Being Too Frugal Got Me Into Trouble, But I Learned 3 Valuable Lessons
Sometimes it takes learning a lesson more than once before it sticks
Too frugal? Gasped every personal finance fanatic across North America. There is no such thing.
I used to be you. Terrified to spend, only focused on debt repayment and living for my next paycheque so that I could make another transfer over to my credit card. It was exhausting. It was depressing. It was hard.
But — it was necessary for that brief moment in time.
Four years ago I was heavily focused on becoming debt free, and no one could stop me. To be honest, I’m glad no one did stop me because if it weren’t for that fierce frugal superstar that was 2015 me, I would probably still be drowning in credit card debt, wrestling with my student loans and crying into my Ichiban every single night.
For an entire year, I avoided the malls, shared a rental with 5 other people, and didn’t do anything fun. Okay, that’s a lie. I still had fun. But looking back on it now it sounds pretty awful.
During debt repayment I learned a lot about how to save money
When I was paying off my debt I learned how to control my spending, good credit card behaviours and habits, how I could rebuild my credit score and how to save money so that I wouldn’t fall back into old habits once I finally started living that #debtfreelife.
The day I paid off my last credit card bill, my monthly automatic contributions started flowing. I had money going to my vacation fund, to my retirement fund, to an emergency fund and even into a rainy day fund. My life became an endless circle of saving. Payday became less and less of an oh-my-god-she’s-finally-here and more of an oh-right-it’s-payday. Things felt great. I was feeling fortunate and knew that so many other people didn’t get to feel this way. Therefore, I didn’t want to take a single dollar for granted. “Everything must be accounted for,” she said, with her fist in the air like some kind of political activist.
Living with scarcity mindset is a very real thing
Once you experience life without something — whether that something is food, shelter or money — the moment you have that “thing,” your mind constantly reminds you that you never want to be without that “thing” again. A scarcity mindset is the belief that you will never have enough money, and that you need to be very cautious of that money now that you do have it because you fear what will happen when you lose it. In fact, that feeling that you will lose it is inevitable. A scarcity mindset is feeling fear that because you didn’t have enough food to eat in the past, that once you do have enough food, you need to hoard it all in case you suddenly run into a time in life where food will be hard to come by once again. To be honest, this mindset can be truly suffocating.
Once you reach the end of your debt repayment journey, scarcity mindset is a common theme. Learning how to manage your money appropriately, while still allowing yourself the freedom to live life is extremely challenging. Many people save and save and save all of their money because they never want to go back into debt. Others spend and spend and spend all of their money because they finally have it after not having it for such a long time. I was in the save and save and save category.
After becoming debt free, I was afraid to spend my money
In the year following my debt freedom, the only money I spent was on my wedding. I saved enough so that I wouldn’t have to go into debt for the big day and so that I wouldn’t leave that day with any balance owing on my credit cards. It worked. I managed to pay for my wedding in full. And it worked again when I decided to hold off on my honeymoon so that I could save enough to avoid going into debt yet again. It’s still working. Before buying anything significant or even purchasing anything small, I save for that item before I buy it.
However, it became more of an addiction for me to save everything I earned rather than spend it. “Why would I want to spend any money if I could save the money?” I thought. And then, I found out that I was pregnant, and my mind started to spiral.
Children are expensive. Babies need a lot of stuff. I am not ready to give up my financial freedom. How will we provide for this kid? Can we afford this kid? Will we go into debt?
Do you see where I’m going with this? All of a sudden I panicked and entered scarcity mindset. Every dollar that I earned once I found out I was pregnant, until December 2018 (when we splurged on a family vacation) went into my savings account.
Then one day I let myself make what seemed like a harmless purchase
One month before I was going back to work, it hit me that I didn’t have an office space. Considering I work from home it seemed counterproductive to attempt to work from my bedroom, the kitchen or a coffee shop. So, my husband and I rearranged our guest bedroom, and I was given half of the space to set up an office. Half a bedroom? I felt so big time.
However, given how much HGTV I had been watching while on parental leave, in my mind there was an endless opportunity for what I could do with this little area. Immediately, I began scouring Pinterest for ideas and searching IKEA and Wayfair for furniture. For some reason, I felt all host-of-a-renovation-tv-show and didn’t set a budget or seem to care about the price of any items. I just wanted an Instagram worthy space — even though no one but myself would be seeing these two walls, like, ever.
Within three weeks, I had made my final decisions and had a shopping cart full of IKEA findings. The total? $512. But look how cute, she proclaims:
For anyone who shops online, you’ll know the feeling of excitement. You receive the email that your order has been received and will be shipped to you soon. It was exhilarating. After spending no money on myself other than on Starbucks and the mandatory-massages because of my back pain — it felt nice to buy something that I didn’t need (per se). So, I started to find more excuses for other items I “needed” to buy.
One medium-sized splurge lead to many more buys
After I finished the office space, I realized that there was another wall genuinely lacking. My baby girl needed a play space that had HGTV-Instagram-Pinterest vibes, too. I mean, what kind of mother would I be if I only bought furniture for myself? That night, I made another purchase through Wayfair of $289 for her storage-saving play area inspired by my insanity.
One night later I realized I “needed” a new bathing suit for when we do family swims, which lead to a 2-bathing-suit-1-pair-of-flip-flops purchase totalling $133. Two nights later I realized my husband’s birthday was coming up and planned to buy him new cologne. But if I was buying him new cologne, I might as well add my “needed” purchases from Sephora, too. Another $341 later and here we are.
What did we learn? She says, in her most motherly voice of all time
I spent over $1,200 within one week after going nearly 15 months without buying myself anything, and I have no one to blame but myself. What I don’t want you to think is that by living frugally, I suddenly turned into some spending monster who had no self-control. However, what I did learn is that by restricting myself for over a year, I had forgotten what it was like to purchase something for myself like a responsible adult.
You can be doing everything right with your money and suddenly take three steps back because you forget how to manage those dollars appropriately. Money is problematic when you don’t have it, but it’s also problematic when you do. The only way to control the problems that can arise is to learn — and with that, continue to learn. Sometimes it takes learning a lesson more than once before it sticks. And unfortunately, I just learned why shopping sprees can be dangerous (yet again).
How can you avoid going off the deep-end with restriction?
You’re not a robot. You don’t have to restrict yourself from everything. Choose one or two of your favourite “fun” parts of life and pencil them into your budget. Buying new clothing and new makeup without a plan is okay. But you don’t need a plan to save yourself $1,000 a year to purchase these clothes — other than this one: Put away $20 a week and then when you find a sweater you really love, you’ll already have a good chunk of savings.
Avoid saving just to save. I’ve said it (more than) once, and I’ll say it again. If you don’t have a plan for your money, it’s not going to end well. By just keeping money sitting stagnant in your checkings account, you’re setting yourself up for failure. Set a goal, invest the money or be realistic in the fact that if you don’t have a plan, you’ll end up blowing that money on something silly.
Self-love isn’t just about spending. If you’re truly dedicated to debt repayment or saving for a more substantial financial goal, it’s important to understand that there are other ways to provide yourself with happiness aside from buying material items. Although clothing and makeup make me happy temporarily, I find that reading blogs, watching YouTube and baking are even more therapeutic than any online shopping spree. Learn what tools work for you aside from spending money.
At the end of the day, being frugal is tough, but often times it’s necessary. The only advice I can give to you based on my own personal experience is that balance is so freaking important. You’re allowed to be frugal and still buy yourself a new bathing suit. You’re allowed to be frugal and still pick up a coffee on the way into work. No one can say you’re not good at saving frugally just because you spend lavishly in other ways. We’re all built to live our financial lives however the hell we want to. And that’s the way it should be, honey.
Would you consider yourself to be frugal? Let me know in the comments!