Too Thrifty?

Dennis Friedman

I NEVER REALLY LIKED the vehicles that I owned. They were an unimpressive lot, including a Volkswagen Beetle, Mercury Capri, Toyota SR5 pickup, Toyota Camry and Ford Fusion. I would like to say they got me where I needed to go, but that wasn’t always the case. All the cars, except for the Camry, were unreliable, which would sometimes make my life stressful and difficult. Of course, keeping those cars for many years didn’t help.

When I think about it, I didn’t really like the homes I lived in, either. They included small apartments, without many of the standard conveniences you’d expect when renting or buying a home.

Some of my apartments were downright terrible. In 1979, I rented a studio apartment located on an alley above a garage. The apartment had poor insulation. It would get so cold in the winter, it felt like the North Pole, and it would get so hot in the summer, it felt like Death Valley. It was so small a friend who visited asked if the place had a bathroom.

It wasn’t the safest place to live. A drug dealer lived in the apartment next to me, my car was broken into more than once and one day someone stole my clothes from the laundry room. I stayed there for six years, putting up with all the discomfort and trouble that surrounded me.

The small 789-square-foot condominium I purchased in 1985 was an upgrade, but it wasn’t a place you’d want to stay for 35 years, which is what I did. A young lady, about the same age I was when I first moved into that studio apartment above the garage, bought my condo earlier this year. Her real estate agent informed me that this was just a starter home for her and she’d probably be moving within five years. When I moved to my current home, I realized all the comforts I missed out on during those years living in that small condo.

I made good money working for a large aerospace company, so I didn’t have to live that way. But I chose to—because I wanted to save money. When I look at my investment portfolio today, I have more money than I need for a comfortable and secure retirement. In fact, I probably saved too much.

You might ask, “Can someone save too much money? Is there such a phenomenon in personal finance?” I think so.

When it comes to saving for retirement, you have to strike a balance between forgoing smaller rewards today for larger rewards later. But you don’t want to delay gratification to such a degree that you make life harder than it should be. And that’s what I did to accumulate the large pile of cash that I’ll probably never need. Some of this money would have been better spent in my earlier years.

After I retired, I hired a low-cost financial advisor to manage my investments. Hiring that financial advisor got me thinking about my relationship with money.

One day, we were going over my budget for the year. I could tell he was prodding me to spend more. He asked me if I wanted to buy a new car.

“I don’t believe so,” I said.

He jokingly responded, “How about a boat?”

“No, I don’t fish.” I interrupted him. “I should tell you I’m getting married.”

“Congratulations, you surely could afford to buy her a nice ring,” my advisor said. “Why don’t we add that to your budget for this year?”

Since then, I have been adding quite a few more items to my yearly budget.

The upshot: I’m trying to live more in the moment, to enjoy life more. You shouldn’t live life always thinking about your future self—because it doesn’t do you any good saving money if you aren’t willing to spend it.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include Live It UpDon’t Delay and Try Not to Slip. Follow Dennis on Twitter @DMFrie.

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