June 14, 2024
Here’s Why I Regret Being So Extreme Saving Money

CatLane / Getty Images/iStockphoto

Most people spend too much and save too little of their paycheck. But it’s possible to go too far in the opposite direction.

Read next: 26 Ways To Make $1,000 Fast — In a Week or Less

Learn more: 7 Unusual Ways To Make Extra Money (That Actually Work)

While saving more money helps you build wealth and passive income streams, and possibly reach financial independence at a younger age, extreme savings and frugality come with a cost. Before budgeting for a high savings rate, beware of the following pitfalls.

Missed Experiences with Loved Ones

Life is meant to be shared. Sometimes that means spending money to share experiences with your family and friends.

“In their relentless pursuit of savings, I’ve seen many people sacrifice cherished experiences, personal growth opportunities, and meaningful connections with loved ones,” said Abid Salahi, co-founder of FinlyWealth. “One particular client of mine, driven by an insatiable desire to save every penny, missed out on attending important family events and cultivating hobbies.”

Instead of being exclusively focused on saving, he advised, “Prioritize quality time with loved ones, engage in hobbies and activities that bring you joy, and cultivate a mindset of abundance rather than scarcity.”

Tolls on Personal Relationships

Missing out on shared experiences aside, hardline stances can impact your personal relationships.

Carl Rodriguez of NX Auto Transport has seen it firsthand. “One lesser-known downside to extreme frugality is the potential impact on relationships. Saving aggressively can sometimes lead to conflicts with friends or family members who have different spending habits or expectations.”

That proves especially true for your romantic relationships, where your finances intertwine with another person’s. “It’s important to find a balance and communicate openly about financial goals to avoid strain on relationships.”

Lack of Investment in Your Children

The better experiences and education you provide your children, the more likely they are to grow into successful, balanced, intellectually curious adults. But don’t let your desire to save money interfere with being present for your kids.

Mado Eldemrdash from Tireonway.com weighs his own regrets about investments in his children. “I worry it has affected my children, the quality of schools and clubs we’ve sent them to. All these financial behaviors can impact our quality of life and may affect my children’s professional futures.”

Neglected Personal Development

Sometimes personal development costs money. While you can and should start for free with personal development podcasts and books (or audiobooks) from the library, getting to the next level, whether personal or professional, takes money to join an elite mastermind or attend the right conferences or events.

“Personally, my biggest regret is not striking a better balance earlier on,” admitted Bricks Coggin, owner of ABC Puppy Zs. “There were years when I could have invested more in both my personal and professional life that may have enriched my overall well-being and advanced my business operations.”

Ben Broch of Cover Letter Copilot echoed that sentiment: “Looking back, investing more in personal development, wellness, and even leisure could have enhanced my effectiveness and satisfaction both personally and professionally.”

Slower Business Growth

Broch tied his lack of investment in himself directly to slower growth in his business. “One significant downside to extreme saving is the opportunity cost associated with not investing in personal or professional growth. For instance, in the early days of my startup, excessive cost-cutting delayed critical hires that could have accelerated our development and market penetration.”

Coggin shared a similar concern. “While saving aggressively for the future, one might miss opportunities in the present. For instance, in my business, reinvesting profits could mean better facilities or more staff to improve our service, but extreme saving sometimes delays these improvements.”

Neglected Personal & Social Needs

Adam Wood, co-founder of RevenueGeeks, worried about neglected needs. “Financial stability gives peace of mind, but extreme frugality and penny-pinching are bad ideas. When people become overly cautious with their money, they may refrain from buying even essential items, resulting in a less satisfactory quality of life.

“Frugality can harm your health, family, and friend circle, as well as your relationships.”

Myles Mclean from Grill Hound also mentioned the social cost. “One downside of extreme frugality is that it can lead to social isolation, as I often decline social activities that cost money. It can also cause stress and anxiety over spending any money, even on necessary or enjoyable things.

“I sometimes regret missing out on experiences and opportunities that could have enriched my life. Overall, while saving aggressively has its benefits, the emotional and social costs can be significant.”

Cheap Personal Belongings

There’s a difference between being frugal and being cheap. Frugal people look for the best value. That sometimes means spending more to buy a high-quality item that they can use for years on end. Cheap people just buy the cheapest option available. Which often falls apart right away.

“Loving cash influenced me to purchase low-quality objects that damage quickly and have short-term warranties,” lamented Eldemrdash. “I found that it costs me much more in the long run. Also, when I postpone buying needed items, it sometimes costs me more when I’m later obligated to purchase at a higher price.”

Lack of Small Pleasures

Small pleasures provide the texture of life. Karl Tippins, editor-in-chief at Interest Rate, found himself regretting these small but meaningful losses after adopting extreme frugality. “It simply stops you from experiencing a lot of great things in life, whether they are material or experience-based.

“Even though there are many enjoyable things you can do for free, we cannot dispute the fact that money is a major factor in living life to the fullest. You miss out on things that could have been amazing if you were more balanced than being strict when it comes to your frugal lifestyle or extremely rigorous with your savings. These extreme rules limit or block you from experiencing real enjoyment.”

Brick Coggins expanded on this. “This might mean fewer vacations, limited dining out, or skipping social events that require spending. Over time, this can lead to a sense of missing out on life’s enjoyable moments.”

Final Thoughts

A rewarding life requires balance. You could indulge in your every whim, spend every penny you earn, and save nothing to secure your future. Or you could hoard every dollar, rarely allowing yourself small pleasures, and even missing life’s big moments like important family and social events.

Abid Salahi summed it up when he said, “Extreme frugality can foster a scarcity mindset, where individuals become overly fixated on deprivation and constantly deny themselves even modest pleasures or indulgences.”

Find your own balance between building wealth and enjoying the present, for an equally happy today and tomorrow.

More From GOBankingRates

This article originally appeared on GOBankingRates.com: I’m a Super Saver: Here’s Why I Regret Being So Extreme Saving Money

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *