Oct. 21: BEST FROM THE BLOGOSPHERE

October 21, 2024

Can there really be too much frugality?

All of us are looking for ways to get things for less. Thanks to a tip from a line dancing pal we were able to find a speaker we can use at dance class on for half price at a discount centre 30 minutes south of us.

We look for bargains, use coupons and get discounts – but can the frugality thing be taken too far?

Writing for CTV News, Christopher Liew says yes.

“While there’s nothing wrong with being frugal, there’s a darker side when saving becomes an obsession. Being overly frugal can negatively impact mental health, relationships, and your overall quality of life,” he warns.

“If you’re like most, you’ve no doubt experienced inflated grocery costs, rental rates, fuel expenses, and more,” he continues. “In fact, 69 per cent of Canadians reported that they were concerned about their ability to absorb an unexpected expense of $1,000 or more, according to a recent study by survey giant Ipsos.”

Liew’s list of “the best ways to be frugal” includes:

•  Using coupons when shopping for groceries
•  Cooking at home instead of eating out
•  Cutting back on entertainment spending
•  Decreasing streaming subscriptions
•  Thrifting instead of buying new items

Such steps can save you “hundreds of dollars per month, which is money you can put towards bills, saving for retirement, or simply building your emergency savings fund,” he explains.

So when does frugality become a negative? Liew explains it well.

“Unfortunately, almost all good things can become negative when taken to the point of obsession or excess – including frugality,” he writes. He cites a recent poll by Dialogue (partnering with Environics) that found that 28 per cent of us are “struggling in daily life” due to financial stress, while 27 per cent “are seeing their work suffer” because of it.

That can lead to “the concept of loss aversion in behavioural economics, where the fear of losing money outweighs the pleasure of gaining it,” the article continues. “This anxiety can lead individuals to adopt overly frugal habits, which may cause them to hoard savings rather than spend on necessary or enjoyable experiences.”

What are some signs to watch out for?

Liew says excessive frugality can lead to “strained relationships… constantly refusing social outings or being overly concerned about every expense can lead to conflicts and feelings of resentment.”

You also miss out on good experiences, he writes. “Avoiding spending money on activities like travel, dining out, or cultural events can limit personal growth and enjoyment of life,” warns Liew.

There are also health risks by those who don’t want to spend more for better food, or a gym membership. “Cutting corners on your health can lead to even more financial problems later in life,” the article notes.

Liew’s prescription for more healthy frugality involves having more flexible budgets, setting spending priorities, and – if it still isn’t working out – getting professional financial advice.

His final tip is to “automate” your savings – rather than having to remember to save each month, or payday, use technology to do it for you, through pre-authorized contributions to your savings plan.

The Saskatchewan Pension Plan is a flexible partner when it comes to setting up your retirement savings. You can set up pre-authorized contributions from your bank account that can, for example, coincide with your paydays. Money gets popped into your SPP before you even notice it; you are paying your future self first. Alternatively, you can set up SPP as a “bill” via online banking and contribute that way. You can even make contributions online via a credit card!

Get SPP working for you!

Join the Wealthcare Revolution – follow SPP on Facebook!

CTV News

---

---