After years of saving every penny, I made two changes to make it easier to build wealth over time

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The author, Katherine McLaughlin.

Ali Barfield in Wild We Wander

• I’ve loved saving since I was a kid, but it’s become an unhealthy compulsion for me.
• After years of depriving myself, I experienced “frugality fatigue” and went on a spending spree.
• I added fun expenses and a weekly reward to my budget so I wouldn’t feel deprived.

The first time I created a savings plan, I was 8 years old.

I wanted an iPod Shuffle. It cost me $100 to buy it, so I saved up my $5 allowance every week until I finally had that magic amount. I still remember the day my dad took me to Best Buy and I emptied my entire piggy bank—one $5 bill at a time—at the checkout and walked away with my new iPod.

This experience shaped the way I managed my money for years to come. Having control over my money was exciting, and I loved the idea of ​​being able to save and budget to get what I wanted. As I grew older and earned more money, being a “saver” became part of my identity.

But over time, being frugal became a compulsion. It was almost like a game with myself: how much could I realistically spend and still have what I needed? I was always looking for the cheapest option, never bought anything “just for the fun of it,” rarely ate out, and often missed events with friends simply because I didn’t want to spend the money to attend. While frugality is certainly not a bad quality, I took it to such an extreme that I wasn’t enjoying the benefits of the money I was earning.

I no longer controlled money: I let it control me.

Weariness of frugality led to excessive spending

I realized I was suffering from “frugality fatigue.” This is a term used by some sociologists to describe budget exhaustion. It’s basically being so frugal for so long that it becomes too difficult to keep up, eventually leading to financial crisis and excessive, frivolous spending.

As with many things in life (diet, exercise, to name a few), jumping into exercise all at once is not sustainable in the long run. I was tired of watching my bank statements and depriving myself of the things I wanted. Doing “the right thing” all the time was starting to get boring.

It didn’t happen all at once, but little by little, my budget disappeared. A purchase here, another there. Giving in to temptation felt good. If I wanted something, I bought it. For about six months, I went on a spree. I bought clothes, expensive computer equipment, furniture, anything I could get my hands on. Fortunately, I never spent money I didn’t have, but I did dip into a lot of my savings account and wasted a lot of time where I could have been growing my wealth.

I was now somewhere between the two extremes: extreme saving and extreme spending. Neither method was working. I knew I had to find a balance and a way to make sure I continued to meet my savings goals while still living my life in a way that was enjoyable.

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I made 2 major changes to my budget

The key to avoiding frugality fatigue is allowing yourself the occasional splurge or unnecessary expense. So I’ve taken a few steps to become a happier, more sustainable saver.

1. I added “recreational expenses” to my budget

Before I changed my mindset, I felt guilty about buying things. But after my burnout period, I realized I needed to relax some of the restrictions I had put in place or I would burn out again. So I added “fun spending” to my budgeting app.

Today, I set aside about $50 per paycheck, which I can use however I want. Sometimes that means ordering dinner instead of making it at home, or buying a new book instead of going to the library. Other times, I set the money aside for more expensive future purchases.

At first, I was worried that using this money would cause me to fall back into overspending. But I realized that it was actually extremely important to my long-term goals. I came to view it as a break from trying to be productive. It’s impossible to work hard for long periods of time if I never take time to relax and recharge. The same goes for saving. It’s very difficult to be a good saver if I never allow myself to take advantage of what saving can do for me. Spending a small amount of money has become essential to saving large amounts of money in the future.

Budgeting may seem restrictive, but it’s really just a tool. By creating space to treat myself, I know I’m still saving the majority of my disposable income and working toward my savings goals, but I’m also having fun along the way.

2. I treat myself every week

One of the main reasons I felt frugality fatigue was that I never felt like I had anything to look forward to. Even though I knew that hitting certain savings goals would feel good, the day-to-day life got boring when every week was the same and the rewards seemed so far away.

Now, I treat myself to “mini-treats” once a week, usually on Fridays, to treat myself and give myself a reason to look forward to each week. Typically, this involves buying a nice latte and taking a walk around my neighborhood. Or, pre-pandemic, meeting a friend at a coffee shop. While it’s certainly cheaper to make coffee at home, treating yourself to a $5 artisanal cup is a special experience without being so expensive.

By finding ways to add enjoyable spending back into my week, I finally feel like I’m in a happy, sustainable routine. I’m living below my means, but I’m still enjoying life.

This article was originally published in January 2021.