6 Signs That You’re Too Frugal

Introduction

So you buy things used and you know 52 ways to eat at restaurants for less. Who doesn’t like to save money, right? But are you sometimes too frugal?

Your unusual ways to save money don’t make you a total cheapskate. That’s just creativity. And although you feel inspired by examples of extreme frugality you’ll probably keep using toilet paper despite its cost, right? So you’re fine.

Or are you?

Research on “tightwads” (the actual scientific term used by researchers) shows that frugality can be addictive. And addiction can lead to unhealthy behavior. So go ahead and save money, but also watch yourself for the following six signs that you may be too frugal.

1. You Start to Cross Ethical Lines

Do you find yourself doing things you used to consider unethical, just to save a buck?

A recent poll found that about a third of Americans think it’s okay to illegally access movies and music using other people’s online accounts. Did they always think it was okay or did the prospect of saving money cause them to blur the line? Where are the lines for you?

It’s easy to rationalize our behavior. For example, I sneak food and water into movies. I simply won’t pay $6.50 for popcorn or $4.75 for a bottle of water, so if I’m going to go at all it’s with my own supplies. I figure that means the theater owner at least gets the ticket price rather than nothing, so it’s okay.

And you know what? I never feel guilty about that. But when I discovered that I could basically steal a dollar from the theater owner by sneakily buying a senior ticket at the automated kiosk, I felt bad. That crosses the line.

Call it the “guilt test.” Do you do things to save money that make you feel guilty?

2. You Buy Too Much in the Name of Frugality

Do you have a lot of unused things that you bought to “save money?”

Kit Yarrow, head of the psychology department at Golden Gate University, says. “in my research, I’ve found that sale-obsessed shoppers ultimately spend more money than non-sale shoppers.” If the sales are great you can “save” enough money to go broke.

Yarrow suggests you try to remind yourself that whatever the price, you are “spending,” when you buy something. But even if you’re not obsessed with sales it’s easy to buy too much.

For example, it’s reasonable to stock up when things are discounted, yet one study found that grocery shoppers waste more food when they stockpile. Some food isn’t eaten before it expires, and there is a tendency to buy things that aren’t normally eaten just because they’re on sale.

I don’t find waste to be a problem, but when I stock up on snack foods on sale I do eat more, reducing or eliminating any savings. On the other hand, when I stock up during sales on socks or laundry detergent I use the same amount and it all gets used.

In other words, you have to look carefully at your actual patterns of consumption to see where your frugal impulses might be costing you more than they save. And if you’re buying extra freezers and building expensive storage sheds to hold your stockpiles of sale-priced goodies, you might have a problem.

3. You Undervalue Your Time

Are you so focused on saving money that you forget the value of your time?

Consider billionaire Ikea founder Ingvar Kamprad. He buys used clothes at flea markets. Now, unless he really enjoys doing this, can it possibly make sense? If he spent $1 million per day he could hardly dent his $40 billion fortune in his lifetime, so how could saving a few dollars matter?

At that level of wealth and income any time spent on frugality seems like a waste of precious time, and time is life. But what about the frugal efforts of those of us who are less wealthy? When are you spending too much time for too little in savings?

One way to analyze your frugal activities is to compare your “savings per hour rate” to your normal wage at work. For example, if you spend two hours weekly clipping and sorting coupons to save $8 on groceries, you’re saving $4 per hour. Even at minimum wage you’d be far better off skipping the clipping and just putting in a little extra time at work.

Of course it’s rarely that simple. Sometimes it’s difficult to calculate how much time your frugal efforts consume. It also matters how much you enjoy what you’re doing. If you hate your job but love organizing cashback credit cards to get the most out of each purchase, you might prefer to do the latter even at a savings rate of half your hourly rate at work.

In any case it makes sense to run the numbers once in awhile. You might discover that some strategy you find to be totally tedious is saving you only a buck-per-hour. Your time is worth more than that, right?

4. You Don’t Account for the Long-Term Cost

Are you a sucker for the cheapest option, even when it isn’t the best long-term value?

I used to buy the cheapest shoes available, thinking I was saving money. Then I did a lot of hiking and I learned just how fast those cheap shoes wear out. In fact, I discovered that my good shoes last about four times as long. So even if I pay triple what the cheapies cost, the “expensive” shoes are cheaper in the long run.

If you really want to experience the cost of buying too cheap, buy hand tools at a dollar store. I’ve broken a dollar-store screwdriver on the first screw.

In theory the math is easy; if a $16 shirt lasts four years it costs $4 per year, so don’t buy the $8 shirt that lasts a year.

Fortunately you don’t have to be precise with the math (and it’s mostly a guess when it comes to longevity of items anyhow). Just buy higher-quality items on sale, when they’re almost as cheap as the low-quality options.

If you find yourself always attracted to the cheapest option, you might be too frugal.

5. You Deny Your Needs and Desires

Do you suffer for the things you’ve given up in the name of frugality?

Psychology Today lists five reasons spending less will make you happier, and a scientific paper titled “The Hedonic Benefits of Thrift” also suggests that spending and consuming less can lead to greater happiness. That’s good news for us penny-pinchers.

On the other hand, being overly frugal can be a sign of OCPD (obsessive compulsive personality disorder), and those with OCPD-related frugality may suffer from their “pervasive miserliness.” That may describe some of the frugal millionaires reported on by the New York Times — like the rich guy who repairs his socks rather than buying new ones.

So while frugally splitting a meal at a restaurant it can be part of a healthy and happy life, forgoing eating out altogether, just to save money, might be a mental problem. After all, what’s the point of frugality if it doesn’t improve your life?

Of course it isn’t easy to say which sacrifices are justified and which are not. I don’t mind having never owned a new car, for example, but I would probably suffer if my wife and I gave up decent hotels in favor of the crappy cheap ones that used to be a regular part of our travels.

Call it the “suffering test.” If you feel nothing after giving up something in the name of frugality, you’re fine. If you suffer, and thinking about the savings isn’t enough to relieve that suffering, it’s possible you’re being too frugal.

6. You Risk Your Health

Are you frugal even when it might negatively affect your health?

The USDA says I need 2,000 to 2,400 calories per day, and a package of Ramen noodles has 380 calories, so six packages daily would fulfil my caloric needs. They’re on sale nearby for 15 cents, so I could live on $27 per month for groceries — if I didn’t mind destroying my health.

Of course even extreme cheapskates wouldn’t try a Ramen-only diet, since it could result in expensive medical care. But whether or not we go to extremes, properly balancing health concerns with our frugalness is not easy.

For example, I have no problem switching dentists to get a “new patient special,” but it’s tougher to decide how long to wait between dental office visits. Since going to a dentist every six-months is an industry standard that’s not based on evidence, I choose to go every nine months. But could I push that to once-per-year?

These decisions would be easier if the evidence was clear, but in general we should probably pay whatever is necessary for a healthy lifestyle.

Finding ways to pay less makes sense, but the ”savings” from simply not having what you need can be lost pretty quickly if you later face extra healthcare costs as a result.

You probably don’t want to become too frugal when it comes to health.

Do your money-saving actions show any of the signs of being too frugal? Tell us about it below, and keep on (wisely) frugaling.

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