money challenge day 5

Money Challenge Day 5: 
Maybe You Don't Spend Enough?
by Noah Clyman, LCSW-R

I’ve focused this blog challenge on over-spenders and I want to take a moment and acknowledge the folks who are compulsive about saving money. Believe it or not, some people save too much. In my counseling practice, I see plenty of people who fall into this category. If making and saving money are good things, then the more the better, right? Well, take the admittedly extreme case of Anne Scheiber, who on a modest income, started saving at a young age, allowing her money to compound in wealth-building investments such as stocks over many years. As a result, she was able to amass $20 million before she passed away at the age of 101.
 
Sheiber lived in a cramped studio apartment and never used her investments. She didn’t even use the interest or dividends–she lived solely on her Social Security benefits and the small pension from her employer. Scheiver was extreme in her frugality and obsessed with her savings. As described by James Glassman in his fascinating book, “The Secret Code of the Superior Investor”, “She had few friends … she was an unhappy person, totally consumed by her securities accounts and her money.”

Most people, myself included, wouldn’t choose to live and save the way that Scheiber did. She saved for the sake of saving: no goal, no plan, no reward for herself. Saving should be a means to an end, not something that makes you mean to end.
 
Even those who are saving for an ultimate goal can become consumed by their saving habits. I see some people pursuing higher-paying jobs and pinching pennies in order to retire early. But sometimes they make too many personal sacrifices today while chasing after some vision of their lives tomorrow. Others get consumed by work and then don’t notice or understand why their families and friends feel neglected. Another problem with seeking to amass wealth is that tomorrow may not come. Even if all goes according to plan, will you know how to be happy when you’re not working if you spend your entire life making money? More importantly, who will be around to share your leisure time? One of the costs of an intense career is time spent away from friends and family. You may realize your goal of retiring early, but you may be putting off too much living today in expectation of living tomorrow.  
 
Do the above passages resonate with you? If so, your resolution can be to practice flexibility with money — pushing the boundaries and allowing yourself to make some unplanned purchases and to splurge from time to time. 
Homework: Reflect on these questions and use the message board to share your reactions: What are the consequences of saving as much as you do? What joys in life do you miss out on? How has your saving negatively impacted those around you? What are some small, specific examples of spending more that would improve your quality of life?