Can Somebody Save Too Much?

Sun Oct 7, 2007 5:21:42 pm by Dustin
Filed under Dealing with People, Finance, General, Tools and Tricks

Get Rich Slowly has a nice post where a reader asks if he is saving too much. In a nutshell, this reader is in a very nice position since he is saving a large percent of his income, has a nice plan to pay off his mortgage early, and has no bad debt. The problem is that he only has a few hundred dollars of play money each month due to his aggressive savings/debt reduction. So, is he saving too much?

Short answer, never.

First of all I would like to give this reader a thumbs up for realizing current sacrifices will bring future benefits.

But it seems he is giving up some ‘happiness’ to reach these goals. Why would you make your life less enjoyable in every moment you can knowing it could end at any moment? That is a debate for another day.

Let us assume for the sake of the rest of this post he is happy with his current standard of living and is able to save more than he thinks is necessary to reach his goals. I argue just because somebody is happy with her lifestyle does not mean they need to spend as much money as they have to spend. More money does not mean one has to spend it. Enjoy your life, don’t let your money control your personality.


  1. Jeff

    I would rather have to save more for retirement now. That way I can retire earlier!

    spending money != happiness
    financial security = happiness

  2. James

    Good to a point. Just remember, you can’t take it with you.

    I also tend towards financial security rather than luxuries, but it seems to me like he’s getting a little hung up on it. For example, having established his emergency fund, it seems to me that further contributions could be from his “leftovers” when he has them. Not to mention, $275 every two weeks is actual a fairly decent amount of discretionary money…about $7000 per year, plus his wife’s contribution. I’d guess he’s simply gotten used to his financial position and not really recognizing what he is getting out of that discretionary money.

  3. Brandon

    I am trying to save heavily right now. I realize that my cost of living is incredibly low, I don’t have a family to support, and I have almost no debt. Plus, if I save now, the money will only compound faster and add up to a better standard of living later in life. I’m a college student still in the fact that I don’t need all of the flashy stuff that costs way too much to be happy.