Miser or Spendthrift? As Always in Life, Balance is Key

Perhaps you know someone who sneaks food into movie theaters or can't resist checking the coin returns of vending machines for a possible windfall. Conversely, you may know someone who spends without a second thought.

What's your spending persona?
It's important to know. Excessive spending may prevent you from reaching your goals. If you live paycheck to paycheck, which many Americans do, you could find yourself in financial straits if an unexpected expense should hit. And what if you're a cheapskate? Protecting your hard-earned money is one thing, but are you missing out on the joys of life because you're too busy clipping coupons?

Let's say you're a bona fide cheapskate. You're aware of this because family members titter at, or are even embarrassed by, your frugal ways. Maybe it's time to take a look at how fanatical you are about conserving money. Do you save aluminum foil after it has been used? Are you willing to drive 25 miles out of your way to avoid paying an ATM fee? Do you eat dinner at 3 p.m. to get the early bird discount?

As much as you may hate to part with your money, remember it's also important to enjoy the fruits of your labor. Remember, too, there is a difference between a cheapskate and a frugal person. Frugal people are not afraid to spend money. They just insist on getting maximum bang for their buck. They shop around to get the lowest price. They time their purchases whenever possible, like waiting until September to buy a new car. A frugal person is more likely to calculate the cost of driving 25 miles out of their way to avoid the ATM fee and determine the $1 fee may be worth their time and gas.

If you're on the other end of the spending spectrum, has it ever occurred to you that maybe you're spending too much money and not saving enough? True, nobody could ever accuse you of being a cheapskate, but you admittedly don't do much with your money — except spend it. It could be time to address your spending habits. Excessive spending may prevent you from retiring.

Perhaps you fall somewhere in the middle. I think this is where most of us would like to be. In this financial nirvana, our savings and spending habits are solid. We enjoy making money, saving it and spending it. We seek value in our purchases, but we don't mind paying full price for something we really want, and we like getting a great deal. We save regularly, if only just a little.

As always in life, we should strive for the perfect equilibrium. "Everything in moderation," my mother often opined. Perhaps you saw the article earlier this week about a retired school principal from Dallas who lived a reclusive and extremely frugal life — once even sending her housekeeper back to the store because she forgot to redeem a 5-cent coupon for chicken noodle soup. Turns out her estate was worth $2 million.

I don't want to be known as one of the recluses who died with millions of dollars but forgot to live life. I also don't want to be the person who is still laboring at age 80 just to make ends meet. Good planning and good sense during the peak wage-earning years can ensure neither scenario comes true.

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