3 Important Lessons in Living Frugally, But Not Too Frugally

Guest Post Author Bio: David Bakke enjoys living frugally in Atlanta and frequently shares his best financial tips and experiences on Money Crashers, an online resource ranked as one of the top personal finance blogs online.

In response to a pay cut at work three years ago, I started living a frugal lifestyle and decided to save wherever I could. I started by cutting grocery expenses, and then expanded to lowering monthly bills and reducing insurance fees. Eventually, I staged an all-out assault on every area of spending in my budget. I still find new ways to save everyday, but for about the past year or so, it’s fair to say that I have lived a completely frugal lifestyle.

In my quest for frugality, however, I’ve learned that some would-be saving methods are not truly practical. In fact, it’s easy to lose money in an attempt to be frugal. I’ve unintentionally gone too far a few times, and in doing so, learned valuable lessons about trying too hard to live a frugal life. Below are my three biggest discoveries.

1. Losing Valuable Time
Being employed full-time and running two home-based businesses over the past few years, I’ve learned the true meaning of the phrase “time is money.” I must consider time commitments before I go ahead with any money-saving initiative.

A good example of this is clipping coupons. Even though I claim to live a completely frugal lifestyle, would you believe that I rarely clip coupons or take part in extreme couponing? For me, the process just isn’t cost-effective. I spent a lot of time scouring the newspapers and seldom yielded any coupons that I could use. I’m a vegetarian and I eat quite a bit of organic foods, so my diet doesn’t match up with many manufacturer’s coupons. I was spending two hours a week to save maybe $10. By taking action on some side business ideas, I could make far more money in those two hours.

Lesson: Time is just as important and valuable as money. Why else would we need effective time management tips to help manage our days? Coupons might be a great tool for your family, but you may have other well-intentioned time drains that aren’t really saving you money. Cutting back on landscaping services, for example, might seem like a big slash through an unnecessary expense. But if spending three or four hours on your yard work is keeping you from bringing in some extra cash, hiring a low-cost professional is well worth it.

2. Sacrificing Ethics
Being frugal is a worthy effort, so it may seem strange to consider the relationship between being “frugal” and being “unethical.” The overlap is surprisingly dangerous, and if you ignore the issue, you can end up in trouble. Too often, the daily tools for saving a buck or two involve blurring ethical boundaries or simply breaking the law.

Don’t go the dishonest route to save. It’s simply not worth it, though temptation is lurking. It’d be easy to try to slip some groceries past the cashier, fraudulently file for multiple rebates when the limit is one per household, or fake your way into a senior citizen discount you’re not really eligible for.

Lesson: At the end of the day, you still have to live with yourself. Keep all of your money saving ideas on the “up and up.” Don’t let an attempt to save $5 here and $10 there land you with legal trouble, tax problems, or hundreds of dollars in fines.

3. Avoiding Rewards
This topic might be the most important piece of the puzzle. In the course of heightening my financial life to true frugality, I found myself completely shying away from spending money on myself. While indulgence is bad for the budget, ignoring your needs is incredibly counterproductive.

I still struggle with this today, but if you’ve made significant strides in your personal finances, reward yourself for living frugally. When you make a big difference, take a small celebration. For example, if you’ve gotten yourself down from five-digit credit card debt to a zero balance, then your monthly bills are the lowest they can be, so it’s okay to spend a little on yourself.

Even if you’re not 100% out of the woods, but you’ve made significant progress, periodic rewards and small splurges are the key to maintaining your lifestyle and avoiding frugal fatigue. You don’t want to save up all your money for the “rainy day” that never comes. However, don’t go out and drop $2,000 on a 55″ LED, 3D television just because you’ve had a good financial week.

Lesson: If you don’t reward yourself from time to time, then there may be little point to living frugally. You don’t even need to buy yourself a new toy or expensive meal. For example, I recently rewarded myself by setting aside enough money to start upgrading my house. I’ll get to enjoy new paint, new blinds, and new appliances, all of which I can apply or install myself – staying true to a frugal style even in rewarding myself. It’s doubly enjoyable!

Final Thoughts

Frugality can be quite addicting, and it often becomes its own reward. But you need to know when to say when. Don’t sacrifice a good chunk of free time in your life just to save a few pennies, never do anything unethical to save money, and by all means, reward yourself from time to time. With this strategy, you’ll be able to live a truly frugal life, and fully enjoy the benefits of doing so.

In what other ways do you live too frugally? Have you found yourself in these traps on your path to a more frugal life?


3 Important Lessons in Living Frugally, But Not Too Frugally — 25 Comments

    • @101. Cheers to that. I am not much of a TV watcher but I have heard of those extreme couponers. I can’t imagine spending 40 hours a week finding deals on things that I will never use. Time is precious and I have much more valuable and important things to do than shop.

  1. Wow, I literally have your exact life.

    I ALSO live in Atlanta, eat mostly vegetarian foods (my boyfriend is a strict vegetarian) and I’m renovating/upgrading my house myself … spending money on the “parts” (appliances, tools) while being mostly self-sufficient with the “labor.”

    Plus, the very first sentence on my blog’s “What Is This Site About?” Page talks about how I think clipping coupons is a waste of time.

    How weird! I have a doppelganger out there!!

    • @Paula. It’s great to hear you are on board with this kind of living. I am glad to hear you have a partner in the fox hole. I too am a vegetarian- actually trying to go vegan. If you ever want any good recipes, give me a shout.

  2. Good article. It’s too easy to forget to reward ourselves. I like a new shade of nail polish (I do my own nails) to perk me up & it doesn’t cost an arm & a leg. I don’t coupon because we eat mostly fresh foods that don’t have coupons. It’s the highly processed foods that usually have coupons & they are not good for our health. We have always been concerned with eating healthy foods & even more so now that we’re retired. Good health is true wealth!

    • @Maggie. I love that line- good health is true wealth. That’s great!! I might want to steal it….lol. I totally agree. People underestimate how much the state of their health can influence their wealth and retirement options. It is really important to take the best care of our bodies that we can. We, like you, eat a lot of fresh food and therefore never get to use coupons-they are always for the junk. Glad to hear you are on such good track…you will be celebrating it later.

  3. I am going through this feeling right now, I have 2 old (16 & 14 years old) cars. They are in excellent condition mechanically and appearance, however my wife and I bored with them. I would love to replace them, but I hate payments. I would rather use the money to invest. My frugality is topping me. BTW, I max out my retirement savings and have no debt except for a small mortgage that will be paid off in 6 years. I will defer the decision for 3-6 months.

    • @Krantcents. I can relate. There are some things I would like to replace too but if they are still working than it just doesn’t make sense. I guess the best case scenario is to wait until we can pay straight cash for the items and have no debt. Glad to hear you are on track with your retirement savings. That is one of the things we are working on this year- getting it to a better state. We are also trying to pay off our mortgage quickly. Hopefully be mortgage free in 10 years. Good luck with everything and let me know if you buy a car in the fall.

  4. My family would probably say that I live too frugally by driving around a car with duct tape on it, but I’d just rather use the money for other things!

    • @Jackie. I have seen plenty of cars like yours- no need to worry. What I would worry about though is rust and decay happening to your car if it isn’t fixed for a long period of time. It is good to take care and maintain items so they last a long time. Glad to hear you are focused on saving money though. That’s great.

  5. Thank you so much for the words about coupons. We have dairy and soy intolerances, and there are very few processed food items that don’t contain those two, so I don’t coupon much. Instead, we focus on making food from scratch and fruits and veggies. Sometimes I cringe when I see all of the junk food people buy with coupons. Couponing can be good, but if you are buying box after box of junk, consider what you are putting into your body.

    • @Mom’s plans. I totally agree. We can’t really use coupons either since like you, we eat fresh wholesome food. It’s ashame I can’t get a discount on organic fruit or veggies. I have to admit, I also cringe when I see what is in other people’s carts. I don’t want to judge but I do wonder if they ever think about what their diet is doing to them. Glad to hear your family has good habits though. That’s great.

  6. Time is money. I already don’t have enough time to do everything I want. If I have 2 hours, I’d rather relax a bit and catch up on my reading than clip coupons to save $10. My time is worth more than that. 😉

    • @RB40. Cheers to that. I can totally empathize with the lack of time. I don’t know where it goes. I constantly find myself running out of time to get things done. I am making a real effort this summer to make more time for fun-we’ve been working too hard.

    • @Spruce up your finances. Darn rights!! Time is money. I think this is something I have really grasped the last few years. I just don’t want to waste any of my time. I really evaluate things now. I guess it’s because as you get older, the less free time you have.

  7. I’m glad there is someone else out there who doesn’t go coupon crazy. Like you, I can never find coupons that match with my diet!

    I’m not sure I’ve crossed the line of being “too frugal.” I believe we need to enjoy life! I am striving to live a balanced life!

  8. Thank you for these thoughts. I totally agree on the first one – time is money! This is why I avoid couponing as well. I believe the most important thing in my frugal lifestyle is swapping. I trade anything for anything: old computers for a new cell phone, clothes I don’t use anymore for the service of a babysitter and so on. Sign up on barterquest.com, because they let you trade almost anything and it’s always worked for me so far.

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