Can Being Too Frugal Make it Harder to Retire Early?

There has been a huge push to live frugally in the last few years. I believe that overall the idea to save money and invest it, is a great way for people to get ahead in life. Many people have goals to retire early and saving a lot of money at an early age is the best way to retire early. Living frugal is one way to save money, but is living too frugally actually hurting you just as much as it is helping you? I have been frugal most of my life in many ways, but in some areas of my life I am the complete opposite of frugal. I bought a Lamborghini in 2014 and most people would think that was a giant waste of money on the surface and the opposite of frugal. In retrospect it has been an awesome investment for my business and the car has been an awesome investment itself.

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While living frugally will save you money, I think living too frugal can hurt how much money you actually make. It can also damage your mental attitude towards your own self-worth and deny you happiness.

  • I spend money on the things that save me time, because time is my most valuable asset.
  • I spend money on things that make me truly happy or my family happy, because we only live one life and I want to take full advantage of it.
  • I spend money on products, classes and education that will improve myself or my business.
  • I don’t spend money on things I don’t care about just to keep up with the Jones.
  • I don’t spend so much money that I have nothing to save or invest.
  • When I first started my businesses I spent very little money on myself so that I would have the capital available to grow quickly.

What does it mean to live frugal?

Here is the definition of frugal from

1. economical in use or expenditure; prudently saving or sparing; notwasteful:

2. entailing little expense; requiring few resources; meager; scanty:

The first definition makes perfect sense to me. Being prudent in the way you spend money and not wasting money when you do not have too. The second definition is when people start going too far and harming themselves more than they help. The words meager and scanty are not good words. I don’t want to live a meager life, but I think many people get so far onto the frugal train they get obsessed with saving and forget to live.

Are there good and bad ways to live frugal?

While it is good to save and not be wasteful with your money, it is not good to spend money on nothing and live a meager life. For example: If you have one child and drive an Excursion to school and work every single day, it might make sense to look into buying a smaller more economical car. You have to look at why you bought the Excursion. Was it a status symbol? Was it what all your friends have? Was it the nicest car you could qualify for? Could you buy a cheaper car that gets better gas mileage and be just as happy? Or could you be even happier by using the money you save on gas and payments for something else? This to me is looking at things in a frugally good way.
On the other hand you might have to commute to work everyday 15 miles and currently own a Prius. However, you are thinking about selling your Prius and using the train to commute or riding your bike. It will take you an hour longer to get to and from work. You may save a couple hundred dollars a month, but you also lose 40 hours a month in time! Maybe that sacrifice is worth it if you have no family and love to ride a bike. Is saving as much money as humanly possible in every aspect of your life worth it?

How can living frugal help you retire early?

To retire early you have to save a lot of money, invest it wisely and control your spending habits. Living frugal will help you retire early, but you can’t rely on just living frugal to retire early. It is pretty obvious that saving money is a good thing, but there is more to retirement. Once you save that money you must invest in something that will make that money grow. I think real estate is the best way to make money grow quickly, but there are many ways to invest. The more money you can save, the more you can invest and the faster you can retire.

If you are looking for a site to help you live frugally, I am probably the wrong person to listen too. Mr Money Mustache has a great blog on living frugal, although I think he may take frugality a little too far and he thought buying a Lamborghini was about the dumbest thing anyone could do.

To learn how to use mindset and attitude to make yourself more successful, check out: How to Change Your Mindset to Achieve Huge Success: Why your attitude and daily habits have more to do with making more money and having more freedom than anything else. A 200 page book available as an eBook or paperback on Amazon.

How can living too frugal hurt your ability to save money and retire early?

While it may seem obvious that saving more money can help you retire faster, is it possible that being too frugal will hamper your saving? Saving is a huge part of retiring, but you can’t just look at how much money you save on each activity or thing you buy. You have to look at how much you save in your bank account. You may be saving $10 on groceries by going to three different stores, but how much time is that costing you?

You have to look at the opportunity cost when you are trying to save money. Many of us own a business or are self-employed. If you work for someone else you know what your hourly wage is or what your salary is. We should all have some idea of how much our time is worth. Most of us know if we work a little more we will most likely make more money. Even if you are salaried and don’t get paid by the hour, the more you work the better chance you have of getting promoted.

I don’t think working as much as humanly possible is a good idea, but we all need a certain amount of time off, time with our families and sleep. If you are spending hours each week to save money, that means you are taking time away from something else in your life. Either you are sacrificing time with family, yourself, work or both. While you may be saving $50 a week, what is the time it takes you to save that worth? Maybe it is worth it and maybe it is not. Too many people think just because they are saving money it is worthwhile at all costs.

While you may be saving $50 here or $100 there, the time it takes you to save may be costing you thousands of dollars. Sometimes it is worth it to spend a little more money to save a lot of time. When I used to plan a vacation I would spend hours looking for the best prices on hotels and air fare. I would scour the internet for great deals and end up picking the cheapest flight I could. Many times the flight had a connection, while a non-stop flight was only a $100 more. I would add hours and hours of flying time and headaches to save $100. I could be using that travel time to enjoy more vacation time and I would probably feel better on my vacation the less time it takes me to travel. If I was going on a business trip I could spend more time focusing on business and less traveling for a mere $100.

Here is a great article on how taking more time off, can make you more successful.

How can being too frugal hurt your ability to make more money and retire early?

If you are unwilling to spend money on things that make you happy, are you sacrificing your happiness in the name of being frugal? We all have different likes, dislikes and hobbies. Some people like traveling, some outdoor activities, some like cars, some like clothes, some like socializing. I don’t judge people on what they like or dislike, but I think many people determine what they should or should not like based on what it costs. I like cars and I have liked them since I was a very young child. When I was younger I always wanted a Lamborghini, but when I got older I was convinced spending $100,000 plus on a car was a horrible idea. I also thought I would never have the money to own a Lamborghini. I justified to myself that it was okay to bury that desire, because I might not ever have the ability to own a Lamborghini and I didn’t want to fail or be disappointing.

Hiding you true desires, wants and needs is not healthy and I think being frugal causes many people to hide what they really want in life. This attitude harms people in two ways.

  1. If you hide what you really want in life, can you ever be truly happy? The happier people are the more successful they are. If you don’t think you are worth it or will ever be able to afford the things you truly want, you will be less successful in life as well. Our sub conscious tries to help us get what we want. If you hide what you really want, you will never get it.
  2. Big goals can be extremely motivating. When I finally allowed myself to want a Lamborghini again, my life changed. I realized I was hiding something huge that I had always wanted. When I made a goal to buy a Lamborghini I started making more money, I became more motivated and I felt different. I was happier and felt more myself that ever before.

If you don’t think you are worthy of expensive things that make you happy, you will most likely never make a lot of money. If you don’t have big goals to motivate you, you most likely will never make a lot of money. While being frugal will help you save, if you are too frugal it may hurt your ability to make more money. What we are really after is saving the most amount of money possible. Spending less money is one way to save, but making more money is another way to save. The biggest problem with being too frugal is what it does to our attitude and how we view ourselves.

Here is an article on how to know when to spend money on yourself.

How can you create a frugal saving strategy?

So how do you know when you are being too frugal or not frugal enough? There is no right answer to this question because everyone is different. I try to spend money on things that truly make me happy. I don’t buy things on a whim and I make sure I research big purchases. One thing I love to do is set goals for big purchases. When I do this, I will buy this. This way I make sure I save enough money, buy enough rentals or accomplish something else before I spend a lot of money. This also helps stop me from spending too much money until I have saved enough or made enough.

For my business I make sure I have enough cash available for operations and expansions. But I also am not afraid to spend money on things or education that will make more money. I talk to a lot of people who are worried about spending money on their own education, because they feel they can get the same results by learning things on their own. I was the same way when I was younger and you have to ask yourself if the extra time it takes and mistakes you will make on your own are worth it. Or is it better to learn from someone who has done what you want to do, has made the mistakes already and can drastically reduce the learning curve?

I have spent a lot of money on coaching and improving my business. It is scary shelling out thousands of dollars when there is no guarantee you will succeed. However when you spend money it also tends to give you more motivation, because you want to get your money’s worth. Many times the success of the student does not depend on the teacher, but how hard the student is willing to work.

I have created many products that will help people be better investors and real estate agents here.


Too retire early you have to save money and make money. Some of the most frugal people in the world are often people who make very little money. Sure you may be able to retire early if you spend almost no money, but is that really how you want to live? Are you hiding and burying true wants and desires in order to live cheap? The interesting thing is that letting those desires come through and using them as goals may allow you to make more money, save more money and retire even earlier than being too frugal. Just don’t lose track of the ultimate goal to save and invest as much as possible, not to make and spend as much as possible.


  1. Daniel Y. October 8, 2015
    • Mark Ferguson October 9, 2015
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  3. Dan Clark October 6, 2015
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  4. Narelle Myke October 5, 2015
    • Mark Ferguson October 5, 2015

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