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Most experts will tell you that living within your means is ideal. But too much of a good thing can go south, especially if you’re taking your penny-pinching to the extreme.
Although being frugal can help you improve your financial health, according to Ann Martin, director of operations of CreditDonkey, it can sometimes take a toll on your mental health.
“Unfortunately, many people become spending-phobic in their quest to live a more frugal life, which can lead to anxiety around money,” she explained. “In the worst instances, people may become overly hesitant to spend money on even essential items, which can lead to a lower overall quality of life.”
Below are some of the downsides to living an overly frugal lifestyle.
It Costs You Time
“Frugal living takes time and effort,” said Janita Grift, frugal living expert and owner of Frugal Fun Finance. “For example, if you commit to using a price comparison app such as Flipp, you’ll need to spend time finding the cheapest price on each grocery item.”
She noted that while being frugal is well worth the effort, it’s easy to take it too far.
“Personally, I avoid taking frugality too far by choosing to only compare prices on staple items like bread and milk,” she said. “Additionally, I only compare prices for two grocery stores instead of three, four or more.”
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It Can Cost You Relationships
Saving money often means making sacrifices, including setting a hard budget for leisure and dining, said Grift.
Friends
“If you’re extremely frugal and decline a friend’s invitation for dinner multiple times, it can put a strain on the relationship,” she explained.
While there’s nothing wrong with cutting down on non-essential expenses, she said it’s important to find a balance between being cheap and frugal. “I personally find balance by creating a budget for dining out and tracking how much I make per month, so I know how much I’m allowed to spend on non-essentials.”
Family
Jill Lamar, a licensed therapist at Thriveworks, noted that this pattern of extreme penny-pinching can ultimately also affect your parenting and marriage.
“Frugality often means saying no not only to yourself, but to a partner and children,” she explained.
“Most kids have a difficult time understanding why their friends can afford something they can’t,” she said. “Pouting and temper tantrums may occur. Kids — and many adults — often fail to grasp the concept of delayed gratification, and budgeting may require completely forgoing things you or they hoped or planned to have or enjoy.”
She explained that a partner used to a higher-end lifestyle may bristle when belt-tightening is necessary — for example, belt-tightening that means a staycation rather than a cruise and dinners in rather than out.
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It Can Cost You More Money in the Long Run
“I used to buy the cheapest clothing and kitchen tools,” said Grift. “However, Istopped doing this because it cost me more money in the long run.”
For example, she said she bought a cheap $30 frying pan that kept wearing out, and she eventually had to keep replacing it every year.
“If I had instead spent $100 on a frying pan that lasts an average of 10 years, I would have saved $200,” she said.
David Kemmerer, CEO of CoinLedger, agreed that this can end up costing you big. “One downside can be needing to replace cheap appliances and materials around your home. In this case, it’s usually best to spend a little more money on good quality items that will last.”
He said replacing things frequently means your frugal living is actually costing you money. Another area where these downsides emerge would be in terms of quality of life.
“Sometimes, people take frugal living to an extreme where they feel unable to spend any money toward hobbies, entertainment, vacations, etc.,” he explained. “I think above all it’s important to strike a balance to combat some of these negative components of this lifestyle.”
It Can Have the Opposite Effect
According to Carter Seuthe, CEO of Credit Summit, extreme frugality is often not easily maintainable, so when people inevitably stop being frugal, they often end up settling for the opposite of frugality.
“It is kind of like how people will set crazy fitness goals for their New Year’s resolutions, work out really hard for a couple of weeks, and then end up not working out at all from February through the rest of the year,” he explained. “You have to be realistic with the goals you set, because it is difficult to maintain extremes but much easier to keep up with moderation.”
Make Your Money Work for You
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