I’m Saving Money, but I’m Miserable: How To Ditch a Penny Pincher Mindset

Shot of a young man going over his finances at home.
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Make your coffee and cook your meals at home. Always buy generics and store brands. Instead of going to concerts, sit alone in your living room and listen to music — but never through a streaming service with a paid subscription.

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Everyone knows the standard advice for cutting spending and saving money — and most people really do want to save more, even if it means enduring some sacrifice and deprivation. But the penny-pincher mindset makes for a drab existence that sucks the joy out of day-to-day life and sets the stage for unintended splurging.

Is there a happy medium between overspending and under-living?

“There can certainly come a point where the balance between being frugal with your money and still enjoying your life is swayed,” said Yasmin Purnell, personal finance expert and founder of The Wallet Moth. “However, it is possible to be financially responsible while still living your best life.”

View Money Spent on Core Values as an Investment in Yourself

One of the keys to living well while still living frugally is to concentrate your spending on the things that deliver a psychological ROI — everything else hasn’t earned your money.

Make Your Money Work for You

“The best way to do this is to make a point of outlining your core values in life,” Purnell said. “Make a list of the things that are really important to you, such as a particular hobby or interest, spending time with family, or traveling the world. Once you begin to be more mindful of what really adds value to your life, you can redirect your spending to those things. Frugal living isn’t about spending less — it’s about spending smarter. It’s about spending your money on the things that deliver true joy to your lifestyle, and disregarding that unnecessary spending that simply drains your wallet.”

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Purnell talks about identifying your core values and directing your spending there. It can be hard to identify the things that truly add value, joy and betterment to your life, but chances are, you won’t find them in your Instagram feed, on the red carpet or in the super-sized holiday decorations in your neighbor’s yard.

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“To avoid overspending while still trying to live your life the way you want it, you have to draw a line between the things and experiences that genuinely make you happy and the things and experiences that you’re only after because of FOMO, peer pressure, and comparison culture,” said keynote speaker, author and celebrity psychologist Dr. Elizabeth Lombardo, Ph.D.

Make Your Money Work for You

“Enjoying life doesn’t mean you have to spend on everything that everyone else is spending on. Before you decide to buy something, eat somewhere, or travel somewhere, ask yourself if you’re really doing it to be happy or just to appear trendy among your peers. This way, you’re not really putting a hard cap on your spending, but you’re not throwing money away on frivolous spending, either.”

Time Isn’t Money, but It’s at Least as Valuable

Material deprivation is only part of the reason that hyper-frugality is taxing. The real strain often comes from an unhealthy exchange of too much time spent for too little money saved.

“The mindset of a penny-pincher involves someone always looking to save on everything,” said Damian Serwin, budgeting expert and the co-founder of Why Budgeting. “This can be time costly, however, and that is what a lot of people don’t account for. If we spend an hour looking for a discount of $5, this means we are valuing an hour of our time at only $5.”

That time-value tradeoff must be considered when looking at new side hustles, driving around town to find the cheapest gas or any other exchange of minutes for dollars.

Make Your Money Work for You

Set Goals and Reward Yourself for Meeting Them

Derek Sall, founder of Life and My Finances, thinks that the best way to escape the tedium of penny-pinching is to make saving fun by gamifying the process.

“As humans, we naturally have a competitive drive and feel good about our achievements,” he said. “Try rewarding yourself at every milestone while saving — i.e., every $250, have a spa day at home or make a really over-the-top meal and watch a movie. Rewarding yourself doesn’t have to be expensive. Reaching saving milestones will feel like an achievement, and therefore, make saving a lot more fun and satisfying.”

Trae Bodge, shopping expert and founder of TrueTae.com, agrees.

“Abstain, but not forever,” she said. “If you’ve cut out all luxuries, like getting coffee from your favorite barista, shopping for fun, or getting manicures, set savings goals that can unlock and reinstate those luxuries, within reason. For example, once you’ve saved a certain amount, you can start treating yourself to a cup of coffee a day with the barista, or one manicure per month, and so on.”

She also recommends partnering up with a like-minded saver to stoke competition and keep you on the path.

“Saving money can be a lonely business,” Bodge said. “If you know a fellow penny-pincher, challenge and encourage each other to save. You can make it a contest based on who reaches a certain level of savings first, but you could also simply put a date on the calendar every quarter where you celebrate your efforts.”

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.
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