Penny-pincher, cheapskate, miser, tightwad, skinflint … if you’ve ever been called any of these names, you may be a compulsive saver. But is that necessarily a bad thing? After all, isn’t Financial Education always advocating that everyone increase their ability to save money? Well, there is some controversy.
It is more common for us to worry about cases of compulsive spenders, since they are the ones more likely to suffer a deterioration in their Personal Finances. But all exaggerated and extreme behavior is dangerous.
When should you start worrying about being a compulsive SAVER?
You need to recognize when saving money itself ends up becoming the person’s main focus, rather than the benefits that this savings will bring. An abnormal need for security may explain this behavior, but every case is different.
There is nothing wrong with saving excessively. You should pay attention when this attitude puts some other aspect of your life at risk.
For example, imagine that someone desperately tries to reduce food costs and, for that reason, buys only low-quality products: nearly spoiled, past their expiration dates, or of questionable origin. This may even generate savings now. But in the future, a weakness or health problem could lead to many other expenses.
Another very common example is using cheap fuel in cars. You will spend less money now, but you run a serious risk of having a more serious problem with the car due to the poor quality of the fuel.
You need to analyze the relevance of the savings so you don’t “save money the wrong way.”
Saving money is never completely wrong, but the idea here is always to understand the “cost x benefit” of these savings and focus on actions that provide the best return.
For example, imagine that you want to reduce your water and electricity expenses, which these days are experiencing a major rate increase (not to mention possible rationing). Well, with this in mind, you implement strict usage controls, using very little water in the shower, letting the dishes pile up for 1 week before washing them, turning off the TV, and charging your phone and laptop only at the office.
All of this is commendable and will generate some savings for you. But it will be of no use if you have a water leak in your home’s plumbing. Or if you have an old refrigerator that consumes far more energy than normal.
The biggest problem here is the illusion that you are saving money, when in fact there are other items generating expenses much greater than the savings achieved through sacrifice.
Believing that accumulating money is the solution to all problems.
Don’t fall into the temptation of thinking that having more money is the only solution for making your life better.
Money is good, of course, and it will help you have a better quality of life. But there are many other aspects that influence our happiness. Finding the balance among all these factors may be the best strategy for living a fulfilling life.
