MSN had a great article about “Secret Millionaires: Addicted to savings“. It talks about how compulsive savers whose habits can take a dark turn. Savings can become such an addiction that it’s hard to spend, enjoy, or give away your money.
The author, Brent Kessler calls people “savers”. People who only buy things that are on sale, frugal, and generally financially cautious. Sounds good right? He says there is a negative side to it as well. These savers feel great pain when they see money “foolishly” wasted or spent. Or when their net worth decreases with a bad economy.
He defines savers as people who save 20% of their income, give away less than 3%, and increase your net worth by more than 5% a year. These people, while the savings part is great, the negative is they constantly feel it’s never enough. They constantly feel the need to save more. Kessler calls this a prison.
He suggests that Savers try to break this prison by rewarding themselves. Set aside a set amont and spend 50% ofit on something that brings you pleasure. It could be anything. The other 50% he suggests giving away to a charity. This will warm your heart.
Or perhaps Savers should turn over their accounting to a spouse or bookkeeper. This will remove the Saver from stressful situations. Finally, he says Savers need to figure out how much is enough and be happy with that number. If you reach it then be happy you’ve achieved this goal.
I can definitely understand how people feel obsessive about saving. I do sometimes, but like I’ve mentioned before, it’s why I have to volunteer. So I can appreciate what I have. It’s easy to get wrapped up on what you don’t have and forget what you do.
13 responses so far ↓
1 Kristy // Nov 18, 2008 at 9:25 am
I would be considered to be obsessive. I don’t like to spend money at all. DH and I had his parents babysit the other night (yay! free) and we used a gift certificate for dinner (free) and I still didn’t want to spend money to go see a movie afterwards! We have not been to see a movie since DD was born!
Unfortunately both of us are extreme savers, so I can’t just let him do it. The good news is that I do donate, despite my husbands misgivings (yes, he is that cheap). I consider myself frugal and him cheap.
I do know what it will take to make us happy, or at least me. I need to have a certain amount saved for retirement….it will be a long time until I reach that goal though.
2 Ashley @ Wide Open Wallet // Nov 18, 2008 at 10:39 am
If I lived alone I would be in danger of falling into the dark side of saving. But with a family it’s a lot harder to save because you just can’t micro-manage your life like that. Or it’s harder to anyways.
If I had total control over my own little world. I can see myself going there.
3 LAL // Nov 18, 2008 at 10:40 am
Kristy, you are definitely worse than me. I have no issues enjoying myself. I do however, forget sometimes how much I have. So yes I do donate and volunteer. Because my DH doesn’t like to either.
But while savings is good, it’s not good to be so wrapped up I think. I enjoy money and managing my finances as the blog shows. But if I worried about every penny I spent then how would that make my life enjoyable and worth living?
4 Kristy // Nov 18, 2008 at 11:06 am
LAL, See we have netflix and I just didn’t see the point in spending $20 just to get in to the theater. Although it may have been different if I had heard of any of the movies, LOL! I just don’t pay much attention to that stuff anymore.
We do enjoy spending money on other things, like eating out. It is one thing that I really enjoy doing. And not just McDonalds, we like to go to a nice Italian restaurant or sushi. If only I could get my DD to like sushi….
5 Meg from FruWiki // Nov 18, 2008 at 12:10 pm
“Set aside a set amount and spend 50% of it on something that brings you pleasure.” I couldn’t help but think, “Well, saving seems to bring them pleasure, lol”.
O.k., maybe not helpful. There definitely are people who take it too far, but who knows what “too far” is for anyone. And nowadays, I can appreciate the security of having a large savings account/emergency fund.
As for me, I think I’m pretty balanced. I penny pinch in some areas and spend more in others that mean more to me, but it might be easy for some people to just see one side or the other.
6 Fabulously Broke // Nov 19, 2008 at 12:56 pm
Oh I definitely NOT one of them. Kind of afraid of ever becoming one (but i think with my spending record, I have no fear of that any time soon)
Great post – am going to link this
7 fengshui // Nov 19, 2008 at 8:31 pm
“compulsive savers whose habits can take a dark turn. Savings can become such an addiction that it’s hard to spend, enjoy, or give away your money”
Perfectly describes my MIL. I feel sorry for her. She is incredibly wealthy (net worth in the many millions) and she refused to buy herself a wedding dress when she got remarriedlast year. She has had the same pair of glasses for the past 15 years, because they are “perfectly fine”, and the list goes on and on and on. She won’t spend a dime and keeps saving and saving. No vacations, no new clothes, no cell phone, 15 year old car. She grew up in poverty with 15 brothers and sisters in a 3 bedroom farm house that didn’t even have indoor plumbing until she was 15 years old. I guess that those “survival” times never really left her. It makes me sad because I would really like to see her enjoy things and to travel while she still can.
8 fengshui // Nov 19, 2008 at 8:36 pm
And here I am on the opposite end of the spectrum where the only saving that I do is what is taken out of my check pretax and in a retirement account so I can’t touch it. Otherwise, I spend almost ALL of every check. Bills first, then things for the house, then things for ME…. purse, coat, shoes, laptop, etc…. I’m BAD. I used to be worse. At least I pay cash for everything and don’t use my credit cards. But, I WISH that I could be more like Kristy and LAL. I don’t know how. Perhaps I need an intervention…. LOL
9 LAL // Nov 19, 2008 at 8:56 pm
I admit to not having watched a movie in awhile. But Fengshui, I guarantee you I am no in way, shape, or form a saver. Or barely frugal. Definitely not in Kristy’s league.
I enjoy myself. Right now I just got out of visiting the in-laws at the expense instead of going vacation with them.
Sigh. I am about to blow $2k on a 7-10 day vacation for two. We shall see. Oh well, I take comfort in that tickets to see my in-laws are $650/each, so at least $1300 and to go home to hawaii $1300/each so $2600 minimum for those dates at Christmas. And no mileage seats either for hawaii. Not including dog boarding in either scenario.
We’re getting away at least somewhat cheaper. So frugal? Frugal would be not visiting, and trust me I was praying that would happen. But we’re not frugal so on vacation we go.
10 Kristy // Nov 20, 2008 at 5:16 am
See I don’t consider myself “cheap”, I consider myself frugal. Would I still go on vacation, yes. Do I still get massages, facials, pedicures, yes occasionally. Cheap would be clipping coupons, not tipping, never going anywhere, etc. That is not me. DH and I choose to spend our money on certain things yes. We sometimes opt out of things if we don’t think it is worth it (to us).
I will probably need a new car next year (for me). I consider it frugal and a smart move to buy a used one due to depreciation. To me, that isn’t it cheap, its frugal and a good decision.
Trust me, we still go on vacation. With a young kid and one on the way, it is not as much anymore, but we still go. I am planning one for when the new baby is one. I would go sooner, except that I don’t like to leave babies overnight until they are a year.
We are driving to see my parents, 7 hours, for Christmas. If I were cheap, I wouldn’t go. Flying is not an option, it would take just as long and we would have to switch flights.
We choose to save 20% right off the top, then spend as well please. Yes I still think about purchases and I am always trying to figure our how to cut stuff out of the budget, but I don’t consider myself cheap.
My point is that everyone has things that they want to purchase and that is fine, what is frugal for one is normal for another person, so we really can’t judge.
11 LAL // Nov 20, 2008 at 9:11 am
I wish I could even drive to see the family. Cost effective. But seriously when you have to pay an arm and a leg to see your family it bites at you.
I can understand why people complain about travelling halfway around the world. To get home it takes me minimum on a plane 14 hours. More with connections and that’s if there’s no delays and minimum 2 connections. Usually around 16 hours without tailwind.
Frugal would be never going. Now I no longer visit on the holidays, and only go when I see cheap, ie $700 airfare. Ouch.
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