Unhealthy Frugality Disease

Julie Marquez · 2016-12-22T09:04:53-08:00

Blame it on the holidays, consumerism season, or the purchase of my latest rehab project, but I've been thinking a lot about my relationship with spending money. I have this unhealthy relationship with healthy money management. It probably stems from the fact that my real estate investor parents are very frugal, and I grew up sorting our garbage into burnables and non-burnables, saving everything, and never spending money unless it were heavily discounted or a tremendous value (hello all you can eat buffets). Then I found mint.com about five years ago and started diligently tracking my personal spending habits. This tool is a great resource to budget and save, and it helped me to save up for a new car and then buy an investment property.But what isn't cool is my determination to save all my money, and this little internal goal of mine to spend as little money as possible. Having the idea that I have to save everything puts me in a lot of despair at times; like when I had to shell out $100 for a (worthless) doctor appointment and $100 for a flat tire.I'm not even a poor person. I make enough money from my job to save about $2000 a month; but I have created this mentality that if I'm not saving $2000 or more, then I'm losing money. But this terrible disease about NOT spending money ruins me when I HAVE to spend a little money. Some say it's just the cost of life. I say that I need to change my mentality so I don't get all crotchety when the fact of the matter arises.So there's my broken, little, money heart on the line. I need a new view on my money and to understand it's power and joy, and to not get so hurt about parting with it. Do any other real estate investors suffer from unhealthy frugality and how to I transform my relationship with spending money? Thanks friends!

Mike CumbieBusiness Member

REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes

9y

Hi @Julie Marquez,

Personally I spend. I know my business would grow faster if I saved more and stayed home more. But I take the wife to dinner, we mingle with friends and I have pulled deals from those times. It takes money to make money, trying to hold onto every cent just makes people not want to do a deal with you because they are always expecting the penny pinching.

So find out when your local Lions/Elks/Vets club is running their next raffle. Grab a friend head down there and buy $20 worth of silent auction tickets. Then buy $20 worth of 50/50 raffle tickets. Pay the $10 for the spaghetti dinner and mingle. You will find out that when people ask what you do and you say "I'm in Real Estate" how many conversations start.Treat it like a business dinner and have an objective to leave with at least 2 new contacts that you may work something with in the future.

Good Luck!

9 Reply

Jeff Brower

Real Estate Agent · Willoughby, OH · Member since 2014 · 560 posts · 690 votes

9y

You're not alone! I also find myself in this state of mentality most of the time. I find myself eating $0.68 walmart cans of tuna in a sandwich for lunch at the office most days (tuna is fairly healthy so that is half of the motivation to skimp on the lunch buffet).

I think Grant Cardone addresses this issue the best. He does not focus on limiting expenses, but rather increasing income. Watch any of his weekly youtube videos and I think you will see that his mentality is correct. He doesn't worry about decreasing debt/expenses, but rather on increasing assets /income. He now owns thousands of units; I think he is right in his thinking.

4 Reply

Julie MarquezPro Member

OP

Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

9y

@Mike Cumbie All that social stuff sounds like more fun than my usual routine! Thanks for the suggestion, I am going to seek out some ways to spend a little money (and be a-okay with it) and find the value in meeting people and building relationships! Sounds much more fun than staying home and fretting about my pennies.

5 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

well one tip is in the northwest you can go to Les Schwab tires they fix any flat for free they just ask you consider them for your next tire purchase.

this is a very fine line.. as I have been in the industry 40 some years now and have mingled with the very wealthy and of course those just starting out and or our laborers that just came in from Mexico.

we all have our thing.. before they perforated paper towels in half I would tear mine in half.

However my Dad was a little like this workaholic until one day our attorney told him he needs to stop and smell the roses.. that led to him buying a Time share in Maui way back in the late 60S when Maui was really cool.. and you only used it certain weeks so he bought the 2 weeks of thanksgiving and one after.. so for many years that's were we went.. he had to he owned it.

I for one am not going to hoard and go through the pearly gates with a boat load of cash.

I think once you can reasonably pay for things that you may see as non essential as long as your not putting your vacations on your credit cards ... but basically take care of all debt except real estate and cars ( cars with 1 to 2% interest are not worth paying cash for unless you like to drive old used car's which I don't car to do).. and then you have extra cash then spend it on life adventures is my moto.

We live in the Jet age for 1,200 bucks and 12 to 18 hours you can be on the other side of the planet.. Travel to me is precious, Stimulating and something we love... hovering around the house and never going anywhere that to me is quite boring.. but once you have your basic financial house in order then move out and do things for yourself what ever they may be...

For me it was airplanes.. did I need one.. NOPE.. could I have retired on what I have spent owning airplanes the last 30 years YUP.. can you take away the thrill I get when I hop in my plane in Portland and 1 hour later I am having lunch at Friday Harbour .. NO WAY... so there ya go.

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15 Reply

Julie MarquezPro Member

OP

Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

9y

@Jeff Brower I'm right there with ya on the tuna fish. I'm generally not a Cardone fan because I actually want to do 10x less work and effort, hence my despairing frugality mentality. But that guy is successful and I'm sure I could learn a thing or two from him and his unlimited belief on increasing wealth with more. I need to understand how the "other side" works, thanks for the tip.

@Jay Hinrichs I love Les Schwab, but this was an out-of-the-blue rental car charge from a past reservation (I'm probably just bitter about the whole incident anyway). Life is a lot more than saving pennies, and while I have no bad debt and am smart with my expenses, I need to loosen up and live a little. I realize nothing bad is going to happen if I spend money on my "airplane" hobby, and that my life might be enriched and live better if I actually do so. Do you budget for it and explain to yourself that it's okay to spend $xx a month on airplanes? I have to have these internal conversation to convince myself. Experiences and connecting with people seem to be a common theme, and lunch in Friday Harbor sounds amazing. Say hi when you pass over Anacortes!

1 Reply

Mike CumbieBusiness Member

REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes

9y

I stop at the VFW for a draft beer and a Ham raffle... @Jay Hinrichs flies his personal plane to lunch an hour away. Kind of the same thing...... :)

4 Reply

Kory Thaut

Investor · West Linn, OR · Member since 2015 · 100 posts · 58 votes

9y

@Julie Marquez If you figure out how to get out of the cycle, let me know. I have the same problem with viewing unmet saving/investing goals as loosing money when at the end of the day, it's all in the black and not red.

About 4 years ago I started reading the Mister Money Mustache blog and it kind of ruined me a bit. Now I try to read/listen to a little more Cardone (who I don't fully agree with either) just to try and balance myself out and get back to the middle.

0 Reply

Mikki Kline

Real Estate Investor · Cochran, GA · Member since 2016 · 18 posts · 6 votes

9y

I don't have a whole lot to add, but as a private pilot, I struggle with wanting to spend money on flying but know I need to save it and let the seed grow so I'll have an "orchard" later on :) @Julie Marquez and @Jay Hinrichs

1 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

9y

I simply differentiate between necessary spending and frivolous spending. I only concern myself with wasting money on frivolous spending. Doctors and car repairs do not fall under frivolous, they are necessities.

As I have gotten older and more financially well off I have passed all the frivolous spending responsibilities on to my wife. I do not concern myself with them any more. As long as there is still money in the account, allotted to our monthly expenses and frivolous spending, at the end of the month I don't care what it gets spent on.

Simple budgeting removes my responsibilities to concern myself any longer. The key is having a frugal wife I trust.

3 Reply

Sonny RuckstuhlPro Member

Investor · Reno, NV · Member since 2013 · 39 posts · 41 votes

9y

@Julie Marquez The hardest thing to learn is what's enough. One penny over that is too much.

Defining that is for each individual.

In my work, I see people who range from homeless to millionaires. I am in an investment group that is populated with individuals who seem terrified all the time about what is going to happen next and I don't know if they can be satisfied.

Me, I have my dollar targets of what's enough. I try to keep perspective of what makes me happy. I have a general idea of what jobs the dollars have. I kick myself for my mistakes. And, for perspective, I check out my income and compare it to state, national, and world norms.

Figuring out your "why" for those dollars seems like a good exercise.

Don't know if any of that is helpful.

0 Reply

Deanna McCormick

Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes

9y

I wish you were my sister,, she's blown 2/3rd's of her inheritance and was just given the last 1/3.

I wish she would penny pinch let alone dollar save. I dread the day when I'll get the call that's she's broke.

We both grew up in frugal households, parents saved, gifted to church, and we were taught money management at early age,, I had a check book at 10 years old for my paper route. and income to boot.

So your glass is more than 1/2 full not 1/2 empty and enjoy some simple spending and don't think of it as spending. If you don't feel you can reward yourself give it to someone that really needs it. Your reward will be in helping them.. You can't take it with,.. I'll tell you that for sure.. and the vultures and attorneys help settling things get their fair share.. Don't leave bequests to charities in your will or trust. Give them the money NOW.. so you know how it was used and where it goes.. Even charitable beneficiaries want to verify they are getting the correct amount from a will / trust and it just costs more legal fee's to get them to accept a dime yet alone a dollar..

just my 2 cents.

1 Reply

James Barnhart

Rental Property Investor · Ocala, FL · Member since 2016 · 226 posts · 140 votes

9y

It looks like some of you are kinda OCD about it. I may be too, but I prefer to call it CDO. (alphabetical)

1 Reply

Account Closed

Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes

9y

People put way too much emphasis on money. Just because its easy to count doesnt mean its the only way to track your life. What is far far more valuable and non renewable is time. To me money is a way to get better experience with my time. I have a certain number of days on the planet. Money allow me to spend them more in the way I want to and less in the way I dont. Thats it. If I buy a nice house to live in, my time is more enjoyable than if I am homeless. If I drive a BMW, my time in the car is more fun than in a Honda. If I travel, its experiences that enrich my life. If I help people, it gives me satisfaction of doing some good. If I didnt spend the money, I would have none of that and would have wasted my time. Which is far more terrifying to me than losing money.

19 Reply

Sarah D.

San Diego, CA · Member since 2015 · 273 posts · 226 votes

9y

@Julie Marquez What's your why? Why are you saving money? Why do you want to get into real estate? Focusing on the why allowed me to let go of the simple dollar tracking.

Do you have a circle of friends that like to do the same things as you and have the same financial habits and goals? Or are you saying no to fun with friends because they just want to go out and spend? I found that having like minded people around makes it so much easier to stick to your financial goals and realize your life is not deprived (or you could always be the one to start the fun low cost traditions).

@Kory Thaut It's funny, the MMM blog actually helped me let go of the focus on the money side, and focus more on quality of life.

2 Reply

Julie MarquezPro Member

OP

Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

9y

@Kory Thaut I'll avoid MMM and try for a little more Cardone too. All the best to you!

@Mikki Kline It sounds like you know how to enjoy life! :)

@Thomas S. Money is powerful - when spent on enriching things. I am afraid to be poor or unable to purchase another investment property in the future. The more I save now, the sooner I can purchase another property. But what's the point of going through life if I'm going to pinch pennies and not enjoy it?

0 Reply

Julie MarquezPro Member

OP

Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

9y

@Sarah D. I'm saving up for a down payment for my next investment property. I think other investors get that and are doing the same, but why am I so obsessive about it saving every penny? I'm probably not the most "fun" person in my circle of friends, but they understand my limited spending habits, and I do value my time and money spent with them. I think somewhere in the management of my personal finances, I've just become a little too obsessed with saving (necessary and unnecessary).

1 Reply

Account Closed

Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes

9y

@Julie Marquez If it is truly causing dysphoria look up peniaphobia treatment. Be happy I just saved you a $150 + doctors visit.

0 Reply

Steve B.

Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes

9y

Not to take the fun out of this thread but it may be useful to focus on the fundamentals of the utility of money and leave the subjective elements to each individual. I'll just refer to what I've learned regarding this question by famous researchers which align with my experience. I think it was Thorstein Veblen who said the difference between rich and poor is the ability to save. My two best friends are a lawyer and Architect respectively, on a good year they make higher wages than my active income, yet neither of them have a pot to piss in after their expenses are accounted for. Despite what the worlds best salesman: Grant Cardone, tells people it is highly unlikely you are going to out-earn your bad spending habits. If you read "The Millionaire next Door" by Thomas Stanley, you will see that most multi-millionaires are frugal by nature. The reason is simple; for maximum return you should invest your active earnings into productive investments until your passive earnings far exceed your active wages. It's is very hard to build up an investment portfolio when you spend every dollar that comes in with car leases, buying the nicest Viking Appliances, and a Sub-Zero Fridge.

If you read "the How of Happiness" by Lyubomirsky or "Happy Money" by Norton (the better of the two books) you will see they share the same basic theme, which is: you should always spend money, if you are going to spend money, on experiences and not "things". That's why Jay's travelling around on his private plane is a better idea for excess cash than treating yourself to steak at Chili's or Applebee's (rather than canned tuna for lunch) or than buying a more prestigious car that is unlikely to result in an extra long-term "happiness" yield on your money. Therefore I have come to the conclusion I will forgo a certain amount of investment opportunity if I can buy an "experience" if that value proposition makes sense. Conversely, I have also become less interested in buying "prestige and appearance" items chasing pecuniary emulation as I've grown older. I'm sure Grant would abhor that idea!

Finally I'll say surprisingly that money is much like sex, an excess of either wont make you happy, but a lack of either will indeed make you sad. Spend accordingly.

16 Reply

Sarah D.

San Diego, CA · Member since 2015 · 273 posts · 226 votes

9y

@Julie Marquez It's easy to get obsessed with one of the few things you can control. You can't control interest rates, deal availability, contractors, city permitting, renters, etc. But you sure can control whether or not you go out or add the money to your DP fund :)

1 Reply

Jody Sims

logistics · Lexington, KY · Member since 2015 · 33 posts · 30 votes

9y

@Account Closed Extremely well put. The obsession with having more (money) is at the root of a pervasive conservatism that spills over into far more areas than the bottom line on your bank account. All the posts Julie has made on this subject indicate this has become an invasive obsession for her, closing off opportunities for a more rewarding life. Our existence is finite. The end goal is to have experienced a richly rewarding life, not a life rewarding riches. You should recall that saying... "You CAN'T take it with you." Do with it what enriches your life, or that of others, now.

4 Reply

Ryan Hilbun

Investor · Scottsdale, AZ · Member since 2016 · 40 posts · 19 votes

9y

I like MMM because he focuses more on finding happiness not in what we have or experiences we pay for, but in our relationships and the ability to find happiness with less. He is a bit too frugal for me sometimes though.

I often feel the same way about letting go of money. I don't have a problem with something being expensive. If it's something I feel I need, I do my research and try to find the best value I can. I guess I've just gotten into a mindset that things most people see as necessities, I see as luxuries. when I look at it that way, it's a lot harder to let go of my money. I don't think that's a terrible place to be because in the long run people like us will be far better off than most of the population. However, I do think you need to find a healthy balance, something that I'm still trying to find.

I have two suggestions:

1. Accept the fact that you're weird and most people aren't going to understand you.

2. Give- find someone in need and help them or give to a charity, it feels great!

4 Reply

Angela Worley

Salt Lake City, UT · Member since 2016 · 5 posts · 3 votes

9y

@Mike Cumbie you've made very valuable points. Socializing can turn into networking for your business. I treat every social opportunity as a business opportunity so that dinner is definitely worth spending a little.

2 Reply

Julie MarquezPro Member

OP

Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

9y

@Account Closed I wish I could control contractors! So instead I freak out about controlling my money. :(

3 Reply

Julie MarquezPro Member

OP

Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

9y

@Jody Sims Do with it what enriches your life, or that of others, now. Thank you!

@Ryan Hilbun Just like you, I'll spend money if it's a good value only. Thanks for those suggestions, I am weird and I'm okay with that, and I'll look into giving and that power of spending my money in a positive way.

1 Reply

Sarah D.

San Diego, CA · Member since 2015 · 273 posts · 226 votes

9y

@Ryan Hilbun Couldn't agree with your suggestions more!

1 Reply

Unhealthy Frugality Disease

Unhealthy Frugality Disease

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