Unhealthy Frugality Disease

Investor Mindset

Unhealthy Frugality Disease

Julie MarquezPro Member

Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

Blame it on the holidays, consumerism season, or the purchase of my latest rehab project, but I've been thinking a lot about my relationship with spending money. I have this unhealthy relationship with healthy money management. It probably stems from the fact that my real estate investor parents are very frugal, and I grew up sorting our garbage into burnables and non-burnables, saving everything, and never spending money unless it were heavily discounted or a tremendous value (hello all you can eat buffets). Then I found mint.com about five years ago and started diligently tracking my personal spending habits. This tool is a great resource to budget and save, and it helped me to save up for a new car and then buy an investment property.

But what isn't cool is my determination to save all my money, and this little internal goal of mine to spend as little money as possible. Having the idea that I have to save everything puts me in a lot of despair at times; like when I had to shell out $100 for a (worthless) doctor appointment and $100 for a flat tire.

I'm not even a poor person. I make enough money from my job to save about $2000 a month; but I have created this mentality that if I'm not saving $2000 or more, then I'm losing money. But this terrible disease about NOT spending money ruins me when I HAVE to spend a little money. Some say it's just the cost of life. I say that I need to change my mentality so I don't get all crotchety when the fact of the matter arises.

So there's my broken, little, money heart on the line. I need a new view on my money and to understand it's power and joy, and to not get so hurt about parting with it. Do any other real estate investors suffer from unhealthy frugality and how to I transform my relationship with spending money? Thanks friends!

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Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes

9y

People put way too much emphasis on money. Just because its easy to count doesnt mean its the only way to track your life. What is far far more valuable and non renewable is time. To me money is a way to get better experience with my time. I have a certain number of days on the planet. Money allow me to spend them more in the way I want to and less in the way I dont. Thats it. If I buy a nice house to live in, my time is more enjoyable than if I am homeless. If I drive a BMW, my time in the car is more fun than in a Honda. If I travel, its experiences that enrich my life. If I help people, it gives me satisfaction of doing some good. If I didnt spend the money, I would have none of that and would have wasted my time. Which is far more terrifying to me than losing money.

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
9y
Ah, savings...I remember those days and then I had kids...
6 Reply
Andrey Y.
Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Julie Marquez:

Blame it on the holidays, consumerism season, or the purchase of my latest rehab project, but I've been thinking a lot about my relationship with spending money. I have this unhealthy relationship with healthy money management. It probably stems from the fact that my real estate investor parents are very frugal, and I grew up sorting our garbage into burnables and non-burnables, saving everything, and never spending money unless it were heavily discounted or a tremendous value (hello all you can eat buffets). Then I found mint.com about five years ago and started diligently tracking my personal spending habits. This tool is a great resource to budget and save, and it helped me to save up for a new car and then buy an investment property.
But what isn't cool is my determination to save all my money, and this little internal goal of mine to spend as little money as possible. Having the idea that I have to save everything puts me in a lot of despair at times; like when I had to shell out $100 for a (worthless) doctor appointment and $100 for a flat tire.
I'm not even a poor person. I make enough money from my job to save about $2000 a month; but I have created this mentality that if I'm not saving $2000 or more, then I'm losing money. But this terrible disease about NOT spending money ruins me when I HAVE to spend a little money. Some say it's just the cost of life. I say that I need to change my mentality so I don't get all crotchety when the fact of the matter arises.
So there's my broken, little, money heart on the line. I need a new view on my money and to understand it's power and joy, and to not get so hurt about parting with it. Do any other real estate investors suffer from unhealthy frugality and how to I transform my relationship with spending money? Thanks friends!
That is not a way to live life. This just puts scarcity into your mind. Honestly, you cannot shrink your way to wealth.
What you have an income problem, not a saving problem.
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James Phillips
Developer · Eugene, OR · Member since 2016 · 54 posts · 30 votes
9y
Julie,
At least your totally honest about your frugality. Thanks for sharing. While we don't want to be foolish with our money and spend it on frivolous things or just outright waste it, we do want to spend it as wise investors. The whole concept in the book Rich Dad Poor Dad is that we forego useless things (liabilities) and buy things that pay us (assets). You've likely never heard of someone becoming wealthy just by saving money.
My parents were overboard I think. I constantly and without ceasing heard things like "Turn those lights off!" or "I want to see a five minute shower or less" or "turn that damn heat down!" The ridiculous thing about this is that to save pennies on the dollar, we lived in a totally dark, ice cold house. Thats just stupid I'm my mind. I think we must find a balance in our financial lives. Yes, a blanket works great but when it's 32 degrees outside and you can see your breath inside your house then its time to turn on the furnace. Anything else is foolish.
Good luck in finding what works well for you!
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Mikki Kline unless your a pilot and have experienced the gift of flight.. Scared the bejesus out of yourself a few times it certainly not something most would understand spending money on.
ON top of it all the US is bar none the great place on the planet to fly.. total freedom save a few restricted airspaces and of course out here in the WEst some pretty large and active MOA's
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James Phillips
Developer · Eugene, OR · Member since 2016 · 54 posts · 30 votes
9y
@Michael Biggs I didn't know that was a real thing, thanks for saving me the $150! :) Here's the concondrum, I am afraid to be poor, but I live like a "poor person" saving my money.
Ah ha, so here is the root of the frugality. It's this simple, we either live in fear or we don't. Some live in fear of having no money but then they get money and live in fear of losing all of it. There is freedom from fear! Send me an email if you want to know what I did to stop living in fear of things!
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Jim Wagoner
Investor · Hinsdale, IL · Member since 2016 · 21 posts · 12 votes
9y
Hi @Julie Marquez.
Interesting thread. I know a few people like this, they are experts at how to save, but very poor at spending. I used to be a bit like that, until I realized I was really just "collecting money". Once I set specific dollar amount goals, which had a specific purchase target, I have been much happier. Take retirement for example. I set a very specific goal, and I have a checkpoint to that goal every year. If I am behind schedule, I tighten up, look for better investments, and get back on track. But here is the kicker. If I am ahead of schedule, I spend down so that I can get back to plan. I may take an extra trip, donate to charity, or give the kids a cash gift. This way, I feel I am both a saver and a spender, in healthy amounts.
Here's a final analogy I use. If you are shooting an arrow, and miss the target low, you raise up the next shot. If you miss high, you don't go higher, you go lower to hit the target.
Of course, targets can change. I may be raising my retirement target, in light of potential changes in tax, SS, and medicare policies.
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Mark S.Pro Member
Rental Property Investor · KY · Member since 2013 · 1k+ posts · 538 votes
9y
@Julie Marquez, I struggle with this at times (see my recent post on Pet Insurance). One thing I've done over the years is come up with savings/investment goals, strive to achieve those, and then simply track expenses (versus the traditional "budgeting") just to be sure my spending isn't totally out of whack. Otherwise, I'd drive myself CRAZY. I know people that are far worse than me about being frugal. I try to find a balance: set savings/investment goals, track expenses, give myself an "okay" to spend on things that are important to me (as long as goals are met), cut back on things that aren't important to me.
One of my biggest pet peeves is feeling like I've been ripped off for something - no joke, I actually called my TV provider one-time over $.01 because they said the tech coming out was no charge and then they billed my account for it and credited back all but a penny. Yes, my time is worth much more than the phone call I made, but it was the feeling of getting taken. There are other, better examples over larger dollar amounts, but this just provides a point. Goodluck.
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Erik Kubec
Real Estate Investor · Denver, CO · Member since 2012 · 83 posts · 17 votes
9y
i have tried to cultivate both 'poles' of spending/not spending money. When I did some rehab after turnover in a property, I looked for the most frugal ways: refit and patch doors vs buying new ones. When I buy shoes for my kids I scour the internet and stores for the best combo of quality and price, and then buy multiple pairs. When I bought some new soccer shoes for myself--soccer being a huge life long passion of mine--I tries on 10 pair without looking at the price tag. When I found the pair I wanted, there was no price tag. I just gave the clerk the shoes and my card and asked 'how much did I just spend?'
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Craig Garrow
Real Estate Broker · Malone, NY · Member since 2013 · 345 posts · 70 votes
9y
As a fellow @GrantCardone student, I will second the notion of focusing on increasing income rather than cutting expenses. I would also say that being frugal is better than being cheap. While I've tried to really cut any "unnecessary" or "stupid" spending, I will spend (invest) any amount of money that makes sense when it comes to growing my businesses. That being said, like most people, Santa Claus has robbed me blind this season, but the way I look at it is that it's one of the reasons to grind and put the hours in; to be able to take care of my friends and family and not have to worry about the money I spend in doing so!
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Tek Chai
Podunk, WA · Member since 2015 · 109 posts · 30 votes
9y
While I at Cherry Creek Mall in Denver, CO, I love going "window shopping" and trying out $200-300 Prada or RayBan polarized sunglasses. I've asked myself, should I splurge on these "overpriced items" (depending on one's interpretation), as my Christmas gift? Or should I go to Walgreens, Riteaid or even Dollar Stores and buy those cheap (almost disposable) sunglasses. It's all in the mindset.
With the convenience of internet, one could be a smart shopper and buy any items for the best values. Smart shopping, frugality and not being wasteful are my life's mantras. Frugality is good, being "stingy" may not. I do use TopCashBack and earn cash while shopping online on airline/hotel and other online purchases to get the best value for my hard earn dollar.

@Julie Marquez, this book may be a great book in changing one's mindset, "Secrets of the Millionaire Mind Mastering the Inner Game of Wealth By Eker, T. Harv. Instead of buying, you can always borrow from your local King Country Library System aka KCLS.org .
Eker T. Harv at times do offer a complimentary 3-day boot camp in the Seattle area. Check out: http://www.millionairemindevents.com/. However, you do not have to purchase their programs not that you're being "cheap".
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y
I hear ya @Julie Marquez. I am Mr Scorched Earth Budget and I walk the talk.
I recently graduated from 'frugal on steroids' to just 'tightwad'. But I'm getting better. I hired contractors and stuff to the tune of over $20k last year on my b&h's. Really weird for me!
What I've done is put together not a saving budget, but a blow money envelope! Yes, train yourself to blow $100 a month, then $200. Mine is getting up there where I deposit finally if over a few grand, but it has helped a lot. It is your job to spend that money ON NOTHING!
As a goal setter and goal achiever, I hope you achieve this goal. Next time someone moves in or pays rent with cash, keep a stash just for you. Take yourself to lunch. Doesn't have to be huge. Take $20 to the dollar store and buy candy cheap glasses or trinkets or whatever. It will be fun and it will exercise your spending muscle. Happy holidays, ya'll!
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Mark S.Pro Member
Rental Property Investor · KY · Member since 2013 · 1k+ posts · 538 votes
9y
Tek Chai , that is probably my favorite book of all time. EXCELLENT read. I highly recommend it to anyone wanting to change their "financial blueprint." It's been years since I've read it. I think it's time for me to re-read it and "get my mind right."
1 Reply
Zak Parks
Rental Property Investor · Jacksonville, FL · Member since 2016 · 91 posts · 70 votes
9y
Julie Marquez awesome thread and all too relatable, as I check mint on my phone way too religiously. I still have a lot of work to do in changing my mindset on spending, but adding budgets on mint for things like going out and taking vacations has helped me to enjoy more experiences and socialization since I almost feel like I need to do it if my budget allocates for it(dumb I know, but totally mental for me). Despite this forced spending, I'm still able to save more than 50% of my income since frugality disease has helped keep my necessary living expenses so low.
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Ruth Bayang
Investor · Kent, WA · Member since 2015 · 624 posts · 274 votes
9y
@Julie Marquez Have you considered getting coaching on that? Money well spent in my opinion.
EVERYONE has a money story (what you learned from parents, experiences growing up... it planted a subconscious seed). It serves us in some ways and hinders us in others.
I know many people who have undergone this type of coaching and seen their income grow.
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Jon Q.
Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
9y
Originally posted by @Julie Marquez:
Blame it on the holidays, consumerism season, or the purchase of my latest rehab project, but I've been thinking a lot about my relationship with spending money. I have this unhealthy relationship with healthy money management. It probably stems from the fact that my real estate investor parents are very frugal, and I grew up sorting our garbage into burnables and non-burnables, saving everything, and never spending money unless it were heavily discounted or a tremendous value (hello all you can eat buffets). Then I found mint.com about five years ago and started diligently tracking my personal spending habits. This tool is a great resource to budget and save, and it helped me to save up for a new car and then buy an investment property.
But what isn't cool is my determination to save all my money, and this little internal goal of mine to spend as little money as possible. Having the idea that I have to save everything puts me in a lot of despair at times; like when I had to shell out $100 for a (worthless) doctor appointment and $100 for a flat tire.
I'm not even a poor person. I make enough money from my job to save about $2000 a month; but I have created this mentality that if I'm not saving $2000 or more, then I'm losing money. But this terrible disease about NOT spending money ruins me when I HAVE to spend a little money. Some say it's just the cost of life. I say that I need to change my mentality so I don't get all crotchety when the fact of the matter arises.
So there's my broken, little, money heart on the line. I need a new view on my money and to understand it's power and joy, and to not get so hurt about parting with it. Do any other real estate investors suffer from unhealthy frugality and how to I transform my relationship with spending money? Thanks friends!
I'm fortunate in my life two have one side of my family (fathers side) with money. They own apartment buildings in a major city, but not very educated...nor happy. They are also stingy. On my mothers side, they are highly educated, but not concerned with money and little financial discipline. But they treat people well and are more happy.
So, I was fortunate to see two ways of approaching money and financial management. I've tried to strike a balance. Money is not in itself important, but a health relationship / balance of the flow of money (giving and receiving) can provide you financial stability, freedom, experiences which is important. The focus should be on creating/providing value and being of service and charging for that, not money in itself.
“In short, the way to wealth, if you desire it, is as plain as the way to market. It depends chiefly on two words: industry and frugality. Waste neither time nor money, but make the best use of both. He that gets all he can honestly, and saves all he can, will certainly become rich.”
-Ben Franklin
Do (1) I need it or do (2) I want it?
If (1), buy it. If (2), how much happiness will it provide. If high and feel it's good value, buy it. If low or don't think it's good value pass on it.
As Ben Franklin mentions, IT IS NOT about not spending money, it's about being efficient with your money. Waste is a sin. Avoid in in all ways.
No matter how rich I get, I will apply this rule. If I ever feel that I'm not balancing my spending habits (being overly prudent), I go on a vacation, get a massage, or pamper myself in another way. Money is meant to flow in your life, not to be hoarded.
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Karen O.
NYC, NY · Member since 2016 · 619 posts · 456 votes
9y
I really enjoyed this thread.
I don't know if this will make a difference for you, but rather than looking to save every dollar, plan to spend a set dollar.
With my biweekly wages, once I figure what my net take home will be each yr, I round it down. Usually to a # that ends in 00. Then every $ over that goes to savings. I can spend all I want or need. And the savings can be tapped for investment, home improvement or emergencies. If the net after savings builds up, I make a one time addition to savings, a larger than needed payment to debt (heloc or mtge) or a charitable gift. If it gets a little low, I cut back on some things (dinners out or shoes) until it gets back to a balance I'm comfortable with.
This works for me because I find if I'm depriving myself for too long I get cranky. And the savings was there when I finally got a good price for a new fence, found an end of season deal on a new storage shed and was helpful when a sick relative needed some assistance.
In short, stuff happens. Being able not to stress too much when it does is priceless.
Good luck finding your happy place.
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Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
9y
I am not *super* frugal, but you would be hard pressed to find anything in my house that wasn't bought on sale. I have the mentality that saving is a job, and I should be rewarded for a job well done. So I would set a savings goal that is a little lower than you are currently doing, say $1750. Anything over that each month goes into a special account as a bonus to myself, maybe for a vacation.
You have to enjoy the fruits of you labor somehow. For me it is vacations and life experiences.
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Julie MarquezPro Member
OP
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
9y
@Mike Dymski We are expecting our first child in February, and then I will look back at this conversation and laugh at my "dilemma."
@Andrey Y. Income problem?!? Now I have to worry about making more money? Get a promotion and a raise at work? I'm saving up for an investment property, hoping that will increase my income.
@James Phillips Thanks James, I definitely don't want to end up that extreme, so I'm working on finding my balance. Oh no, the fear of being poor, that might be the root of my obsession!
@Jim Wagoner "Collecting money" doesn't sound like much fun or very useful, when you put it that way. I think I need to relax on my saving goal and allow myself to enjoy the extra. Hmm, so when you are ahead, you don't feel bad not putting that extra money into your retirement and then you can enjoy giving it or spending it. I want that.
@Mark S. I need to allow myself more okays on spending, I actually can afford it if I get rid of my scarcity mentality. I get that $.01 thing. Some of these recent charges that made me so mad were because I felt ripped off, and more of the principle of it all. I want a good value and don't want people to take advantage of my money.
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Julie MarquezPro Member
OP
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
9y
@Erik Kubec So how much where your soccer shoes? And were you completely okay with what you spent after the fact? I love how we all have our priorities that directly our money and you can be both ways about it.
@Craig Garrow I am open to spending my money to make money, but it's limiting with my scarcity mentality. I need to check out more of Grant's stuff. I hope Santa made a lot of happy people this season!
@Tek Chai Thanks for the recommendation, I'll check out that author and book. And yes, I'll probably borrow it from the library!
@Steve Vaughan You are on to something, I need to allow myself to start spending. That actually sounds like some fun when I make it okay with myself. Maybe I'll do buy some nice stuff for my husband and me!
@Zak Parks I'm going into my account to make some vacation, gifts, and spend money budget line items! Yes, if my budget allows me to spend, then I will feel liberated to go out to spend. Thanks for the suggestions!
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
9y
@Julie Marquez , I read through this thread and enjoyed the different perspectives.
I read MMM - he inspired our journey to financial freedom. It never occured to us that we could retire early - like in our 40s - until we started reading his blog. We took information from him, and read about the 4% rule, and my husband just stepped down to part time.
You can always spend it later.
We keep track of our spending, and treat it like a game. How little can we spend this month? We save on things that don't matter, so we can spend where we want.
I see nothing wrong with your plans.
Congratulations on your February baby. (I could not have lived without my Moby Wrap, Ergo Carrier, or Baby Legs.)
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Julie MarquezPro Member
OP
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
9y
@Ruth Bayang Thanks for the suggestion! I'm interested and will look into it.
@Jon Q. I like what you say: It's not the money itself, but the flow of money; and that providing value is more important than the money itself. Much better focus. Using money to provide value and gain value, that helps me with my perspective. Thanks!
@Karen O. I am a planner, I need that plan to spend, and I like the way you have it set up. Thanks you for the suggestions!
@Brie Schmidt A girls gotta love a good sale! Yes, I think I need to lower my saving goal to be more realistic and help with my newly formed vacation and spending budgets.
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Julie MarquezPro Member
OP
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
9y
@Mindy Jensen Frugality really changes people's lives, and I want to be my own version of "financially free" too, hence why I save so much. I go crazy with my game of how little can I spend, especially when it goes the other way out of my control (like we were really hungry and spent too much on groceries last month). But it also keeps my savings account big and ready for that next investment (which will give me more financial freedom that I am looking for).
I am super excited for the baby carriers, especially my husband who just wants to carry the baby around all day! Thanks!
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James E.
Investor · Boston, MA · Member since 2014 · 232 posts · 165 votes
9y
@Julie Marquez very interesting discussion you've started (clearly resonating with lots of us!)
I look at frugality as a sliding scale. If I have 100 units of energy for decision making / will power, how many units do I want to spend on saving money vs. earning more money?
I think there's a diminishing marginal return with saving... I'm a mint user too, and have realized that if I'm saving money on living expenses, eating out, and big one-off expenses, that's going to be 80% of my budget but only 20% of my decision energy. I could use more energy units to clip coupons, or drive two miles to the dollar store to get lysol wipes for $1 vs. getting them at cvs around the corner for $2, but again, there's a diminishing marginal return with using more energy on things like this.
Another way I look at it... figure out what it is in life that you value, or, what are you saving all of this money for? What would you do if you had a billion dollars? Then be willing to let some of it go and trade for things that you value (in your case this might be your health?) For me, it's travel and new experiences.
Good luck to you and everyone commenting here, and I hope we all find a good balance between saving, investing (in our businesses and our lives), spending, and living.
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Sarah D.
San Diego, CA · Member since 2015 · 273 posts · 226 votes
9y
@Julie Marquez Congrats the the baby! And I second the carriers; my 5 year old still wants to be on my back in an ergo :). In my experience balancing out financial goals and life goals became much easier and more tangible once we had kids. At the very least you'll be WAY too tired to worry about that $100 you could have saved.
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Julie MarquezPro Member
OP
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
9y
@James E. Thanks for the feedback! I hear you say that money should be freeing, not all energy consuming. I understand convenience too, and I will pay for that. I'm saving for a downpayment for the next investment, in hopes of becoming more free with my spending in the future. I'm just stuck right now.
@Sarah D. I think my money mindset and everything is going to totally change in a couple of months! I'm looking forward to the new priorities and new focus, though not the sleep deprivation.
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