Excessive Budgeting Will Not Make You Rich

penny pinching drawing
4 min read

My grandfather is the most frugal person I know. He always lives on a budget. As long as I can remember, he’s had the same wardrobe. One of his cardigans even has a hole in it. But he refuses to throw it away.

My mother bought him a new cardigan years ago. But he left it unopened in the packaging. The damned vest has to fall apart first; otherwise the OG won’t throw it away.

“This one is perfectly fine,” is his motto. Literally nothing has changed in my grandfather’s house for decades. And he has no problem with it. 

But here’s the thing: Penny pinching, budgeting, and frugal living will not make you rich. It only causes stress.

”What?! Aren’t you supposed to be stress-free if you’re frugal?”

In my experience, people who are too focused on their spending have the same amount of stress as people who are in debt. It doesn’t matter whether you’re rich or poor, but if you’re controlled by money, there’s something wrong. 

Look, if you’re always thinking about money, it will drain your energy. I’ve been there too. Several of my family members are extremely frugal. They are always trying to save money. 

And they always worry about the price of something. I don’t blame my grandfather at all. The man lived through a war and times when food was scarce. During war and crises, famine always lurks around the corner. You simply don’t know what will happen tomorrow. That’s a different way of life.

But if you’re born in the West, after 1980, you haven’t been through anything close to famine. Of course, poverty still exists today. But today’s world is full of opportunities that were unreal just a decade ago. 

So if you’re currently budgeting excessively, you’re doing something wrong. Instead of wasting your energy on saving a few bucks here and there, invest in yourself and create some actual value. 

One of my friends always complains about how expensive everything is. He once drove 2 hours to buy a used car that was 500 bucks cheaper. He spent a whole day looking at the car. And then he had to spend another day to pick the thing up. He took a bus to the dealership, picked up the car, and then drove back. 

One week later, something was wrong with the car. He had to spend countless hours talking to the dealer so they wouldn’t charge him for fixing the car. Two months after that, something else broke down. This time, the dealer said, “no warranty, buddy.” 

The whole saga set him back close to two grand. All that just to save a few hundred. And imagine how much time he wasted. Being cheap is often very pricey. 

Budgeting = Scarcity Mindset

I’ve made these types of mistakes too. You think you’re being smart by saving money on certain things, but if you honestly look at it, you’re only wasting time.

And as you and I both know, time is more precious than money. Once I decided that I’m valuing my time more than money, I changed my mindset. 

When you’re budgeting, you’re acting out of fear. You have a scarcity mindset. You think, “We never know what happens, so it’s best to save our money.” 

That’s weak. Instead, I live my life the way I want. But I’m not irresponsible. I have a very clear rule when it comes to worrying about money: If my loss is less than 100 bucks, I don’t worry about it.

  • Is it cheaper to do my groceries at a supermarket that’s 20 minutes away from my home? Screw it, I’ll go to the more expensive one that’s closer to my house.
  • Is the steak more expensive than the pasta, and I feel like having a steak? Let’s have steak. 
  • Do I need to pay a premium to get a bigger room at a hotel? Let’s go for it because I want some space so I can work or comfortably read a book.

I can go on for a while. What it comes down to is that I don’t act out of fear anymore. In the past, I always thought I might lose my money in the future. Why? If you think about it, there’s no real reason. As long as people have jobs and companies exist, you will be able to make money.

No Stress

Look, I don’t go out to dinner every week. I don’t go to the most expensive hotels. I don’t travel a lot. I don’t buy a lot of things. 

But when I do do those things, I do them well. That’s because I don’t want to have money stress. I don’t want the stress of always trying to make more money so I can have a grand lifestyle. 

And I also don’t want the stress of always fearing that my money runs out. It’s one of the things Vicki Robin talks about in the classic personal finance book, Your Money Or Your Life. I highly recommend reading that book if you want to change your relationship with money.

I’ve finally found a healthy relationship with money. I’ve acquired income-producing skills and invested a lot in my education. So I don’t worry about being out of a job.

It doesn’t matter whether you’re trying hard to save a few pennies or working hard to make 1M—if money controls your life, it’s time to rethink it. 

Create a life for yourself where you’re free to do what you want. The key is to desire less. So it’s not only a matter of personal finance. This is also a matter of philosophy.

No matter what you do, don’t copy other people’s money strategies. Everyone is different and has different desires. It’s called a personal finance strategy for a reason. The way you treat money differs for every person.

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