Burnt Out: The Negative Impacts of Overdoing FI-RE

Frugality has long been considered a virtue in many cultures around the world. The ancient wisdom of saving for a rainy day has helped human communities survive unpredictable swings of fortune between feast and famine for millennia. Unfortunately, modern consumer culture may have suppressed some of our frugal impulses. Still, with dwindling planetary resources and increased economic uncertainty, this age-old virtue may once again become a necessity for surviving the 21st century.

Approached the right way, thriftiness can teach people how to make their money go further and endear them with a greater sense of gratitude. Yet just as compulsive consumption is a symptom of an unbalanced personality, going overboard with frugality is also problematic.

Extreme frugality is characterized by an aversion to spending money of all kinds. Those with an extreme mindset view expenditure as inherently wrong, no matter the amount of money or the necessity of the spending. This overt austerity can have detrimental effects on an individual's well-being and social life.

“For some people, spending money makes them happy. For me, I don't feel happy at all. Instead, I feel nervous and anxious when spending money,” said one Chinese woman who penny-pinched her way to purchase two houses in Nanjing. Despite her impressive assets, Wang Shenai does not join social dinners, only wears second-hand clothes, and has conditioned her husband to use outdated electronics products.

When her story made headlines last year, it lit up a debate among Chinese netizens over the value of extreme frugality, showing that the phenomenon manifests itself in societies across the globe.

There are plenty of resources that aim to help reign in shopaholics' worst impulses. Unfortunately, extreme frugality flies under the radar and is seldom discussed as a behavioral issue.

Going Extreme

Thrifty living has become increasingly popular in recent years with the rise of the FI-RE (Financial Independence, Retire Early) movement. As a result, countless bloggers, YouTubers, and social media influencers have sprung up to cater to this growing community, sharing savings hacks and lifestyle habits.

This reflects a generational change in spending priorities. Espousing principles like ‘nownership,' millennials have shifted away from the big-ticket purchases that acted as traditional status symbols last century. Research throughout the last decade has shown most millennials value experiences over possessions. The FI-RE movement has become a vehicle for young people to retire early and spend more time having those experiences that make their life meaningful.

Moderate frugality empowers young people to achieve their FI-RE goals. Moreover, it brings a distinct sense of satisfaction along the way. Yet well-balanced FI-RE advocates realize that saving is only one-half of the equation. Earning more and investing wisely is just as crucial if they are to grow their nest egg over time.

In contrast, the extremely frugal is weighed down by a scarcity mindset that views money as a finite resource. Consequently, extreme savers are prone to obsess over cost-cutting but fail to strategize on expanding their earning potential and increasing their income.

There are clear parallels between extreme frugality and another corrupted virtue: toxic positivity.

Just as extreme frugality denies spending of any kind, toxic positivity compels people to override all negative emotions, even when those feelings are genuine and justifiable.

There are social parallels too. For example, extreme frugality can deny people the chance to spend money to maintain social relationships, and toxic positivity can sap a person's empathy and cause them to be out of touch with others' feelings.

Frugal Fatigue Syndrome

Extreme savers often experience what is known as ‘frugality fatigue.' Unable to meet their increasingly tight budgets, burnt-out savers often indulge in desperate shopping sprees to rebel against their self-imposed austerity.

Last year, one finance writer, Katherine McLaughlin, shared her personal experience of frugality fatigue in a public post for Business Insider. After realizing how her fatigue-induced splurges were sabotaging her savings goals, she made a couple of changes.

First, she added ‘fun spending' to her budget and allowed a small indulgence once a week. By doing this, she was able to restore balance to her budgeting. This has made her saving more sustainable and increased her chances of hitting her goals over the long run.

More advice can be found in books such as ‘Die With Zero,' which teaches readers that the purpose of saving is to spend. Author Bill Perkins emphasizes the importance of getting off autopilot with saving and living your life so that money is used to make the most of our most precious resource – time.

The book emphasizes maximizing life enjoyment rather than wealth itself. Perkins encourages people to invest in their experiences and do so early because their value compounds over time. He describes memories as the ‘dividends' of experience as they unlock new levels of experience or can be re-enjoyed by sharing them with others.

Resources like these challenge the assumptions of the extremely frugal mindset and offer a different view on the value of money and life itself.

Directed towards a specific goal, frugality is a virtue that can unlock new doors. Yet it is a means to an end and not the end itself. The trick is to be self-aware enough to know frugality should be a pathway to a life of plenty and not a permanent state of affairs.

Tellingly, the Latin root of ‘frugal' is fruit, and that is what the practice brings with time – a cornucopia of nourishing wealth. Saving, after all, is hard work. It behooves us to tase the fruit of our labor while it's ripe.

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This post was produced and syndicated by Wealth of Geeks.

Image Credit: Pexels.

Liam Gibson
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Liam Gibson is a journalist based in Taiwan who regularly publishes in Al Jazeera, Nikkei Asia Review, Straits Times, and other international outlets. He also runs Policy People, a podcast and online content platform for think tank experts.