How frugal is too frugal?

[setab]

I've been reading and posting a little for several months now, read several of the books that have been recommended, and done some thinking. The thrust of a lot of the thoughts here is you have to save, save, save to the point of frugality so that tomorrow will be better. Obviously, that has considerable merit; however, sometimes I wonder if we don't go a bit too far. I hesitate to use a Biblical reference with this group, but, I am reminded of the story of the farmer who had a bumper crop, so he built bigger barns to hold everything. After he had saved everything up, he sat back and said now I can eat, drink and be merry. Unfortunately an angel came to see him just as he put his feet up to relax and said, "You fool, tonight your soul is required of you." Any chance we are being a little like the farmer? To turn the stock question here on its ear, "How little is too little?"

setab

 

[cute fuzzy bunny]

When you're doing things that take more than 5 seconds and save less than a dollar.

 

[setab]

When you're doing things that take more than 5 seconds and save less than a dollar.

Let's not turn this into another discussion about sex.

setab

 

[cute fuzzy bunny]

Corollary #1 to above rule: Sex is a frugal activity. Except for a few hazards, such as babies.

 

[KB]

I think being too frugal is when if affects other people.

Like leaving a small tip, or buying every last one of a good sale item. That's being too frugal.
If it doesn't affect others and it makes you happy to be very frugal, more power to you.

 

[youbet]

The thrust of a lot of the thoughts here is you have to save, save, save to the point of frugality so that tomorrow will be better.   

Hmmmmmm.........  I know there seem to be a few posters who push frugality very hard, but most seem to advocate balanced lives which includes putting a slice of the pie away for a later day.  Very little evidence of unreasonable levels of saving IMO.

  After he had saved everything up, he sat back and said now I can eat, drink and be merry. 

I certainly hope I'm like the farmer.  Having a bumper crop stored away and then devoting myself to "eat, drink and be merry" sounds good to me.  Beats the heck out of going out and starting yet another crop when there is enough in the storage bins for years to come.

setab.........  the "how little is too little" question is strictly up to the individual.  That's why I believe that knowing yourself and taking responsibility for yourself and understanding that the values of others may be different than your own is key to happiness.  

It sounds like you're getting to know yourself by contemplating these kinds of issues.  That's a good thing.  But, in the end you'll have to decide for yourself.

Enjoy your life in the way you see fit for yourself. It's the most valuable asset you'll ever manage.

 

[setab]

Youbet,

I always enjoy your posts and this response is no exception. They are thoughtful and tempered by humor and a touch of humor. One of the points of the farmer story, however, is that he failed to do exactly what you recommend. He was so busy acquiring stuff, that he failed to pay attention to what was really important. I totally agree with you that many of the posts here try to strike the balance in life both present and future. I just think sometimes we need to remind ourselves that full barns aren't everything, especially when we have no guarantees about the amount of time we spend here. Thanks for your response.

CFB,

I also appreciate your incredible sense of humor and your ability to hijack just about any thread.

setab

 

[cute fuzzy bunny]

I hope your check is in the mail.

 

[setab]

I thought you were supposed to pay me for that! I never get these investment things right.

 

[maddythebeagle]

Someone else in another discussion on this topic said that being frugal is getting good value, which I like.

I also agree with CFB's statement on wasting too much time to save a few cents. Your time is worth something even if you arent working

 

[BigMoneyJim]

Eating around the glass shards in a dropped jar of peanut butter is too frugal.

 

[cute fuzzy bunny]

I thought you were supposed to pay me for that! I never get these investment things right.

One of us worked and the other was amused by the result of the work, thats called 'entertainment'.

In fact, now that you've thought about the process, thats called 'education'.

Thats another check.

If you're washing off tin foil and plastic wrap, sitting in an uncomfortable house because you wont turn the air down or the heat up, you're eating food you dont like because its cheap, and your clothes look like you should be picking up cans off the side of the road...you're being too frugal.

When half of your waking thoughts are how to knock two bucks off of one of your bills and hand wringing over how much something costs, cut that out.

If you're turning over cars every 2-3 years, feeling that your 2500 square foot house is just a little "too confining" and throwing out all of last years clothes because they're "so last year!", you need to get a little more frugal.

 

[wabmester]

Here's my theory of frugality:

1) When you make a large purchase, like a house or car, your negotiation skills or lack thereof will overwhelm any sort of daily frugality, so don't sweat the small stuff.

2) The small stuff adds up when it's a recurring expense, so do sweat the relatively small recurring expenses.

 

[SolidA]

I am enjoying the banter - but it is a timely post, as my DH and I have been examining this question a lot lately. It is a delicate balance to live fully in the moment, yet set aside enough for the future. Hope I come close to getting it "right"!

 

[justin]

I gave up on being a cheap college student bastard now that I'm making decent money. Now I'm "just" a value conscious consumer.

 

[tryan]

When a dry sheet becomes tissue paper.

 

[Papi]

Frugality is all relative of course.  I have always felt that if I start being too frugal and not enjoying life day to day, then I've crossed the line.  DW and I are both not big spenders, but we do spend some money on things that some might consider frivolous or extras, but that give us enjoyment over time.  For example, DW just gave me a wonderful new piano for my birthday.  I love to play and it will give me enormous satisfaction for years to come.  But if we had been too frugal, DW would have either never bought the piano or delayed it for years.  I don't view that as living.

 

[retire@40]

Frugality is like pornography.  It's hard to define, but you know it when you see it. One man's frugality is another man's overspending or cheapness. You know you are being overly frugal when you start asking yourself if you are being overly frugal.

There is a fine line between being frugal and being cheap. If you use coupons, you may be frugal.  If Bill Gates uses coupons he is being cheap.

 

[Nords]

Eating around the glass shards in a dropped jar of peanut butter is too frugal.

Man, that peanut butter post was a spine-chilling classic.  I don't know which scared me more-- conceiving the idea, spending all that time heating/straining the peanut butter to "remove" the glass, or sending a blissfully-ignorant spouse to work carrying a peanut-butter sandwich.  We should probably copy it from their board and add it to this "Best of the Boards" as a shining example of how not to ER.

Any chance we are being a little like the farmer?  To turn the stock question here on its ear, "How little is too little?"

Here's some ways to tell if you're being too frugal:
- If you're reading Amy Dacyczyn's books and thinking to yourself "What a wimp!".
- If you're spending more gas & time shopping for bargains than you're saving on them.
- If it costs more to grow/harvest/prepare/serve the food than you could spend at the grocery store (or maybe you're possibly being too foodie).
- If you're suffering from vitamin, diet, hygiene, or sanitation deficiencies.
- If you're deferring medical care or physical rehab.
- If your entire house is warmer than 90 degrees in summer or colder than 65 degrees in winter.  (Average human skin temperature is about 77 degrees.)
- If you hate what you're eating but you got a really really good deal on it.
- When the difference between completing the deal and walking away from it is less than 1%.  Maybe when it's less than 5%.
- If you're not having kids or pets solely because they're too expensive.
- Re-using dental floss for any reason.
- When a fraction of a used dryer sheet becomes toilet paper (and you're holding a pair of scissors while thinking to yourself, "Yeah, but that part of it over there is still clean...")
- If you feel deprived instead of freed, then you're definitely being too frugal.

On the other side of the spectrum, here's signs that you could be more frugal.  I'm not saying that they're mandates, but opportunity is knocking on the door.
- Paying monthly interest on a credit-card balance
- Feeling a sense of "That's it?  That's all there is?!?" when you haul your wallet out.
- Feeling the same sense after the experience you just paid for.
- Spending more than 40% of your take-home pay on non-discretionary purchases (food, shelter, transportation).
- Saving less than 10% of your take-home pay.
- Eating out more than a couple times a week (and I'm including breakfasts, lunches, & snacks in this category).
- Disposing of possessions when they have more than half of their life left, especially if the disposal is because they're "out of style".  This is especially true if the possessions are pets or other family members. In-laws are borderline.
- Not being able to recall where the money went.
- Spending more than $5/day on the same experience-- coffee, snacks, cigarettes, booze.  I'm still trying to decide if sex fits in this category but I think I need to do more research.
- Not knowing how to complete a transaction at eBay, FreeCycle, or Craigslist.  (No, not that part of Craigslist, we're done talking about sex now.)

 

[ESRBob]

KB,
Good question. At the end of the day you and your family have to work out an acceptable level of sacrifice balanced by living today.

My acid test has always been about how I reacted to 'unavoidable' or ''bad luck' costs. If getting a parking ticket (In New York, that is pretty much unavoidable ) ruins my day, then my budget is too tight. If a broken sump pump ruins my monthly budget (and throws me into OCD fits of checking my portfolio performance) then the budget is too tight.

Being a completely passive recipient of market returns can be emotionally difficult for some. For me, the part-time work thing helps me feel I am able to do something to make a little fresh income to offset some of these unexpected bumps in the road.

One last point: Your biblical example is about someone who spent all his time making money and forgetting to live, (I think). No matter what you spend and save during ER or the years leading up to it, you can't forget about friends, health, family, hobbies, smelling the roses...

 

[larry]

If you're washing off tin foil and plastic wrap, sitting in an uncomfortable house because you wont turn the air down or the heat up, you're eating food you dont like because its cheap, and your clothes look like you should be picking up cans off the side of the road...you're being too frugal.

When half of your waking thoughts are how to knock two bucks off of one of your bills and hand wringing over how much something costs, cut that out.

Dang, that's how I got here in the first place.

 

[Poundkey]

..........and sometimes being frugal can reap unexpected rewards. We've been cutting paper towels in half for years (saw this on a post here also). We had in-laws to visit one time and they must have thought we were really slumming, because next time they visited they brought a case of paper towels.  .......and.......we cut those in half when they left....

.......and being too frugal? That's when your lawn furniture used to be your living room furniture.

......#....

 

[wabmester]

My favorite example of misguided frugalness is when people drive long distances or wait in long lines for "deals." Somehow they forget to factor in the cost of gas or time-value, and their bargains cost them a small fortune.

 

[haha]

Here's my theory of frugality:

1) When you make a large purchase, like a house or car, your negotiation skills or lack thereof will overwhelm any sort of daily frugality, so don't sweat the small stuff.

2) The small stuff adds up when it's a recurring expense, so do sweat the relatively small recurring expenses.

This is interesting. But really, for a retired person aren't all expenses recurrent? I may buy a moderate priced car every 5-7 years. I enjoy negotiating and tend to do fine; yet whatever I can save on the purchase of a $22,000 car twice a decade could be swamped by the variation in daily lifestyle expenses. Especially if you have a wife who is into grooming, not hard at all for her to do $250 a month without breaking a sweat.

So it seems to me that one's overall background expectations of comfort, degree of luxury, quality and type of food and entertainment are very important, both to people still working and trying to save, and to retired people.

IMO houses in this context are very important, as is any large investment. Especially for a retired person, screwing up your investing side is likely to be a bigger factor than spending an extra $10K per year. If you are retired, and have $2 million in invested assets, and decide to buy an $800,000 80 year old house in Seattle, well several things could happen, and not all of them would be good.

One thing though that is definitely too frugal is anything that would cause your wife to head down to see a family lawyer. Remember, a wife is a girlfriend with a lien on your assets.

Ha

 

[bosco]

A Scotsman walked into an apothecary dangling a used rubber, and asked the pharmicist, "how much to repair this prophylactic?"

The pharmicist informed him that normally they are not repaired, since a new one only cost about $1.00. But for $.50 he could probably repair it. The Scotsman said "I'll be right back."

He returned an hour later still holding the gross thing, and announced "the rrrrregiment votes rrrreepair!."

THAT's too frugal...