The Hidden Cost Of Being Frugal No One Talks About
In this episode of Building Your Money Machine, Mel Abraham argues that extreme frugality, especially when driven by fear, creates a hidden cost that erodes life satisfaction. He opens with a hospice study showing that people’s top regrets are not about money but about not living true to themselves, and he shares personal anecdotes—his mother’s regret of not being present and a client named Sandra who hoarded wealth but missed experiences. Mel distinguishes between wise frugality (resource‑conscious) and fear‑based scarcity, describing how the latter builds a neural pathway of deprivation that compounds like negative interest. He critiques the FIRE movement for turning financial independence into a form of imprisonment, noting that many who hit their FIRE number lack the skills to enjoy life because they spent years denying pleasure. He introduces practical “shifts”: (1) recognize frugality‑driven scarcity, (2) see FIRE’s potential to imprison, (3) acknowledge experiential regret, (4) embed “joy points”—intentional, values‑aligned spending—into financial plans, and (5) adopt contrarian truths such as savings rate not equaling freedom, the opportunity cost of not spending, and the highest‑return investments being non‑ticker assets like experiences and relationships. He promotes a both/and mindset: continue building a money‑machine while simultaneously living a rich, purposeful life, using tools like his Freedom Number Calculator and a structured wealth‑priority ladder. The talk ends with a call to integrate intentional joy into daily financial decisions, emphasizing that money is a vehicle for a meaningful life, not the end goal.
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The hidden cost of being frugal that no one talks about, and it might be costing you way more than you think. You know, a palliative care nurse spent years asking dying patients about their biggest regrets, and the number one was not living a life true to themselves. Number two was working too hard. So you know what didn't make the list? I wish I saved more. If you've been doing everything right, cutting expenses, maxing out the accounts, saying no to the things that you actually want, and you still feel like something's missing, you're not crazy. You might just be building a big bank account, but a bankrupt life account. This is Building Your Money Machine, where we help you master your money, eliminate financial stress, so you can live a life of choice. Because earning more doesn't make you free, a money machine does. And I'm your host, Mel Abraham. And after 30-plus years as a CPA, an entrepreneur, and a money mentor, and one who has walked this path to financial freedom From nothing to something, broke it, rebuilt it. I learned something about real wealth, and it isn't about bigger numbers. It's about bigger and better choices. And if you're ready to make them, let's jump in. The hidden cost of being frugal. And no, I'm not talking about what you think I'm talking about. I'm not here to tell you to stop saving. I'm not here to tell you to blow up your money on stuff that you don't need. I'm not here to tell you to stop your lattes. I'm here to tell you that some of the most financially responsible people I've ever worked with are living the smallest lives. And that cost, it never shows up in the balance sheet. It never shows up in the bank account because here's what nobody in personal finance wants You know, wants to say out loud, money was never the goal. Life is. And if you can't find joy in the journey, I promise you there will be no joy at the destination. And let's break it down for you. I'm gonna break down some shifts to think through. And the first shift is this: the frugality can break you. And so I was watching a video recently where the speaker was talking about how people worry about spending too much, but almost nobody worries about saving too much. And that hit me because I've seen this play out hundreds of times. And there's a version of frugality that's driven by wisdom. And then there's a version that's driven by fear. And most people, well, they can't tell the difference. I couldn't. They think that they're being disciplined, but what they're actually doing is developing and building a habit of lack, scarcity, scarcity thinking. And let me tell you what I mean by this, because I've worked with people over the years who fall in what I call the saver personality. And look, the saver is like the superhero of financial prudence. Cautious, disciplined, always building that safety net. But even superheroes have their kryptonite. Okay. And for savers, It's that their conservative nature holds them back from growth opportunities. And here's the big one, from ever enjoying the richness of their life. See, they never get to the richness of their life because of it. I literally had a client, Sandra, who came to me with a solid net worth. On paper, she was crushing it. But here's what she told me, Mel, I haven't taken a vacation in 7 years. I haven't bought myself anything nice that I can remember in I don't know how long. Okay. And every time I think about spending money, I feel physically sick. Sandra didn't have a money problem. She had a money symptom. The real issue— fear. Fear it would all go away. Fear she'd end up like her parents who lost everything. So she held on so tight that her money became a prison instead of a pathway. And here's my contrarian take on this. Frugality taken too far is just scarcity wearing a badge of honor. Think about it for a second. When you're constantly saying no, no to the trip, no to the course, no to the dinner with friends, no to the experience, you're not building wealth. You're building a neural pathway of deprivation. You're training your brain that there's never enough. And that you're not enough, and that the world is something to protect against instead of something to participate in. And that habit, it compounds just like interest, except in the wrong direction. All right, shift number 2, the fire that burns you, I call this. Now, let me go somewhere that might ruffle some feathers because I want to talk about this idea of the FIRE movement. Financial independence, retire early movement. On the surface, I love the idea, okay? Who wouldn't want financial independence and to retire early? That's literally what I teach. I wrote a book about it, you know, it's called Building Your Money Machine. So we're on the same team when it comes to the goal. But here's where I break with a lot of that FIRE crowd, and this is my honest take. In many cases, the FIRE movement is turned financial independence into a financial imprisonment. Stay with me on it for a moment because the traditional FIRE playbook says, earn as much as you can, save 50 to 70% of your income, live on rice and beans, cut every expense to the bone and retire as fast as humanly possible just to get to your number and then start living. So what are you doing for 10 or 15 or even 20 years it takes to get you there, you're not living. You're enduring. You're white-knuckling your way through the best years, hoping that someday there's gonna be this magical moment where you finally feel free. Here's the problem. If you spend a decade training yourself to deny every pleasure, to say no to every experience, to squeeze every dollar until it freaking screams, you don't just magically flip the switch on the other side and become someone who knows how to enjoy life. You conditioned yourself into scarcity and a scarcity identity. I've seen it. People hit their FIRE number and then nothing. They don't know what to do. They don't know how to spend. They don't know how to live because they spent their entire accumulation phase learning how not to. That's not freedom. That's just broke with some benefits. Now look, does FIRE have some great principles? Absolutely. Building assets, Not being dependent on a paycheck, creating financial independence. That's the money machine thinking. I'm all in on that. That's, that's cool. But here's the piece they miss. In my book, I talk about the difference between richness and wealth in life. Richness in experiences and feelings and how you're living life. Money is the vehicle, the fuel. It's a tool. It's the paintbrush to paint the masterpiece called your life. It's energy. And when I give my money a greater purpose, my money gives me a greater purpose. The FIRE movement often gets the wealth part right, but misses the richness part entirely. And here's the truth nobody in the FIRE subreddits wants you to hear. Destination joy alone doesn't fulfill you. You can't defer all your happiness to some future date and expect it to be waiting there open arms. Like, life doesn't work that way. Joy is not a lump sum, it's cash flow. You need it showing up regularly or you go emotionally bankrupt long before you hit your number. Okay? Shift number 3, my mom and the regret nobody expects. This one's important. I wanna get personal for a moment because this isn't just theory for me, it's real. You know, when my mom passed away, we lost mom almost 2 years ago, She had regrets, but they weren't the kind of regrets you'd expect. She didn't regret the things she didn't do. She didn't regret the trips she didn't take or the things that maybe she didn't buy. She regretted what she didn't appreciate while she had it. Let that land for a moment. Okay? She had a life. She had love. She had a family around her, but somewhere along the way, the worry about money, the tightness around spending, the comparison that was going on, The constant fear of what if, it kept her from being fully present in the life that was right there in front of her. And when she looked back, when it finally registered with her, what broke her heart was not the absence of things, but the absence of presence. And that wrecked me because here's what it taught me. The biggest cost of extreme frugality isn't financial. It's experiential. It's relational. It's the moments you were physically there for but not emotionally there. You were absent because you were too busy worrying about money or worrying about what might be missing versus what is there and actually living life in the moment. You know, Bronnie Ware, she wrote a book called The Seven Regrets of Dying. And she spent years in palliative care, people on hospice, taking care of them in their final days. And she wrote about the top 5 regrets. And the number one was, "I wish I had the courage to live a life true to myself and not a life of others that expected of me." And number two is, "I wish I hadn't worked so hard." Nobody on their deathbed said, "I wished I saved more." Nobody says, "I wish my account balance was bigger." They say, "I wish I had been there, really there for the moments that actually mattered." See, that's the hidden cost of frugality that no balance sheet is ever going to show you. And that's why I say money is not the goal. Life is. And the purpose of the money machine isn't to build this biggest pile of money and all that stuff. It's to build a life that is so rich in meaning and experience and connection that when you look back, you have no regrets and you say, man, that was a good run. Not about what you didn't do. And not about what you didn't appreciate. All right. I hope that's starting to hit. Now, listen, I get it. You might be sitting there going, okay, Mel, I hear you, but I don't even know what my number is. I don't even know how much I need. I gotcha. I got you. I have a tool called the Freedom Number Calculator, and I'm going to hook it up here for you where you can go in, put some numbers, at least get a ballpark of where you need to be to give you the financial freedom you want. Your number. Based on your life to make it happen. You can go to melabraham.com/number, but we'll link it up for you to grab it for free. All right, now shift number 4, joy points. And this goes along with shift number 3, the missing line item that is in your financial plan. Most financial plans are just columns and rows and numbers. Now here's the problem that I think people don't realize is that we are deferring all of our joy to some future date. And what's the fix? And we've said this before, it's this: joy points need to be part of the plan. Not a reward for reaching a finish line, but the thing that fuels your journey. Think about it like this. You wouldn't drive cross-country and refuse to stop for gas, food, or a restroom just because, "We'll take care of it when we get there." Okay? You don't. You'd break down before you arrived. And it's insane. Okay? But yet, That's exactly what extreme frugality and that kind of mentality is doing with their lives. And research backs it big time. Okay. There was a study in Cornell that went on for 20 years and they found that people get more lasting happiness from experiences than from material stuff. But here's the kicker. The researchers also found that the people don't regret the things they bought. They regret the experiences they missed, the trip they didn't take, the class they didn't sign up for, the dinner that they maybe skipped to save $40. And there was another study, though, that this one across 7 countries where 200 people were each given $10,000. And the people who spent money in ways that made them genuinely happy, huh, they had a greater overall wellbeing, not just in the moment, but 3 and 6 months later. So here's what I want you to get. Strategic spending on things that align with your values and vision is not the opposite of savings. It's a complement to it. It is why I tell people to find the visceral joy points, the things that are meaningful to you, and put them into the plan. Not the impulsive momentary pleasures that you find on Instagram or media or social media or through comparison, but what really means something to you. And so you start to look at it. Okay. My money's purpose in my life is to help people connect, help me connect and create while serving people, missions and causes that align with me. Every financial decision runs through a filter of that. So when I spend money on a trip with Stephanie, that's not a leak in my budget. It is a deposit into my life, the life that I'm building. When I invest in a course or a mastermind, that's not an expense. That's the fuel for my money machine. Now we gotta do it responsibly, not bury ourselves in debt. But the difference is I'm not spending recklessly. I'm spending purposefully. There's a canyon-sized gap between mindless spending and intentional investing in your life. And here's the question I want you to start using before any financial decision. Okay? Ask yourself this: does this make my world bigger or smaller? Not richer or poorer, bigger or smaller. See, if something expands your joy, your growth, your relationships, your future, it may be worth far more than the money you'd save by skipping it. All right, shift number 5. Now, these are some contrarian truths I want to hit on. Okay, let me give you some of these because they might mess with your financial worldview, but I think they're really important. And the first contrarian truth here is this: your savings rate is not your freedom score. The personal finance world has turned savings rate into a vanity metric. I save 60% of my income. Well, that's great. Okay. But are you living? Okay. Are you growing? Are you showing up for the people you love? Because a 60% savings rate with 0% life satisfaction is not winning in my book. That's not a plan. That's a prayer. That's a spreadsheet. That's just a statistic. Okay. Number 2, contrarian view. Not spending is a form of spending. See, this one's going to mess with people. But when you think about it, every dollar you don't spend on an experience, a relationship, a growth opportunity, there's an opportunity cost. You're spending that dollar on nothing. Or worse, you're spending it on the illusion of safety. And I've shared this before, decades ago, I got scared. I was at an event. I heard some doomsday talk about finance and the economy and all this. I walked out in the lobby and I called my broker. And I said, put me in cash. I'm done. My fear literally pulled me out of the market. And you know what that fear cost me? I literally sat on the sidelines for over a decade and it cost me millions. Had I just kept doing what I was doing at the time. Okay. And that's what would've happened. The fear is the most expensive currency there is. And chronic frugality, That's just fear dressed in a different outfit. Okay. Number 3, the best investment you can make might not have a ticker symbol. Okay. See, we're conditioned to think of investing as stocks, bonds, real estate, and yes, those are the engine of the money machine and they absolutely matter. But some of the highest return investments I've ever made were in myself. A mastermind that connected me with people, the right people. A trip that gave me space to think clearly, to share life with my wife or my son and his wife and the grandkids. See, those don't show up on a brokerage statement. They don't show up on a financial statement, but they compound in ways that nothing on Wall Street can ever match. Number 4, the person who dies with the most money, they didn't win. I know that sounds obvious, but the way most people behave with their money tells a completely different story. We hoard, we protect, we defer, we delay, as if the goal is to have the largest possible number on the screen when we take our last breath. The goal is not the number. The goal is the life the number makes possible. It's not about the money. It's about the life. If your money stops when you do, you're not free. But if your money stops mattering because you already lived a full, rich, purposeful life. Now that's a real win. Okay, so let me bring this home because I don't want you walking away thinking that this is a permission slip to spend wildly. It's not. And I don't want you thinking that you should just stop building wealth. This is not the different thing. You are supposed to— you absolutely should keep building, building that money machine. What I want is for you to hold two things at once. Be the builder and the liver of life. Have a money machine and a full heart. Save for tomorrow and live for today. I call this a both/and approach. It's not save or spend. It's save and spend with intention, with purpose, with your vision, with your values as the filter. Build the machine, automate your investments, do the right things, follow the wealth priority ladder, get your needs covered, then your lifestyle, then your income replaced, then your full vision funded. That's the structure. But inside that structure, design joy, schedule the experiences, create the memories, live in the moments while you're in them. Don't wait until the end to appreciate what you have right now. Because I think about my mom and I think about what she would tell you if she could. And I think she'd say, don't wait. Don't wait until the account is big enough. Don't wait until the kids are grown. Don't wait until you retire. The life is happening now. And the only thing worse than not having enough money is having plenty of money and an empty life. See, the accumulation of wealth for no purpose other than to stockpile assets, man, that's an empty pursuit. I wrote that in my book and I believe it with everything I have. Give your money purpose, give your money a why, and then let it take you somewhere beautiful, not just financially, but in every domain of your life. Build the machine and live the life, not one day, but today. All right. So let's recap what we've covered. Frugal, frugality driven by fear. Doesn't build wealth. It builds a habit of lack. The FIRE movement gets the goal right, but often gets the journey wrong. Joy is not a lump sum. It's a cash flow that needs to show up throughout your plan. And the biggest regret isn't what you didn't do. It's what you didn't appreciate while you had it. And the best financial plan is one that builds wealth and a rich life at the same time. Listen, If this one hit home, hit the like button. If this one hit home, share it with people that actually matter. I'd love to hear from you. I'd love to understand which one of these kind of hit home for you because this is the core of everything we do. If all I did was to help you build a big bank account, then I failed. But if in the process of building that big bank account, you built a rich life account, then I did what I'm here to do. All right. I hope that this means something to you, and I hope that you'll take it to heart and look at things in a different view, in a different way, and live fully each and every day. All right. Because I believe financial freedom is your birthright, but that birthright is meant to give you the life that you deserve, the life that you envision. All right. Till I get a chance to see you in another one or on the road or out there speaking or on your path to financial freedom. As I always say, always, always strive to live a life that outlives you. I'll see you in the next one. Cheers for now.
