After years of pinching every penny, I made 2 changes to make building wealth easier over time (2024)

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• I have loved saving since I was a kid, but it became an unhealthy compulsion for me.
• After years of denying myself, I experienced "frugality fatigue" and went on a splurging binge.
• I added fun spending and a weekly treat to my budget so I don't feel deprived.

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

I wanted an iPod Shuffle. I needed $100 to make the purchase, so I saved my $5 allowance each week until I finally had the 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 counter and walked away with my new iPod.

The experience shaped the way I managed my money for years. Having control over my money was thrilling, and I loved the idea that I could save and budget to get the things I wanted. As I grew older and started earning more money, being "a saver" became a part of my identity.

But over time, being frugal turned into a compulsion. Almost like a game with myself — how little could I actually spend while still ensuring I had the necessities? I was always looking for the cheaper option, I never bought anything "just for fun," I rarely ate out, and I'd often miss out on events with friends just because I didn't want to spend the money to participate. While frugality is certainly not a bad trait to have, I took it to such an extreme level that I wasn't enjoying the benefits of the money I earned.

I was no longer controlling money — I was letting it control me.

Frugality fatigue led to overspending

I realized I was experiencing "frugality fatigue." It's a term used by some sociologists to describe budgeting burnout. Essentially, being so frugal for so long that it becomes too hard to keep up with, eventually leading to financial breakdown and frivolous overspending.

Like so many things in life — dieting and working out to name a few — going "all in" all at once is unsustainable in the long run. I got tired of watching my bank statements and denying myself the things I wanted. Doing "the right thing" all the time was getting old.

It didn't happen all at once, but slowly, my budget disappeared. One purchase here, another there. Giving in felt so good. If I wanted something, I bought it. For about six months, I was on a complete splurging spree. I bought clothes, expensive tech gear, furniture, anything I could get my hands on. Luckily, I never spent money I didn't have, but I dipped into a large chunk of my savings account and lost a lot of time where I could have been adding to my wealth.

I'd now been on both sides of the spectrum: extreme saving and extreme spending. Neither worked. I knew I needed to find balance and a way to ensure I was still hitting my savings goals while also living my life in an enjoyable way.

I made 2 important changes to my budget

The key to avoiding frugality fatigue comes in allowing small splurges or occasional unnecessary spending. So I took a few steps to become a happier, more sustainable saver.

1. I added 'fun spending' to my budget

Before my mindset switch, I felt guilty about buying things for myself. But after my bout with frugality fatigue, I knew that I needed to loosen some of the restrictions I'd put in place or I'd just burn out again. So, I added "fun spending" into my budgeting app.

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

At first, I was anxious that using this money might make me relapse into overspending. However, I realized that it's actually extremely important for my long-term goals. I've come to think of it as analogous to resting when I'm trying to be productive. It's impossible to work hard over long periods of time if I'm never taking the time to relax and recharge. It's the same with saving. It's very hard to be a good saver if I never allow myself to enjoy what saving can do for me. Spending a small amount of money has become integral to saving large amounts of money in the future.

Budgeting can feel restrictive, but it's really just a tool. By creating space to indulge, I know I'm still putting aside the majority of my disposable income and working towards my savings goals, but I'm having fun on the journey too.

2. I get myself a treat every week

One of the big reasons I experienced frugality fatigue was because I felt like I never had anything to look forward to. While I knew hitting certain savings milestones would feel good, the day-to-day grind became tiresome when every week felt the same and the payoff felt so far away.

Now I implement "mini-splurges" once a week — usually Fridays — as a way to treat myself and give me something to get excited about each week. Usually, this looks like buying myself a nice latte and taking a walk around my neighborhood. Or, pre-pandemic, meeting up with a friend at a coffee shop. While it's definitely cheaper to make coffee at home, splurging on a $5 craft cup feels special without really being that expensive.

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

This article was originally published in January 2021.