means I’m spending about 50% in retirement and reinvesting about 50%. But I’m doing everything I want to do, in fact am typing this in the car as my wife is driving us home to Arkansas from a week of hiking 14er’s and riding a RZR on crazy Colorado mountain trails. It is a used car of course because I just can’t make myself buy a new one though it would not represent a significant cost to us.

  11. FS –

    I think I needed this, a nice little “kick in the ass” if I can say that. I tend to save 60-75% of my income with no real “FOMO”, yet. But putting it into perspective of, “if you spend an Extra $1, how much income is needed”? For me that would be around that $1.4-$1.45 mark, and one can easily generate side hustle income to get over that hump.


  12. Most of the articles out there are directed towards millennials. Younger crowd. Either single or couple folks are writing it. There is a complete lack of personal finance blogs by parents in their 40s. A single person or DINKs couple talk about putting max in 401K, how they save 90% of their income, and it totally does not sound right to folks with MS/HS kids.

    Life does NOT change after marriage. It changes AFTER kids.

    Before kids – one posts that next door millionaire drives a $3K Civic. After kids, the expenses which one never knew existed start coming up – and there is NO cutting short on them.

    Thats why I feel that internet is full of blogs by non-parents (or at least their success stories when they were non-parents), and hardly has any wisdom from 45+ year olds (who are probably too old to start their blog sites). Its all 40 and under folks.

    1. This is a great point. I am 36 and make around $125k with overtime. The goal right now is to make that without having to work so much. That being said, while I love this website, I feel it doesn’t cater to me. It’s impossible for me to put away so much because of a 16 year old daughter. It just makes me mad because I wish I had made better decisions in the past.

    2. andyfromaus

      Completely agree – the step-up in expenses pre-kids to post kids is difficult to comprehend, but simply for us it went up maybe 2x – from 80k -> 160k. plus you need a bigger house (as an upfront investment). And it won’t stop until they are 25+. so each kid basically adds around I estimate 50% more savings needed plus your increased house size

  13. deflationisreal

    Hi Sam,

    Huge fan of your blog. As I’m a living example of lifestyle deflation this post got me fired up.

    Currently in my early 40s and earn 6x more than i did in 2003, but I strive to maintain my early 2000s spending habits of 45 -62K per year. Due to poor investment and life choices over the past 17 years I don’t feel like I can spend more if I want to maintain my savings and retirement goals.

    I don’t see myself opening the purse strings anytime soon and worry that I won’t have enough to retire on. Inflation will continue to erode my lifestyle if I try to maintain my current spend and the grind gets old. I do live in SF which I’m now ready to part with and find a place more conducive to home ownership. You wrote a post on barely making it on $250K per year. I’m right there. Between my regular and side jobs I’ve made on average $200K per year for the past 4 years. I’m dumbfounded because it feels like a lot of money yet every April I find I spend around $90K in taxes- federal, state, local, SSI both fed and state, self-employment, investment taxes, and the new medicare up charge. I’m committed to my current 50-60K per year lifestyle because after taxes there’s really only investment income left if I hope at all to retire. I feel that success in SF and the bay area is really dependent on finding the right the spouse who shares similar financial goals. Every year I’m told it’s good that I’m paying more in taxes but frankly I want to keep more of my income in order to afford more than once a month Roam burger at $15/burger which if I was sharing a place and expenses would make more sense.

    Thanks again for keeping up the posts after becoming a new parent. I regularly check in for reasons to keep the faith in the idea of financial freedom.

  14. Love this article! One strategy I use is to hit my savings target — somewhere in the 35-50% range — and then let go of worrying about trying to grind out the additional 1%, 3%, 5% by being extra frugal. Hit the target and don’t try to save extra nickels. It’s a good mental strategy to be on track big picture but not worry so much. Easier to do after you’ve been saving for 5-10 years.

  15. Although most will feel more freedom once they build the wealth. This outlines exactly why we aren’t saving more money than ~35-40% of what we earn every month. It could have been more, but we have to be overly frugal as well. We want to enjoy dinners going out, travel overseas and much more. And yes, it cost us money. But rather spend a bit more now, instead of saving for the future that seems yet far away.

  16. The frugal mindset never leaves. My father has a city pension, 401k, house paidoff, etc. Told me he wouldn’t order wine on a flight to Italy cause it was $2 more than the beer…

  17. There is a difference between being ‘frugal’ and being penny-wise, pound foolish.
    Buy high quality goods which last for years, it will end up being cheaper, you will have fewer items, etc. Paying $30 a meal at a good restaurant vs 2 x crappy meals for $15 at your local applebees… etc. Going on that vacation you always wanted vs wasting money on visiting the same location 2 hours away over and over.

    As my income increases year after year, its more about fighting lifestyle inflation, I wish I had the problem of fighting lifestyle deflation, but my passive income is just terrible.

  18. blogsofstuff

    One time my Dad was talking about making sure his retirement money lasts. His spending in retirement was more than he planned for. It was only through the conversation that I learned he was worried THAT HE MIGHT HAVE TO TOUCH HIS PRINCIPAL !!! In his mind, retirement meant that you only spent the income generated by principal. Decades of frugality is hard to break!

  19. Interesting, I think my dad after an open heart surgery and reaching 75 years of age is in your shoes and is trying some lifestyle inflation, when he comes to visit me and we go out for to eat he is very open to going anywhere and pays for it too :)
    Maybe because I was raised by a super frugal, I got to see the dark side of being overly frugal, but well to do father I learned to strike a balance early on, . I still save like crazy, but the way I approach my spending is that : Does this Spending provide me a value in the long run? If the answer is yes, I go for it. Being a nice a pair of shoes that will last me a long time, a good bicycle that will help with keeping me fit and healthy. Or a night out in town with friends, that will increase my happiness and strengthen my social network.
    I have friends who are super frugal to the point of hurting their social life. If you keep coming up with excuses for not going out with friends and or insist in staying in and eating a meager home cooked meal people will eventually move on. Or barely travel to save on airfare and hotel. ( And they can afford it). My father had a lot of those habits.
    Again everything in moderation and nothing excessive. Everybody who knows me knows that I am very disciplined when it comes to money ( thanks dad), but I aint got a reputation for being cheap.
    I honestly think at the end of the day frugality shouldn’t cost you, your happiness and it doesn’t have to.
    Just remember if you can afford it and it provides value for you in the long run, go for it….

  20. I’ll never forget the time that I wanted to take my dad out for his birthday and he said he’d rather I just give him the money. That really sucker-punched me. I felt sorry for myself, but I also felt really sorry for my immigrant parents and their extreme “live within your means” mentality that they can’t seem to break free from. It’s depressing and very sad.

    1. Maybe it’s the food? My dad (and I) hate eating out because we’re uber picky eaters and prefer home cooked meals (especially when they’re made by my mother)! We can find something wrong in a cheese sandwich.

      Instead, I treated him to a foot spa treatment where the little fishies clean your feet. He loved it! Plus I help my folks out financially on their trips overseas.

      Maybe if they’re going on a trip somewhere, you can give them spending money or surprise Dad with a nice toolkit? I’ll never forget how happy my dad was when I brought the Makita screwdriver set home. You’d think I’d bought him a Lamborghini!
      I think I’m going to live vicariously through you guys until I FIRE and I’ve enjoyed reading the comments. Keep it up! :D

  21. Working Optional

    Thought-provoking article as always. I don’t know how you churn these out day in day out, but its something I aspire to.
    I love that people are frugal, but part of going through life is to enjoy the journey as well. Balance is key, and multiple streams of income help. Going to a nice restaurant, buying that pair of shoes or splurging on that jeep tour are all experiences we reward ourselves with, and visualizing a reward helps motivate us further.


    Hi. Married 46 yrs spouse has lost 52k (1k + mo) at Casino last 5 yrs
    I am devastated over this – being a Saver n hard working wife.
    Going underground now with my anger and sadness
    Can’t take enuf meds to help
    I need a divorce, or counseling ?

    1. Yes to counseling. Probably yes to divorce. You have a super serious issue. You need more help than an online blog can provide. Please get some professional help. I wish you well.

  23. Great post . We raised 3 kids and lived on my husband’s salary. We have always lived below our means although I wouldn’t call us misers. Our largest savings was staying in our “starter” home even when our income doubled. That allowed us to spend a bit more in other areas while still saving about 30% of income. All 3 children went to pricey private colleges, expensive summer programs , camps, braces, etc. I figure we spent about 1 million on them above the norm . After taxes. Now youngest is shooting for med school and my husband is 3 years away from retiring ( with a good pension thank goodness ). We plan to pay for at least 3 years if he is lucky enough to get in but the total will be $400000 of unexpected expense in our 60s. So parents, save and save some more. Guess we our super kid oriented ; it’s all spent on them and we plan on leaving them a decent inheritance . THAT makes us happy!

  24. I think we all carry enough guilt around in our lives, don’t need to add the frugality guilt on top of it. I think as long as you’re not masking your natural tendencies are are happy then it’s fine. If you’re happy being frugal then continue being frugal, if one would rather spend a little more lavishly once in a while or in moderation then one should do that. Someone mentioned Warren Buffett earlier, he ‘treats’ himself to a better McDonald’s breakfast if the markets are up but he seems to enjoy himself doing so and doesn’t seem to be unhappy about it.

  25. As long as you financially secured for the long term and know that splurging on certain high priced items won’t detract that, go for it. You will feel great in doing so and give you peace of mind.

  26. Jack Catchem

    What was that old quote? Something like “show me your budget and I will see your values”?

    Makes sense to me. I value a house, food, education, and a damn good violin teacher. If I wanted to hoard cash I could just sit at home and teach myself with YouTube videos.

    Instead my neighbors have stopped complaining about the noise and actually submitting requests. $ is a tool to be well used.

  27. Frances Marcel

    Being less frugal definitely goes counter to my inclinations. Just spent the last week figuring how to cut more from our monthly budget. Had not considered the inflationary aspect to income and lifestyle. Probably why we sometimes feel that we are in permanent lifestyle deflation mode. My husband is more of a spender and does believe in enjoying life, so we may somewhat balance each other out. I still feel guilty about ordering a pizza last week.

  28. I’m still frugal after achieving FI, but my favorite splurge these days is flying First Class. I only fly 2-4 times per year, and flying First Class is awesome.

    1. I flew first class to Europe on an overnight flight this past spring (my mom was treating me for a special retirement trip she wanted to go on), and it was so awesome! I don’t do international flights very often, but now I don’t want to go back to coach. I’m trying to convince my husband to splurge on first class tix next fall to Greece for a friend’s wedding. He’s against the expense on principal, but the reality is that the difference in price is less than half the amount we save each month – and less than a third of our average monthly net worth increase.

      If we don’t splurge now, when will we? Someone is going to spend our money one way or another: us in the future, our heirs, or Uncle Sam.

        1. The date isn’t set yet, but economy runs $1500-2000 and business/first is $4600-5500 per ticket depending on what days and airline you pick. So total difference for us both will be around $7000 of we upgrade.

          Our annual travel budget is normally $12k so that’s a huge expense for us for one flight on one trip. But our income exceeds $400k now and we are saving 40% of gross. Our net worth will hit $2m in the next few months as well. Since we’ve never traveled abroad together in the 5 years we’ve been dating/married, I’m not worried about this expense leading to general lifestyle inflation. It’s the perfect anti frugal one time splurge! I just have about 7 months to convince my husband of that before we need to book. :)

  29. Sam,

    Glad you put this out. I’ve been getting inundated by frugal everything which is why I decided to assess my level of frugality earlier this week. I am frugal on certain things so that I don’t have to be frugal in other areas. That’s probably why we spend so much eating out. Our family enjoys it and I classify it as both eating out and entertainment.

    I drive a Chevy Avalanche that I bought brand new in 2010 (weeks after I got back from a combat deployment) and my wife drives a Subaru Outback that we bought in 2016. This is not being frugal at all and I frankly don’t care. I’d like to save more but I don’t want to be frugal about every aspect of my life. I’ve been thinking about selling my truck for years but it’s come in handy too many times. My wife’s Outback will be out 8-year old daughter’s car when she’s ready to drive at age ~16.

  30. My take away from your post was that I will feel better about spending after I put together a serious budget for retirement and plan for the expenses of relocating. Once I have a detailed plan in place I can execute to the plan and spend to the budget. Currently I hold back because I’m just not sure.

    “Continued publishing 3X a week on Financial Samurai” is for us as much as it is for you. Please continue to post while you spend freely.

    1. Yes, once you have the plan, it is so much easier to spend. For example, if you set a 50% savings target or $5,000 a month and feel great about it b/c of the retirement cash flow calculations, then you won’t feel bad spending the other $5,000 a month on whatever you darn please.

      The uncertainty kills a person’s ability to spend.. .it’s like a temporary tax cut. Since taxes are going up in the next year, most people SAVE the tax cut, and don’t spend. There needs to be a sense of assurance, a sense of permanence that everything will be OK.

  31. The Alchemist

    It’d be nice to be less frugal, but I’m clinging desperately to the dream of buying a home in the Bay Area. It may be a pipe dream at this point; my income is just never going to compete with those of the Giggle and Facebotters, so my parsimony may be pointless, but I’m keeping at it.

  32. I’m about to super size my value meal for lunch today :-)
    Coincidentally, I have a similar post (work in process right now) to not be a slave to your money and live at little – in the present that is. As long as we have our future projected and the numbers to back it up, a splurge every now and then is not something we should feel guilty about.

  33. As of late, I have been trying to focus more on balance. I have spent my whole working life trying to save more and more. This year, our household savings rate will be around 55%. I don’t want to exceed that percentage. I am working on learning that it is ok to spend some money now on things I enjoy. Life is too short to not have fun along the way.

  34. I am definetely over frugal but feel the need to be with 5 small children and 1 income but we could tighten up more if we had to. I would love a higher savings rate, as we are not quite at 25%. But some day, I hope I can let go of my guilt to spending money! At the moment, I feel like its a good thing for us, and my spender spouse helps to balance me out.

    1. Hmm, I would definitely be SUPER FRUGAL if I had 5 small children! Best not to listen to my advice in this post :) I cannot imagine taking care of more than 2 children. Any tips?!

  35. There’s nothing wrong enjoying life after leading such a successful one. I can relate to your Uber feeling. If I won the lottery at 3 million I would still feel guilty not taking UberPool haha. A hot tub and car is well deserved especially with point #3 (our own mortality). 3x posts a week for 8 years is a toughhhh gig even if you did have magnificent help.

    I’m not a fan of the legacy tax…it’s my money dude, I pay it already, how are you taxing me again on my grave :P

    1. I donno Lily… I’d totally no longer take a pool or lyft line if I won a $3 million lottery!:)

      I’d probably fly first class everywhere and eat Toro sashimi and kobe beef every week!

      But I’d probably give a lot of it away b/c I want as many people as possible to feel like they also won the lottery.

  36. Great post Sam. I often have guilt about my million dollar home but it is still less than 3x my income and it has an awesome view. I am slowly accepting that it is the right decision and we should enjoy it more thoroughly.

  37. “Three years later when I got bumped up to 5.0 (top 1%), my tennis budget blew wide open because players aren’t supposed to improve after the age of 35.”

    I’ve been playing tennis since I was 5, but never really took it seriously until 5 years ago (I’m 29 now). My only expectation when I started playing again in 2012 was to improve, and I figured the wins would come along with that. From finding a few good hitting partners and being stubborn about learning new shots/strategies without lessons, I’ve gone from a mediocre 3.5 to a middle of the pack 4.5 in five years.

    I have two hitting partners in particular, one is 55 and the other is in his 70’s, who continue to work on things to make their singles games better, and they are my heroes. I hope when I’m their age, that I’ll still be playing like they do. In tennis, age shouldn’t have any affect on improvement, so don’t let anyone tell you that you can’t get better after 35.

    1. Well done! And thank you for your advice. It’s so hard for me to keep up with the power and speed of 23-year-old 5.0 players nowadays. That’s why I play doubles in competition now. But I will try my best. I did win my club championship for the second draw though! Beat a 32-year-old who played four years of D3 college tennis. It was an epic 2.5 hr battle.

      Let me know when you get to 5.0! How old are you now?

  38. I get what you are saying but I guess it’s not for me. I just wrote a post exploring lifestyle deflation as a source of happiness in itself. The more money I have the less stuff I want. The less stuff I have the happier I become. Not living out of a box but just less excess relative to what my socioeconomic peers are doing. To each their own.

    1. It’s actually not about having more stuff. It’s about having higher quality experiences and higher Quality things.

      One just have to be true to themselves and ask whether they are frugal because of their lack of income or lack of planning, or they really like to live with much less and died with much more.

      1. What’s a higher quality experience? 5 star hotel or a 3 star or a tent? What’s a higher quality thing? A Toyota Highlander or a Range Rover Sport? It’s all subjective and what makes you enjoy life more might not fit my definition of happiness.

        I might consider camping a higher quality experience than staying at $300 per night hotel. Does it make me cheap or my experience less fulfilling? Am I prioritizing frugality over experience? I prefer an older car because I don’t have to worry about things like scratches, comprehensive insurance, higher property taxes etc. I choose and enjoy lifestyle deflation because it feels right to me. It has nothing to do with depriving myself. I have enough money to do and have all the “quality” experiences and things described but I don’t see value hence my choices are different. I think that’s what’s important – this is a choice.

        1. It’s hard to hear the truth, but being frugal is definitely a symptom of not having enough money. Your examples highlight the case. A five-star hotel is nicer than a three star hotel. The people who are annoyed at those staying at five star hotels are actually angry at themselves for not being able to afford living to do the same.

          It’s all about being able to live in a five-star hotel and also going out in the middle of nowhere to tent under the stars. The person who is able to do both is the one who can maximize their lifestyle.

          The person who can only stay in a tent can definitely be happy, but will start feeling agitated when they see someone else living in nicer accommodations as well.

          The point I’m taking away from this post is that a lot of people are fooling themselves about “their choice of being frugal” when in reality, they have no choice but to be frugal in order to feel comfortable.

        2. Albert @ Mr. Smart Money

          Some things are subjective. But not all things. Your example of a hotel stay might be subjective… but some things are just objectively better.

          Like buying USDA select steak, vs. A5 Kobe beef.

          It may be that it’s not subjectively WORTH the price difference to you. But there is an objective difference in quality.

          If they were the same exact price, you would take the kobe.

            1. Albert @ Mr. Smart Money

              Ok. *not trying to start an internet debate or anything* but does that mean you never pay more for anything, regardless of quality difference?

              Because subjectively to you, it’s never ‘worth it’?

            2. No it’s not that I won’t subjectively pay more. But in the example of 5 star vs. 3 star. I’ve stayed at both with most of my 5 star stays being work hotels. In the US on my dime I’d rather stay 3 star than a 5 star most of the time I don’t think there is value there if I am paying for it.. (having to pay for wifi, no free breakfast). Oversea’s depending on the city I might pay for the 5 star, if it had sufficient value but I travel to see places not stay in hotels so most of the time I’d take a 3 star there as well and use the difference to Heli-hike or have some more wine.

              Yup I find 5 star hotels to mostly be overrated.

  39. Albert @ Mr. Smart Money

    I also like to look at it from a value perspective. Sometimes the more expensive version of something is way more worth it. ie. being frugal and buying cheap floss.

    Or in your example with the loafers. The ‘frugal’ version would not be anywhere near as good.

    1. They aren’t. The leather is hard and not durable. I love a well made shoe now with soft leather and a well made sole.

      I’d much rather have several pieces of well made clothes than a mass hoard of clothes not well made.

  40. #2 is the key here. If your income is good, then it’s easier to loosen up. I’m still very frugal right now because our income is somewhat uncertain. Once Mrs. RB40 retires, then we’ll get a better picture.

    Also, I think age has a lot to do with it as well. I think we’ll be a lot more relaxed about money when we’re 55. By then, retirement will be a bit more predictable. The timeline gets closer to a normal 30 years retirement. Kid will be out of the house as well.

  41. Sam you’re making sense. I’ve changed as well. Going from a $1500 Ford Focus and pinching pennies, to not reading restaurant prices or tag prices on clothes. Like you, I did the math on Personal Capital. Remember my post a while back? I’m gonna get to $250,000,000 in my life time. I’ll be fine. And like you I have too many sources of income. You’re thinking correctly.

  42. This is a good problem to have isn’t it?

    When people are on a strict FIRE diet, it seemed even eating a full McDonald breakfast can be a luxury.

    I must admit, being in my 20s and not having found a forever home a.k.a. settled, it makes me want to hoard more cash. But overtime I have come to realize that everything will be just fine if I stay the course.

  43. Great article, one of your best. There is nothing worse than somebody being cheap to get ahead, these people are not living, they are existing. I completely agree about owning a home, there is no feeling like owning it. My payment is now $450 a month for insurance and property tax. I will not read blogs of people that rent instead of buying a home because to me you are not free if you are paying somebody rent.

    1. Thanks. It’s funny how there is STILL a debate about renting versus owning your primary residence after multiple decades of housing price growth.

      There’s this one site in SF called SocketSite which is always cherry picking the negative datapoints after about 13 years! It’s b/c the owner missed the bull run. It sucks to miss opportunities, but to let it eat away at you for so long is terrible. His site could been huge if it was balanced.

      There will eventually be a slowdown. But will people take advantage when there is one? I donno.

  44. Recovering Engineer

    One comment and one question. I would be careful with “Divide your current net worth by the difference between 100 and your age. If the number is greater than your average annual spending, you should be able to spend more freely.” Speaking from recent experience dealing with elderly family members, long-term care in the last few years of life is very expensive. You’re looking at $5k-$10k/month for a memory care unit in an assisted living facility and even if you have “Long Term Care Insurance” the insurance company will find a way to get out of paying for most expenses. The great thing with Personal Capital is you can add planned expenses so I guess you could stick an extra $50k-$100k/year of expenses in the final few years of life and then see how the calculation works out.

    My question is how are you accounting for your spending on kids? As a fellow new parent I know my expenses are going up but this early into parenthood it is impossible to estimate by how much. It looks like you’ve added some spending goals that might be around the time for college tuition for your child but that’s just me guessing. Have you incorporated that into your lifestyle spending inflation? Will my kid be able to attend public high schools or will I be paying for private school in high school as well as college tuition? Will he get scholarships or will I be paying $100k/year in tuition in 18 years? I had a great handle on my budget and goals before kids but now these are the questions that keep me up at night and keep me in the rat race longer. I still feel a need to save as much as possible just in case, maybe in a few years when I have a better handle on child raising expenses I’ll be able to relax some more.

    1. New Father Finance

      I’m in a very similar place regarding new kids. My wife is about to give birth any day now and I’m struggling with how to budget for child-raising expenses. For example, we spent almost $2,000 this month on a doula, diapers, burp clothes, etc. to get ready for the new guy. Granted these expenses will go down as we get into a routine, but for now I feel like I’m in a “I don’t know the right amount to spend so spend it all” mentality that I’m desperate to get out of.

    2. My plan is to keep expectations low about my kid’s ability to be self-sufficient and smart enough to get scholarships, while also doing my best every day to teach him everything he doesn’t understand and introduce him to new things.

      In the process, I’ve started with something basic: A 529 plan that can grow to about $350,000 in today’s dollars over 18 years. At the minimum, I will contribute $14,000 a year = $252,000 after 18 years. Hopefully, it will also grow as well. There may also be other contributions from grandparents, but I won’t count on it. So the $14,000 a year in expenses is accounted for to pay for ridiculous college tuition when the time comes.

      Everything else, we don’t think about b/c we live so below our means, we have a large buffer to spend money on diapers, lessons, help, etc. We feel GREAT spending money on our son versus spending money on ourselves.

      How old is your child?

      The PC Retirement planner is great b/c you can add those additional real life expenses in the plan and then run the numbers.

      1. Recovering Engineer

        My son is only a month old so I have some time to figure things out. I’m planning on superfunding a 529 plan to get started with savings. For everything else I feel kind of like New Father Finance above, we’ve just been spending without any real regard to cost at this point because you have to have the basics right out of the gate.

        We live below our means but having the baby means we go from dual income to single income. I’ve always been compulsive about budgeting and saving even when I’m living well below the lifestyle most would say I could have based on my income. However my career field is not stable and my earnings can be volatile (bonus heavy compensation) so I feel like it’s important for me to maintain budget estimates even if we don’t have to stick to it 100% right now.

        As much as I love my wife, my in-laws did her a terrible disservice by never teaching about the value of money. The question of, “is this worth the expense?” is never asked in their house (which is why my father in law still works 12+ hour days at 65). So as happy as I am to spend money on our son I also know that if I don’t monitor that spending we will quickly become like the family in your “Scraping by on $500k” post. I would like to avoid that fate if possible.

      2. webbersworld

        Just had a son as well and am torn between a 529 and a custodial account. I am a New Jersey resident unfortunately – one of the few states that doesn’t offer any 529 benefits.

  45. I’ve been mulling over buying an F150 for at least 2 years now. Used, of course, there is a nice 2016 for about $30K that checks all of the needs I have (back up camera, 4 x 4, 4 door, 6 seats). in 2017 I will make about 260K and in 2017 it will be a shade over 300K as things currently stand. I am 36, and I just cant seem to pull the trigger, my wife tells me I work hard and deserve something for myself. She says I sacrifice for them all the time. That was nice to hear but I still just don’t feel good about buying the truck when I have a perfectly good Camry. Its a 2008 but only has 60K miles on it. Its been paid off for at least 6 years now. I just feel irresponsible buying it. My conundrum is that I will kick myself for not buying it in a week or so, just like I always do but the Camry is the smarter choice by far…

    1. Paul, once you get to $300,000, I am 98% sure you will NOT feel any guilt buying the $30K truck for cash. You will get one more year out of your perfectly fine Camry, and feel good reaching the $300K milestone.

      Take my advice! And if you don’t, let me know how it goes.

      1. You’re right, that will give me a year to save up the cash specifically for this purchase and re-evaluate if I still want it. Thanks for the advice.

    2. Paul, I finally got rid of my beater truck for a used CPO Ford F150 Platinum last December. I’m super happy with the truck. It was a 2013, 60K miles, and I paid 30K it (below the 1/10th rule for me). I’ve had it close to a year, and I’m still super-happy with it. I’ll drive it until it stops running. If you can afford it, it’s a great truck.

      1. Thanks for the reply. For me its between an F150 and a Tundra, but in general the Tundra seems to be 20% more on average. So, it will probably be an F150. I like Toyota’s history of reliability, but American trucks don’t really have the same reliability issues that American cars do… I’m sure I will be happy with it if I follow Sam’s advice and wait till next year when my year end income tops 300K. Also, paying cash would help me personally, in that I have a huge psychological issue with making payments, even when the interest rate is equal to or less than inflation…

    3. Paul,

      I think your ambivalence is normal. Maybe another thing weighing on your decision to buy a truck is the knowledge that in less than a few months the new-car-smell will be gone. Really, how long until the truck will feel like your camry? Another option: pick a car/truck even nicer than the F150 and rent it for a week. Take your wife on a trip because she sounds like a keeper. Then when you’re done you’ll have great memories, have scratched the new car itch, and when you get back to into your camry you’ll feel pretty smart.


  46. I feel the same…I m sick of frugality. I don’t even need to be frugal any more. still its tough to break old habits though and I sock money away in my stocks every month. I don t think I wanna do any more real estate deals-but I was looking at one today….oh well–I enjoy your blog–look me up if ever in Tokyo.

  47. New Father Finance

    Finding the right balance between living a meaningful life and not being smart with your money is certainly a challenge. My mother and sister are always looking at our lifestyle and commenting on how we’re being “cheap” (I hate that word). However, Mrs. NFF and I have been able to build a lifestyle for ourselves that we find a lot of value in. We spend time outside hiking, we cook together, we like to read, all things that are relatively low cost. But that also allows us to go out for a really fancy dinner every other month and take advantage of the fact that we live in a large city with good restaurants. The best financial advice I ever got was to spend freely on the things that matter most to you, and cut as much as you can from everything else. This is the surest way to minimize the feeling that you sacrificed your happiness for money.

  48. Warren Buffett is an example of a person who I admire for his accomplishments and sound advice but is guilty of being frugal to a fault. No matter how much money he has made he is never satisfied. If you believe him from his HBO documentary he worries about spending $2 for breakfast at McDonalds.

    After serious thought I think its a type of illness of always wanting more but being afraid to spend. The Great Depression was probably a big reason for this. You may argue that the world will be a better place because he will end up giving away so much to charity. However, he’s too afraid to do that while he’s living. He wants to keep increasing his safety net. I would be more impressed if he stopped waiting and gave it away now.

    1. I was thinking about writing this exact same thing. Why not actively give away your money now and try to be the best directive of your money? Why put it in the hands of someone else to try to fulfill your wishes?

      My mother is not wealthy, but she has enough. Every time I see her she wants to give me money (now my son) money, and every time I tell her I don’t want her money. And every time she tells me she would rather give it away while she 8is alive and do what she wishes to help, because she plans to give it away anyway when she dieds.

      1. That’s great your mother has enough to give away. Does she contribute to any charities? She might as well give it to people who need it now rather than wait. I understand the philosophy of accumulating a bigger pile of money to give away later but think about how much time could go by where it isn’t helping anyone.

      2. I am better off than my parents (2 retire teachers) but my Mom still wants to give me money at Christmas and on My Birthday, the amount has escalated over the years to a not so insignificant amount. She also gives money and time to charities that she/they support. (And gets a weight lifting workout in most Tuesdays moving 25lb boxes filled with can and dry goods at the local Feeding America warehouse). They also don’t want for anything in their lives monetary wise so the money she gives comes from their excess. They could afford to spend more on themselves but they honestly don’t want too.

        I don’t need their money so I decided last year to just pass it on to charities that I favor, which benefits me at tax time a little bit. I also receive some benefit because knowing that I received the gift does free up some choice to spend the money I have earned.

        1. I used to do this, or just pad my savings with unneeded financial gifts from family members, but allow me to suggest an alternative. My grandmother has been giving me a couple hundred bucks for my birthday for over a decade; she long ago quit trying to pick out gifts for all her grandkids and great grandkids. I used to just say thank you, but a couple of years ago I started emailing her to let her know what I used the money for. That amount of money is a drop in the bucket for me now, but I try to consciously spend the gift money separately to honor the gift. One year I splurged on a massage, another year I bought some accessories for my dog, or you could donate it, or use it to boost your Roth IRA. All stuff I would have done anyway, but I think she really enjoys getting my thank you emails and finding out where it went.

  49. Perhaps one of the most important epiphanies that I’ve had is that most consumption does little to enhance happiness. That isn’t to say that there aren’t things with staying power. Like you, I have a few things that I’ve spent more money on than other alternatives and you often do get what you pay for. The skill becomes figuring out which things will deliver real and sustained happiness and which won’t.

  50. TheCollegeInvestor


    I find myself being overly frugal quite often. I set a budget of what I can spend per week and keep it below 15% of my take-home pay. At the end of the month I always find myself saying that I can tighten it to 14% and then 13%. My excuse for frugality at this point in my life (20 years old) is that any money I am not spending, I am investing. And that money invested will be worth a lot more in the future and help fund my lifestyle as I grow older.
    In my experience being frugal isn’t a symptom of poverty, but rather being taught the value of money. I grew up in a wonderful household that has always done more than enough to take care of me and help me achieve my dreams. I learned frugality and have implemented it myself because I’ve seen firsthand the positive effects it has had on the financial situation of my family.


  51. Coincidentally I logged into my credit card account online before I read this.

    Since I stepped away from full time work June 1 (but staying busy with consulting and investing), our spending is down 50% year over year. But I feel like I’ve been spending freely the whole time.

    Will be interesting to see how this evolves for the rest of the year.

    1. Very interesting! Can you pinpoint certain types of expenses that disappeared? I can think of obvious things like reduced transportation costs, not buying coffee/lunch, not refreshing work wardrobe, but just wondering what the big categories were for you.

  52. I am pretty disciplined with my money and I don spend frivolously. From time to time, I get a little burnt out and start to wonder, when will I get to spend the money that I work so hard to save?

    I also ask, am I missing out on living in the present and the good things in life?

    To get around these burnt out feelings, I started to come up with a reward system for myself. Whenever I completed a project that increases my earning potential, I can reward myself with any dining out experience I want without feeling guilty. This is my reward for being disciplined with my money.

    1. A reward system is great. Like every EXTRA $1,000 you make, you get to spend $100, that way, you NEVER run out of money and it feels great. I really like the 10:1 ratio of earning and spending.

  53. On your death bed you won’t say I wish I’d been more frugal. Money is a tool and keeping expenditures in check is good planning. But deprivation or financial hording are bad things. They do nothing to improve your life on their own. I do something akin to your first point. Is the happiness something brings greater then it’s costs? Does it cost me to be indirectly straits? If no on both then I spend the money. I’ve found not wasting money on things I don’t value allows enough savings to more then cover the planning, I save fifty percent of my income. Your mileage may very. But simply not buying things that end up forgotten in a month has had a huge impact.for me.

  54. This is such a breath of fresh air amidst all the frugal tips floating around. Mr. FAF and I have earned little to moderate income a these years, so in a way we have been forced to live within our means.

    Now that Mr. FAF has a new job, I can see some thoughts of lifestyle inflation creeping into his head. I myself sometimes feel tired of having to save a couple of dollars here and there, and then feel guilty for buying ice-cream. I’m still trying hard to strike a balance between enjoying life and saving money. Thanks for the tips!

  55. Apathy Ends

    We aren’t overly frugal, and honestly should be a little more frugal in some areas, but are pretty comfortable with our spending vs savings ratio right now. I would rather focus on increasing income then cutting spending personally

    3 posts a week for 8 years is beyond impressive, especially at the length and quality we are used to on this site

  56. Yesterday, we honestly wrestled with the idea of going out for dinner. Should we spend the $30 on dinner or should we buy groceries and come and cook it? We weighed the pros / cons of each decision.

    We actually wrestled with it. It was at that moment (many more to come probably) that I realize we were being overly frugal. We have not gone out to eat since our baby was born March 25. So, we went, and I enjoyed every last bit of it.

    1. Love it Belle! Glad you enjoyed the meal. Congrats on your baby! As a new father, I can TOTALLY empathize with the sleepless nights, hard work, AND massively reduced time with you and your significant other. I hear it gets better though. Hang in there! :)

        1. I would raise it from an “it gets better” to an “it gets awesome” :)

          Watching our first child develop has been one of the most rewarding things I’ve experienced, the lack of sleep becomes largely an irrelevant byproduct.

  57. I definitely agree that you have to enjoy your money at some point in life. There is no point in hoarding it all on things for the future. It’s a fine line between spending now vs. saving for later but I think once you have been frugal for a certain amount of time you get a feel for what’s truly important. I’ve found that after I paid off our house that I don’t worry about some small stuff as much. We spend a little bit more but we’re still saving 70% of our income every year. So we don’t worry as much as we use to :)

    1. Mr. Freaky Frugal

      I agree! You definitely get a feel for what really matters. I think of it as the difference between Freaky Frugal and Stupid Frugal.

  58. I can completely understand your feelings on this. It’s ok to indulge once in a while. The human brain does not like monotony and it’s the same with frugality. The secret is not to allow lifestyle creep because then the indulgence becomes normality and stops becoming a treat anymore.

  59. Brad -

    Good points. People definitely need balance.

    Also, I believe a lot of financial success depends on ruthless prioritization. If we’re honest with ourselves, certain there is some level (perhaps high) of priority placed on enjoying life “along the way” – not just focusing on some endgame.

    We’re about to shift our portfolio to a more conservative model, and actually increase our draw a little. I’m not trying to die with $20m left. :)

  60. “Most of us are afraid of being judged by others for how we spend our money. But the reality is, everybody’s financial situation is different.”

    This is so true. We all question what they will say if we get a nicer car or go on that really great trip. But no one knows the truth behind any financial choice.

    We’ve been working on spending a bit more of our money. Hubs income has increased and we are still saving big. But there is definitely a guilt that you don’t expect when you spend. We’ve added fun budgets to our monthly budget, giving each of us more added to it each month to do what we want with, no questions asked. It’s only been a couple months, but it’s been fun. I would have felt a whole lot more guilty about my new running shoes if not for that!

    This is a really great example and reminder to enjoy the money we all work so hard to earn!

    1. I literally lol’ed on the train reading your comment. You are funny!

      I can’t remember the last time I ate breakfast at a restaurant. It sounds like such a luxury. I don’t mind going to Ihop for breakfast though hehe.

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