We spend a lot of time talking on this blog about ways to save money, stay out of debt and live frugally. Living within your means is important, but it’s also good to have some balance in your life.
Over at Personal Finance Advice, guest writer Rebecka O. delves into the issue of excessive saving. In her article “Why I Don’t Save Money,” Rebecka shares a story about her mother who died with more than $1.5 million in savings—along with unfulfilled dreams of visiting Europe, attending a Broadway show, gazing at the Pacific Ocean and seeing penguins in the wild.
Rebecka says that her mother lived frugally and that she herself shared those frugal tendencies until her mother’s death, at which point she came to question the value of saving money if it meant missing out on longed-for experiences. So Rebecka devoted herself to fulfilling her most important lifelong dreams. In about six years, she blew through her entire share of the inheritance—about $300,000.
The responses by readers to Rebecka’s story are interesting in their own right. Some people questioned whether Rebecka should have spent the entire inheritance. Other readers were okay with her spending the inheritance but criticized her choice of even delving into retirement savings to fund her goal of fulfilling all her dreams. Several readers suggested that Rebecka should have sought some balance or moderation, splurging on some dreams while saving some of the inheritance.
[One reader of Rebecka’s post,] Pat Merritt[, shared] a nice story about [her] own experiences with saving and the satisfaction she has received from spending [those savings] on time with her family and a special artwork purchase. Here is an excerpt from Pat’s comment:
“You see, frugality is not just saving for retirement or a nebulous future that may not come. It’s also getting the things that you really want now. It’s a decision-making mechanism that lets you decide what is important to you and to set out and get the things that really matter.”
Do you agree with Pat’s definition of frugality? Do you try to minimize expenses in order to save the most possible money—either for a rainy day or to build an estate for your family? Or do you believe that money should be used sooner rather than later to fulfill your most important dreams? Or is some compromise path the best?