Are You TOO Frugal? Here’s How to Tell
Am I too frugal?
I tear paper towels into smaller pieces to use as napkins and I’ve negotiated a 40% discount in a regular bookstore.
To me, that’s all reasonable frugal living.
On the other hand, I don’t reuse dental floss or dig popcorn containers out of the trash at the movies to get free refills — like the Penny Hoarders in my post about weird things people do to save money. I’m not that compulsive about spending less.
But there’s some evidence you can become addicted to saving money.
Researchers have found the pain and disgust areas of the brain (the insula) light up when test subjects see the price tag on expensive chocolate — even when participants are chocolate lovers.
Some people may have an even stronger disgust response to paying too much, perhaps even a compulsive aversion to spending money.
Whether you pinch pennies as a rational choice or a reactionary compulsion, what do you consider to be too frugal?
We all draw the line differently, but here are five indications you may have gone too far to save money.
1. You Buy More Than You Need
My friend knew all the tricks for getting a deal, and she regularly paid just a few dollars for a shopping cart full of groceries.
Great! Except when I helped her move, we had to throw away 200 pounds of old meat she’d accumulated in a freezer over five years — all bought on sale, of course.
It makes sense to get the best deal you can on the things you buy.
But buying a $5 item for $1 isn’t very meaningful if it’s something you don’t need or won’t get around to using.
When “getting a deal” becomes a compulsion, you might start buying more than you need. In that case, every savings “deal” could really be an additional cost.
2. You Start to Cross Ethical Lines
I sneak snacks into the movie theater, except on Tuesdays, when a medium popcorn is $2.50 instead of the usual $7.
I’ll never pay $7 for popcorn or $5 for a bottle of water!
I’d go to the movies less often if I didn’t have my snacks, so my sneakiness means the theater owner can at least make a small profit on the tickets and Tuesday popcorn — which is better than nothing. I’m comfortable with my reasoning, or rationalization.
On the other hand, my same friend loads her purse with food to go when she eats at an all-you-can-eat buffet. For me, that crosses an ethical line.
We could argue all day about when frugality becomes unethical, but if you start crossing your own lines, you’re probably going too far just to save a buck.
3. You Ignore the Long-Term Cost
I used to buy the cheapest shoes I could find, but eventually I did the math.
By buying high-quality shoes on sale — and still paying twice as much as I would for cheap shoes — I actually saved money. The higher-quality shoes lasted three times as long.
Sometimes it makes sense to buy the cheapest item, and sometimes it just costs you more in the long run. For examples, see my post on things to buy and not to buy at a dollar store.
Long-run costs are not just about what you spend on the products themselves. There are other costs to consider, like the cost of vet visits if your cat eats the cheapest foods. Or even your own future health care costs if you live on cheap ramen noodles.
4. You Ignore Your Needs and Desires
Think back to a few purchases and experiences you’ve passed up to save money.
If you feel no pangs of regret, congratulations! You made a rational frugal choice.
But if you find yourself wondering “what if I’d taken that trip,” or “what if I’d bought that bicycle,” or something similar, your frugality may have gone too far.
If you’re not sure whether you’re passing up something good just to save a few bucks, wait.
Scientific research shows a link between delayed gratification and life satisfaction, and there are several ways in which procrastination helps you save money.
But the main point here is most impulsive desires fade with time. So if yours persists, it may be too important to pass up. Get out that wallet!
For example, here are 12 things these money bloggers never regret spending money on.
5. You Forget the Value of Your Time
The value of your time is a personal calculation, but one you might want to do.
You don’t want to work for a low “savings wage” — or what you save per hour for your frugality efforts. Instead, you might be financially better off by using that time to make money.
For example, you might put in an extra hour at work instead of spending hours clipping coupons to save $4 or $5.
Plus, some ways to save money yield more per hour. For example, three of the seven entries in my post on ways to make $100 or more per hour are actually ways to save money.
It makes sense to do those before you spend 15 minutes filling out and sending in a rebate form to save a buck or two.
Your time is valuable, so spend it wisely, even if it means passing up some opportunities to save money. You don’t want to be too frugal.
Steve Gillman is the author of “101 Weird Ways to Make Money” and creator of EveryWayToMakeMoney.com. He’s been a repo-man, walking stick carver, search engine evaluator, house flipper, tram driver, process server, mock juror, and roulette croupier, but of more than 100 ways he has made money, writing is his favorite (so far).