Being Frugal: Good Self-Care or Too Emotionally Expensive?

Being frugal can either enhance or undermine our well-being. Depending on why we do it and how we do it, being frugal may or may not help us to feel good.

Let’s see how this plays out with an imaginary client, Franklin:

Franklin: My wife tells me I’m being too frugal. She says I’m too tight with money. Do you think I am?  I mean, do I go too far with it?

Gary: Well, what do you want to be frugal for? What’s your goal?

Franklin: I just don’t want to run out of money. I feel responsible for our family’s financial well-being, and I don’t want to let them down. That’s my nightmare. As you know, we didn’t have much money when I was growing up.

Gary: Yeah, but what makes you think you’re going to run out of money? You just got a raise and you told me a couple of weeks ago that you’ve already saved a fair amount of money.

Franklin: Either one of us could lose our job. I want to be realistic. I also just think it’s good discipline. It’s the right thing to do. I don’t want to spoil my kids. I also don’t want them to be materialistic. Besides, I don’t like going out all the time or buying lots of things. I like it simple. I feel better that way. You know I’ve been trying to do mindfulness meditation.  Besides, you know she and I have had our troubles. I can’t be sure she’s going to stick around, and I want to have some security.

Gary: So, it sounds like you’re telling me that you want to save money so that you’ll feel better and because it’s the right thing to do.

Franklin: Yes.

Gary: That all makes sense, but you also talked about you holding stuff back from your wife when you’re angry at her.

Franklin: Yeah, well, maybe that’s in the mix, too. But why buy another set of towels when we could send $100 for relief to Haiti?

Franklin did want to donate money. And he actually did–occasionally. But he was usually too scared to do it.

Remembering Why You Save Money

Franklin gives four common reasons for being frugal. As you can probably tell, he wasn’t really sure exactly why he didn’t like spending money. But he was trying to understand it. And that’s an important step in making frugality work for us rather than against us.

One danger is that frugality spreads into a broader scarcity mindset, which affects how we approach everything, not just money; from whether we “give” compliments to how we “spend” our time.

In this post we’ll explore the pros and cons of being frugal in terms of four common motivations and well-being. I’ll emphasize motivation because if we forget why we’re saving money, frugality becomes an end in itself rather than a means to an end. It no longer leads to a greater sense of well-being, but rather to greater anxiety.

1.    Practical Security: Providing for ourselves and others

PROS

There’s lots of research out there about money and happiness. It’s contradictory and confusing because the studies often measure different things. But let’s cut to the chase: being frugal so that you have savings does prepare you for catastrophes and can reduce anxiety.  Providing security for yourself or your family feels good.

Interestingly, saving money seems to produce a greater sense of well-being than earning more money.

And what you do with that money may or may not help. Spending money on things is less satisfying than spending money on experiences, such as going to dinner, to shows, or on vacation.

Another type of experience that enhances our happiness is generosity.  The benefits of generosity are well-documented. It activates a neural reward system which makes us feel good when we give.

So, if being frugal helps you to save money to have a safety net, spend on special experiences, or give to others, it will increase your sense of well-being.

CONS

But simply packing away more money out of a compulsive habit won’t increase your sense of well-being.

There seems to be a limit to how much money can make us feel better.  People generally think that more money leads to more happiness, so they try to earn more and save more money.  But some research suggests that more money doesn’t necessarily lead to more happiness.

It’s beyond my purview to tell you just how much money you need.  But as a psychotherapist I can tell you that most people who are obsessive-compulsive tend to err on the side of caution. They try to control outcomes rather than rely on their resilience and ability to deal with change as it happens.

I can also tell you that if you spend too much of your time trying to make more money, it probably won’t help. Researchers in one study found that “the students who prioritized money ended up less happy a year after graduation, compared to their classmates who chose to prioritize time. The results remained the same even after controlling for their happiness before graduation and accounting for their various socioeconomic backgrounds.”

So if your motivation for being frugal is to have some financial security and to have some money to spend on experiences, it may work for you. But if you spend too much of your time trying to make more money, it probably won’t.

FRANKLIN

Franklin had both positive and negative results in regard to this practical motivation.  He had set himself and his family up for the possibility of being relatively free from anxiety about money. But it had become a habit and he didn’t know where to draw the line. He wanted to be generous with the money he saved, and to enjoy using it mindfully, but he clung to it out of insecurity. He had not achieved the sense of security he sought from it.

2. Financial Independence and Relational Security

PROS

Being financially independent can actually set you up for a good relationship. Not having to depend on or take care of your partner financially can take stress off of the relationship and allow you to focus on the quality of the relationship without worrying about your financial security if the relationship goes bad. If being frugal helps the relationship that way, it’s a double gain. No-one is wondering if they are really loved or just used for financial security.

CONS

But people sometimes try to use money as a substitute for close relationships.  People with insecure attachment don’t feel certain that their connections with other people are dependable.

Money may feel more dependable to them. Understandably, if their caretakers were not dependable when they were young, they might feel the need to find more trustworthy “figures” to rely on as they become adults. Enter money and frugality.

But this substitution of money for relationships doesn’t increase our sense of well-being. Even introverts need good relationships. The hit of oxytocin we get from a good hug shows that we’re actually wired for connection.

FRANKLIN

One of Franklin’s motivations for frugality was to hedge his bets for emotional security rather than invest more fully in his connection with his wife. She could feel that he was holding back not just money but emotional commitment as well. At times she wanted to spend money to make up for that.

It wasn’t just about the towels.

3.      Psychological Well-Being: Living a simpler life and consuming less to be more content

PROS

Frugality is one aspect of the simplicity or minimalist movement, in which people spend very thoughtfully, and only on the things that they really value so that they can cultivate a more peaceful mindset.

Consciously cultivating that which has meaning, letting go of unnecessary attachments, and consuming less all can lead to a greater sense of well-being.

CONS

But this too can backfire. If the motives aren’t really about becoming more centered and balanced, and if your motivations are really to avoid feelings of insecurity or shame, it can lead to a sort of financial anorexia. It becomes addictive because it doesn’t address emotional issues.

Once the addiction gets going, it’s hard to stop. You need more and more of the hit of frugality to feel good even momentarily.

FRANKLIN

Franklin did want to feel more peaceful. But he had so many other motives for his frugality that not spending didn’t lead to a greater sense of well-being. It hid the insecurity, shame and anger that also motivated him.

4.      Conscientiousness: Doing the Right Thing

PROS

People with compulsive tendencies tend to be quite conscientious. They obsess about doing the morally right thing and not getting in trouble.  This can motivate them to be frugal.

And that’s not all bad. According to research, conscientiousness leads to success with life satisfaction, affect, income and wealth.

CONS

But, being over-conscientious—which compulsives often do–can get in the way of well-being. Too often conscientiousness becomes an attempt to prove that they’re good people and to escape a sense of shame, rather than just wanting to do the right thing. When that happens, there’s no end to how over-conscientious they can get since it doesn’t solve the core issue.

Because being over-conscientious about finances can block good self-care and close relationships, well-being becomes hard to achieve. Instead of loosening up, we become tighter and tighter. We can even become masochistic.

Sometimes we want to make it look like we’re being conscientious when really our motivation is to punish others for what we consider indulgent behavior.  As if to teach them a lesson, even though they aren’t our students. It may be presented as doing the “right thing,” but it’s often more an act of judgement, resentment or envy.

To sort this out we need to ask whether it’s our responsibility to be the policeman or teacher in this particular situation.

FRANKLIN

Franklin was trying to do the right thing for himself and his kids by teaching them to be mindful of gross consumption. In this way his conscientious frugality served all of them well.

But when it meant they couldn’t buy healthier food, have a fun birthday party, or take a much-needed vacation, it did them more harm them good. His kids compensated with indulgences the minute they could get away with it.

Worse, because it was infecting his entire personality, his kids experienced him as someone who was never really happy.

Franklin also tightened the purse strings to punish his wife when he was mad at her for things she did or did not do.  This was briefly gratifying, but ultimately it eroded the very relationship he said he treasured.

The Habit of Holding On: It’s Not Just About the Money

Being frugal is just one manifestation of holding on, a primal, deeply wired behavior. It’s indispensable for infants to survive and for adults to live responsibly.

But as an overarching and habitual life strategy it’s too limiting. The more adamantly frugality is practiced, the more it affects areas of life other than money. Deepening a scarcity mindset, we then cling to outdated ideas, withhold affection, and become desperate about our lack of time.

If frugality becomes generalized, we may lose our happiness, relationships, sense of community, or generosity. And then being frugal becomes very expensive.

For more ideas about using compulsive tendencies in a healthier and more satisfying way, read The Healthy Compulsive: Healing Obsessive-Compulsive Personality Disorder and Taking the Wheel of the Driven Personality.