Gemma and Robert Hartley had been living frugally for five years when he broke down and decided he couldn’t do it anymore. They’d reduced their overall debt, which include a mortgage, credit card debt and medical bills, from $130,000 to $105,000. And supposing their incomes continued to increase, their penny-pinching plan would leave them debt-free within another five years, with even their house paid off in full.
But Robert had reached his limit. He was tired of living with their three children in a three-bedroom house in a rundown neighborhood in Reno. He wanted something bigger and nicer, even if it meant adding years to Gemma’s debt-paydown plan. More than that, he was exhausted by the frugal lifestyle his wife had imposed on their family. They walked to the grocery store and bought all their homeware items secondhand. They didn’t vacation and only went out when the activity was free, such as hiking. Instead of going out to eat, they invited friends over for potluck dinners. “It worked well for me, but not for him,” Gemma says. “He resented me for always being the one to call the shots and preventing him from feeling like he had any control over our money.”
So Gemma relented. They shifted some of the financial decision-making to Robert, started going out for dinner and drinks more frequently and bought a new house — one that cost more than twice as much, and increased their debt total to $285,000. Gemma says they’re happier now, but she still feels the occasional pang of guilt over their new, relatively free-wheeling lifestyle.
“We’re currently looking at being debt-free when we’re 55,” says Gemma, who, like Robert, is 28. “[Fifty-five] isn’t a terrible age to be debt-free, but when I think about how I could’ve been debt-free by 30, it’s a hard number to wrap my mind around. I definitely get anxiety about not saving as much.”
The Hartleys are not alone among people for whom the cost of living frugally proved too much and who abandoned their original financial goals so they could spend more freely. Their financial prospects may have lessened, but their mental health has improved.
After all, vowing to save more money and/or pay off debts often requires more than a few changes in behavior; many times, it requires completely overhauling one’s life. People who have successfully paid off their debts report that it came at the expense of their relationships and happiness. They trade expensive hobbies for cheap ones, live in squalor, lose friends, take up side gigs and remain homebound at almost all times.
“It worked well for me, but not for him. He resented me for always being the one to call the shots and preventing him from feeling like he had any control over our money.”
“Saving takes a toll emotionally,” says Terri Orbuch, a sociology professor at Oakland University and an expert on the intersection of money and relationships. “People know they should save, live frugally and pay down their debts. But when they look around and it seems like no one else is doing that, they feel alone.” (No wonder money is the leading cause of stress in the U.S.)
Ariel Lawson, 23, of Jacksonville, Florida, gave up frugal living three years ago when she fell in with a highly active group of friends. Previously, Lawson spent most of her time playing video games and hanging out with a controlling boyfriend who forbid her from socializing with anyone else. The isolation allowed them to save between $4,000 and $5,000 a month, however, and after two years together, they put a down payment on a four-bedroom, two-and-a-half-bathroom home.
When they split up, Lawson was liberated, and suddenly found herself not only having friends, but part of a 30-person friend group that had social activities lined up every day of the week. (She also got to stay in the house, and rents out the other three rooms to pay down the mortgage.) Every Wednesday, they went to see a friend DJ. Every Thursday, they went to a bar that offered free beer and pizza from 10 p.m. to midnight. Every Friday and Saturday night, they went dancing.
At the same time, Lawson’s job scaled back her hours, and she was faced with a tough decision: Either cut out the partying and risk her newfound friendships, or stop putting as much money in her retirement account. Ultimately, she chose friendship over finances.
“It was the first time in my life I was having a ton of fun, and I realized saving [money] wasn’t a top priority [anymore],” she says. “I was a lot happier on a day-to-day basis being surrounded by friends and doing these activities. And I weighed that happiness against the amount of retirement I could save over the next two years. I went from tracking every dollar, to not tracking it at all. I was literally no longer paying attention, not even a bit.”
Lawson has since reined in her social activities and spending, and is now saving about $300 a month. But she has no desire to go back to a life of severe frugality. Plus, she was lucky. She already co-owned a home and had a retirement account when she decided to loosen her spending habits.
For others, the social pressure to spend to puts them thousands of dollars in debt. Robert Weagley, a professor in the department of financial planning at the University of Missouri, has little sympathy for those who succumb to such temptation. People get stressed about saving money because they over-consumed in the first place, Weagley says. “Now it’s time to pay the piper for that decision. I understand they may have to miss some time with their friends, but those times are what got them in their current dilemma.”
That’s precisely what happened to Brett Ray, a 32-year-old in Vancouver, whose years of playing in a rock band and staying out late drinking put him $13,000 in credit card debt. “I just kinda figured, I’ll deal with it later on,” he says.
Orbuch says this is a common misconception, especially for people like Ray, who was surrounded by fellow musicians who were equally careless about their money. “People think, No one else is saving, so why should I?” Orbuch says.
It wasn’t until Ray met his current girlfriend — who was two years younger, but years ahead of him financially — that he came to this realization himself. She had two rental properties, no debt and nearly $100,000 between her retirement and personal savings accounts. “When that came out in conversation, I had a mini-panic attack,” he says. “I realized I had to tighten the screws.”
Ray devised a plan to pay the debt off within a year. He calculated that after essentials (i.e., rent and groceries), he could put between $1,200 and $1,600 a month toward his debt, assuming he spent only $200 a month on entertainment purchases, such as dates with his girlfriend or trips to the movies.
“I realized saving [money] wasn’t a top priority [anymore]. I was a lot happier on a day-to-day basis being surrounded by friends and doing these activities. And I weighed that happiness against the amount of retirement I could save over the next two years.”
He was proceeding as planned, but months before getting debt-free he experienced the same fatalistic dread Robert Hartley did. He realized that after his debt was paid off, he would have to continue saving to build up his wealth, and that the frugal lifestyle he’d temporarily resigned himself to was actually probably how he needed to spend the rest of his life.
“The more you restrict yourself, the more you feel like you need to reward yourself,” Ray says. For him, that meant going on a vacation. But he was scared that a vacation would send him spiraling back to his old, overspending ways. “My mindset was, This saving thing is never-ending. And what if I stumble and end up where I was, like a junkie trying to get his fix?”
Ray ended up unwittingly taking Orbuch’s advice and doing both: He saved up for a trip to China with his girlfriend, but he did it on a budget and in way that didn’t derail him from his larger financial goals. He now owns a studio apartment that he rents out and has around $10,000 in savings.
Ray serves as a perfect example for how to mitigate the stress of saving without giving up on frugal living entirely, according to Weagley. “If people are unhappy saving, they should set up some realistic, short-term goals and allow themselves to spend a little money and a little time with friends,” Weagley says. “The main thing is to celebrate their successes, but continue moving toward their ultimate goal.”