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Author Jovan Johnson.
Jovan Johnson
Growing up, my mom taught me to balance frugality with spending where it makes you happy.
As an adult, I decide where to splurge and cut back based on her lessons.
I share the same ideas with my financial planning clients: You don’t have to be frugal all the time.
As a kid, I never fully understood why my mom would go shopping almost every other week, dragging us along to multiple stores.
As an adult now I completely understand. Shopping is one of the activities that truly makes her happy. My mom loves food, travel, entertainment, and shopping. These are areas where she will splurge.
However, to compensate for this, she is more frugal or cost-conscious in other areas. This balance allows her to do the things she loves while still saving and investing for the future. Her splurging has not derailed her retirement plans at all.
Growing up, she would often preach that life requires balance. As an adult now who has a career in financial planning, I wholeheartedly agree with her.
I’ve taken her lessons on balance into adulthood
Being frugal is not a bad thing. It only becomes an issue when it is taken to the extreme. I believe that everyone should have some sort of “frugality” as a part of their life, but you must be smart about it. It is okay to splurge on the activities that you love doing, but you may have to be willing to be cost-conscious or cut back on other activities.
This truly benefited me and my brother as kids growing up. We were able to have many vacations and entertainment experiences that we will cherish forever. Now as an adult, I am very adamant about prioritizing the activities that I love such as travel, entertainment, and fitness while being a bit more cost conscious with other things. I do not have to feel bad about spending $5,000 on a vacation because I am willing to live in a more affordable home with a smaller monthly payment.
My mom would often tell us “You get what you pay for.” She taught us that sometimes it is worth spending more money for quality products. If you are too frugal, you may find yourself spending more money in the long run than you expected because of poor quality.
I teach my clients balance, too
I have helped many clients over the years take that dream vacation or buy that dream home or car. Not one of them regret their decision.
Yes, it is very important to save money for retirement or future expenses. But it is also healthy and important to enjoy your present life, as tomorrow is not promised. To help clients make these dreams happen, I have them create a list of goals and priorities. We dive deeper into what is important to them. I often ask them questions such as, “If you had one year to live, what would you do with your time?”
When I run retirement projections for clients, I often notice that many are saving much more than necessary for their spending goals in retirement, sacrificing happiness today when they don’t have to. It’s OK to be frugal for a short period of time if you are saving towards a larger goal such as a down payment for a home. However, extended periods of severe frugality can harm your well-being.
Extreme frugality can be mentally and socially draining, and it can cause isolation and distance from those you love. Spend that extra dollar sometimes to create new experiences with your family and friends. If you want to be frugal, make sure that it is for a goal or purpose and with limitations.
Frugality should not take away from the joy of living. Do what you love and save money on other things.