Too Frugal - Anybody Else Struggle Spending Too LITTLE?

[FIRE-Traveler]

Hi everyone, this is my first post.



I just found this community today while searching Google, and after reading a few interesting threads decided to join.

I feel like there are a lot of like-minded people in here, but I'm wondering if one aspect of my perspective might be an outlier?

Short version: I'm too frugal (cheap?) and struggle with spending my money.

I'm in my 40's and "mostly" retired. I have a small business that doesn't take much time, but generates pretty good cash-flow. In addition, I have a lot of diverse investments.

My parents were both SUPER frugal. Even to the point where they died with a LOT of money. They could have had a much better life (and relationship with each other, family, and friends) had they spent more more and worried and stressed less about money.

You'd think I would have learned from that, and made better choices. Unfortunately, it's just ingrained in me to be frugal, which has also impacted my life and my relationships.

To try and force a different perspective, I've even put together a spreadsheet with "worst-case" scenarios, i.e., stock market tanks, business fails, house value plummets, kid's college is 5x more than the average, etc. etc. etc.

Basically: "If I live another 40-50 years, and worst-case most things falls apart, how much will I be able to spend monthly?"

... and even in that case, I'm still going to be just fine.

So, my questions for anybody reading and/or interested:

1. Am I the only one that struggles with spending money?
2. Does anybody else have problems with being "too frugal"?
3. How does one overcome these kinds of struggles?

I'm honestly not trying to "humble-brag" or whatever the kids say. I'm very grateful that I have the opportunity to even have this "problem"... it definitely feels better than worrying about living month-to-month and not having the flexibility and safety that money can provide. I just wish I could overcome some of the frugality issues, and I'm very curious if I'm a statistical outlier in this group or no?

Looking forward to your thoughts and replies!

 

[mpeirce]

The challenge is that most of “us” here had to develop fairly frugal habits to get to FIRE.

It DOES take some time to get used to spending more money.

I’ve been FIREd for about 10 years now and I still clip (digital) coupon at the grocery store.

BUT, I’m now able to spend the extra money on some nice things, like first class travel. Well, sometimes.

For me, it’s really a matter of finding things I want to spend money on. I’ve found some and I enjoy doing so. ....and I still don’t want to needlessly spend extra money at Kroger when I can get $1 off cheddar cheese!

 

[mystang52]

Frugal, in and of itself, is not bad. It's bad if you can have a better life that you can afford, and don't do so in the name of being frugal.

 

[GrayHare]

How much are you spending? At your age, a diversified investment portfolio should be able to handle about a 2.5% withdrawal rate annually with little risk of you outliving your money. If you're spending a little less than that, I'd not call it frugal, just conservative. OTOH, if you're spending less than 1%, that's probably unnecessarily frugal, and if you can't figure out how to spend more on yourself, donate to charities you'd like to support.

 

[travelover]

Yes, I've spend my whole life optimizing spending and diverting the savings to investments. Now I'm at a place (humble brag alert) where my pension covers my actual costs, SS provides mad money and my portfolio is largely untouched. My DW is working on me to pry open the coffers, but it is hard.

Maybe I should buy a boat.

 

[SecondCor521]

Welcome to the forum.

I am too frugal as well. I'm 52, fully FIREd about six years, and spend at a net rate of less than 1% of my FIRE stash per year.

I think there are at least a few others here that are at sub-1% spending rates...but I'm not sure if they consider themselves too frugal or not.

Like you and like @mpeirce mentioned, I have/had frugal parents and my frugality got me to FIRE, so it's understandable that it's a hard habit to break.

One question for you to consider is whether the "too frugal" judgment is coming from others or from yourself. If its from others, I'd say don't worry about it. If that's what you really think, then you'll probably be able to change.

I would add in, though, that although I'm making some effort to not be as frugal, I'm also pretty content with my life as it currently is. If you're happy with your current frugal life, then that's something to recognize.

As far as how to deal with it:

1. Gifting, either to family members or to charities you support, is a good way to develop a bit of anti-frugality.

2. Your own mortality will creep up on you and you'll realize (a) you can't take it with you and (b) you need to do what you enjoy now even if it costs money, because you may not be able to later.

3. Find out what you value that you can use money for. For me, I've discovered that I like using money to make bothersome problems go away. So, for example, if my car oil needs changing in February, but it's cold outside, I'll take it to the nice oil change shop and spend $50. Which is too much for an oil change, but it makes a problem go away.

Related to this, I have found that just "blowing" money (however one might define that term) doesn't work for me. Even if I can, wasting money is worse for me than not spending it.

4. Ease into it. What I've done is two different things:

a. First, little by little I've given up some of my frugal ways. For example, I don't chase or track cheap gas prices - I just fill up at my usual place, or wherever is convenient. This might cost me 10 cents a gallon, or $2 a fill-up, but I can afford not to pay attention anymore unless I feel like it. I also don't clip coupons anymore, again, unless I feel like it.

b. I have a threshold amount of dollars that I've decided I don't need to worry about. Currently it's about $200 although I'm mulling over increasing it. Below this threshold, I just don't bother. So if Target offers me a $50 discount for signing up for their store card or whatever - nope, it's not worth the hassle factor. This allows me to skip agonizing over things or spending brain power on stuff that won't move the needle enough any more. It also then frees my mind and time to focus on the bigger items that do matter.

5. Practice makes perfect. Once you start to loosen up the purse strings and see that the money left behind is still there and growing, you'll get more comfortable with it.

 

[Sojourner]

How much are you spending? At your age, a diversified investment portfolio should be able to handle about a 2.5% withdrawal rate annually with little risk of you outliving your money. If you're spending a little less than that, I'd not call it frugal, just conservative. OTOH, if you're spending less than 1%, that's probably unnecessarily frugal, and if you can't figure out how to spend more on yourself, donate to charities you'd like to support.

+1

I'm also "guilty" of spending much less than I could... but that's how I was able to FIRE in my mid 40s. Now that I'm in my 50s, I'm starting to see that spending a little more freely actually feels pretty good, and I'm doing my best to not pinch every penny. My annual spending target is 3% of my investment portfolio, and although I'm still not quite there yet, I'm getting closer. I agree that if you are not spending at least 2.5% of your portfolio each year (on average), you're probably being unnecessarily frugal.

 

[W2R]

FIRECalc says I can spend twice what I'm spending, even if I live to age 117. But seriously, why should this be a reason to struggle? I am at peace and happy. That's the whole point of having an adequately funded retirement, I thought.

I buy what I really want or need, and then I stop - - enough is enough.

Who knows, unexpected end of life expenses may use up every last cent. If not, my heirs deserve anything I can leave to them.

On a scale of 0-10 for life's problems, I'd say this was a solid 0.00000000001 (least problematic).

 

[rodi]

My family members would say I'm too frugal. And do, often! I'm not as frugal (or have a much smaller nest egg) than some here - but I'm still withdrawing less than 3% each year.

We did have a reassessment this year after the pandemic changed some of our plans related to travel... combined with hubby's upcoming 70th birthday... We're upping the travel budget for 2022 by triple. Pushing trips that were "soon" closer to "now" while we are both still able to travel and do physical stuff. It was painful putting down the $$ on these trips. (Machu Picchu was 100% pre-paid because that saved $1500 - that payment in full almost a year in advance hurt *this* years budget.)

My 21 year old and my 19 year old are firmly convinced we're too frugal though. Doesn't help that 19 year old's girlfriend is from a higher income bracket so he's comparing things.

 

[Ole Red 29]

I have always been frugal. My wife has always been more of a spender. Over 36 years of marriage we have each moved toward the other where now we are less polar opposites. This has allowed us to enjoy life in the moment and still save for the future. Any time I feel my wife is overspending, I remind myself divorce would be much more expensive.

 

[Palmtree]

After almost 6 years in retirement, we're still very frugal. After decades, it's a hard habit to break. A pension takes care of most of the needs so we are only pulling around 2% or less from our nest egg. I will admit we are getting better and loosening the purse-strings a bit more this year. Travel, new cell phone, new computer, donations and 2 new e-bikes were the most recent spurges.

I read something a few weeks ago that really hit home. There is only three things that can happen to your money. You can spend it. Your beneficiaries can spend it, or the government can spend it. I would recommend you choose wisely.

 

[braumeister]

We're upping the travel budget for 2022 by triple. Pushing trips that were "soon" closer to "now" while we are both still able to travel and do physical stuff. It was painful putting down the $$ on these trips.

I feel incredibly fortunate that we were able to get some bucket list trips done before the pandemic. We have always watched our spending closely and never really got much over 2%, but in the three years before the pandemic started we went to Denmark, Sweden, Scotland, England, Iceland, Norway, Hawaii, Ireland, and Antarctica. Three of those trips were with organized groups (Lindblad in Scotland, OAT in Ireland, and Hurtigruten in Antarctica), but the rest were on our own.

Horribly expensive, but we had built up a sizable travel budget over the years and were able to handle it. We are so thankful that we did, because the wonderful memories will last a lifetime and honestly they have helped us get through this weird situation the last two years.

I think that any time you have a deep desire to see some part of this wonderful world you should try to make it happen. Travel memories don't really fade, in my experience. I can still vividly remember my first visits to Iceland and Germany while in the Air Force 50 years ago.

And even though we have whittled down the bucket list to only a few, there are so many places we want to go back to that we're already planning our next trips. By all means, go for it!

 

[finnski1]

We are pretty frugal as well but try not to be cheap. There is a fine line between the two and many times I have crossed over it only to cuss myself out later.
DW and I are wired that way. We can't help it. However we don't want for anything and are very content with our lives. Honestly we could easily spend 2 or 3 times what we do but we just can't find things to spend it on.
We could go big and buy the 2nd home as many on here have but we are just uninterested. However I also never say never and who knows what we will do 5 or 10 years down the road.
On the other hand we have purchased 8 brand new vehicles since we have been married 37 years ago. That alone should qualify as not only not frugal but makes us down right spendthrifts.
We have no kids to leave it to so that should in theory help us spend it all down. I'm sure we won't!

 

[Philliefan33]

Think about how your frugality affects your immediate family. Are they shivering under blankets in the evening because you won’t turn the thermostat above 64 degrees? Probably too frugal. Are your kids missing out on extracurricular activities because you won’t pay for them (but you can afford it)? Might be too frugal. Are the teens whining because all their friends got a new car for their birthday but not them? Probably NOT too frugal.

Think about the memories you are creating for the family, and if you will be seen in a favorable light. Don’t be Scrooge before the three spirits visit, counting his money and being miserable.

 

[Aerides]

Do you have a spouse/partner/children? If so their input matters more than ours. If you are asking them to forgo "normal" stuff, that's a concern.

No vacations? No toys? Hand-me-downs only? No extra-curriculars/music/sports?

Does your partner have to ask permission or risk your displeasure if they treat themselves a bit? (talking a new outfit or hobby thing, whatever)

Do your worries overcome rational decisions, or come up in conversations with any frequency?

Do you forgo repairs or replacements for things that are worn down and most reasonable folks would replace?

Those things would be too frugal. If you're not doing them, then it's just a choice.

 

[Gumby]

If we need or want something, we buy it. The problem is that we don't need anything and don't want much. More than likely, there will be a ton of money left when we die, but I don't care about that. Someone else can worry about how to spend it.

 

[RetiredHappy]

My father was extremely frugal and died with an estate worth about a million dollars back in the mid 90s. My sister is frugal like him but not me. We pretty much buy whatever we want, some frivolous, belong to a country club and travel 3 months a year. The "trick" is to figure out whether we can afford to live the way we live and the numbers look good, so we don't need to worry about it.

In your case, just look at the numbers for how you should reasonably spend, not be frugal, and if they work out fine, then just spend the money.

 

[street]

I have that same disease. It is something I believe once you have it you will always have it. I/we still use all the frugal ways today as we have through the years and the way we were taught from depression raised parents.

I have been retired ~5 years and as I get older each day, I have opened up to spending a little more. I do find it hard to spend on things we don't need but would like.

 

[RobbieB]

I just did it. I winced at the end of the year when I found that I was blowing about 6% instead of the "safe" (nothing is ever safe) 4%.

Yup, I did it for 7 years straight. And at the end of the seven years I have 45% more dough than I started with.

So, if my spending stays constant, I'm now in the safe zone. But DSD only has a year more of school at UCLA, the home improvements are done (95%) and 2 late model cars are in the driveway.

So, looks like my spending will decrease and I'll have to look for more ways to...wait for it...

Blow That Dough -

 

[JDARNELL]

I have that same disease.

Right. It's hard to change horses from what got you to where you are today. I too have this challenge although I do seem to spend a lot of money on assets to produce even more. I am always thinking about how to optimize things to get the most benefit even if that benefit is not today but into the future. I find I enjoy the challenge.

I have made strides to be more like Robbie and BTD with planning on recapitalization of two vehicles in 2022. We did splurge a little in loaded models but this marginal decision isn't changing the needle on the green waste piling up.

We normally spend a lot on travel however my travel and willingness to travel has been severally limited in the last 18 months. I have found out how much I loath someone telling what I can and can't do and having to follow an illogical set of uncoordinated rules at this point in my life. This is after 20 plus years in the military and a decade of early retirement. In fact the thought of this is so painful that I am sure it has impacted my ability to spend more because the "just in case" could raise its head.

 

[Dtail]

My father was extremely frugal and died with an estate worth about a million dollars back in the mid 90s. My sister is frugal like him but not me. We pretty much buy whatever we want, some frivolous, belong to a country club and travel 3 months a year. The "trick" is to figure out whether we can afford to live the way we live and the numbers look good, so we don't need to worry about it.

In your case, just look at the numbers for how you should reasonably spend, not be frugal, and if they work out fine, then just spend the money.

I just did it. I winced at the end of the year when I found that I was blowing about 6% instead of the "safe" (nothing is ever safe) 4%.

Yup, I did it for 7 years straight. And at the end of the seven years I have 45% more dough than I started with.

So, if my spending stays constant, I'm now in the safe zone. But DSD only has a year more of school at UCLA, the home improvements are done (95%) and 2 late model cars are in the driveway.

So, looks like my spending will decrease and I'll have to look for more ways to...wait for it...

Blow That Dough -

Ah a breath of fresh air for spending.
A good thread would be a follow up years later on "I should have spent more now that I am 90".

 

[sengsational]

...wait for it...

 

[COcheesehead]

Spend money freely on what you value. Spend little on what you do not value. Formula for money happiness.

 

[FLSUnFIRE]

I'm being a little cheap right now (relative to what I can statistically get away with) but I'm ok with that as I ease into spending mode.



If the markets stay friendly, my strategy is to to "budget" in order to spend... like the government! and not to save. My current budget is more of a projection of expenses but going forward in to my 2nd full year, I expect to have mandatory spending on such things as travel and maybe an occasional toy or luxury. I might make my rule that all unspent goes to charity so I cannot "save" it.


I'm also considering a remodel of my kitchen if/when my NW hits a certain amount... nothing drastic but might just do it all at once instead of upgrading as things break.

 

[silvor]

I posted a similar thread about this year’s ago.

I don’t know if I am just frugal, or just uninterested in a lot of things. I am 59 and could retire. But jut sure what I’d do all day. I don’t care about cars. I don’t like to travel. A lot of that has to do with I don’t sleep well outside the house. I feel like I have everything that I need, I really don’t want anything, and the wife and kids seem happy with what they have.

All that said, every calculator I run I will never run out of money. Yet, I am still frugal. So I feel like I should spend it.

Ugh.