Saving money is a skill most people never master.
Some of us, on the other hand, master it so fantastically well that we struggle to pull back from it even if we want to.
There’s a unique problem I’ve found as wealth builds among the FI community.
I’ve dubbed this Relentless Saver Syndrome. And yes, I’m just making terms up now, because why not? 😁
In this post, we’ll explore what it is, and how it manifests itself. We’ll also look at where it comes from and practical steps on how you can combat it!
Let’s explore the scientific-and-totally-not-made-up definition:
Relentless Saver Syndrome is a behavioural disorder that can develop among personal finance enthusiasts. Starting as a passion for optimising one’s money and building wealth, it morphs into an overall reluctance to spend money, especially on ones-self, regardless of their financial position.
It’s having a strong financial situation, yet still thinking in scarcity. It often stems from feelings of guilt and anxiety around spending money, where you’re still worrying about small sums of money despite being relatively wealthy.
It’s when you’re still operating from an underlying mental state of fear and compulsion, rather than deliberate choice.
See, it’s one thing to have a low cost lifestyle because you enjoy it. And to not engage in certain things because you genuinely don’t value them. But there’s a crossover point, when the saving becomes more of a compulsion than an intentional values-based decision.
And remember, the context here is a long-time Strong Money reader, who is relatively wealthy and could likely semi-retire or even FIRE right now. Yet despite that, they still struggle with money-based fears and find spending uncomfortable, despite their situation.
In short, being overly frugal when it’s no longer necessary, and when it no longer serves you.
It’s when you’re forgoing or delaying activities you’d really enjoy to avoid higher spending. It’s when you buy the lowest cost item just because it’s the cheapest.
It’s when you would love to go out for lunch once a week, or visit your family more often, but something inside of you says no, because of the cost.
It’s when you keep drinking the nasty instant coffee rather than buying the one you actually like, because it’s 25 cents per serving cheaper, while your share portfolio just passed $750,000.
I think you get the point.
In essence, your decision-making framework no longer matches your financial situation. Your habits begin restricting you from the life you want to live.
Important side note: this only applies to a certain people, and I’m not promoting more spending for the sake of it either. This particular syndrome is one of inner-conflict and negative emotions. If you’re naturally a low-spender and your decisions are enjoyable and intentional, this doesn’t apply to you 🙂
Sometimes it comes from our upbringing. Sometimes it’s simply our practiced and now-ingrained habits.
A lack of resources and feeling of scarcity embeds itself in our brain. We get used to agonising over small amounts, and develop feelings of guilt around unnecessary spending.
And the tricky part is, this actually works. It’s a useful and functional habit.
In fact, aggressive saving and monk-like frugality is incredibly useful in the beginning of your wealth journey. All those small amounts across tons of little decisions really do add up and end up making a big difference.
But as time goes on, and your wealth grows, these small amounts naturally become less of a contributor to your overall net worth gains. That’s just how the numbers work. But when we operate from emotion rather than logic, it’s easy to overlook this.
Eventually, this can become problematic. Because when we finally find ourselves in a strong financial position, sometimes that same thought pattern and behaviour can’t easily be switched off.
It’s like your brain hasn’t caught up with your level of wealth. Your own mind fails to recognise the abundance you have.
For those who’ve built wealth through disciplined spending and smart investing, it can be tough to allow yourself to loosen up and spend more.
Even on small indulgences like dining out, or buying a nice piece of clothing you don’t necessarily need. These habits of restraint become second nature, making it hard to do anything else.
We tend to fixate on the extra money leaving the bank account. On the lost potential returns from investing that money. Or the well-known multiplier effect – where an additional $1,000 a year of spending means you need $25,000 in investments to cover it forever – AKA the 4% rule.
We also worry about lifestyle creep, the very thing we’ve masterfully avoided over the years that helped us accumulate the wealth we have today.
This is all perfectly understandable. But when you’re in a strong financial position – possibly even financially free – stressing over these smaller amounts often becomes counterproductive. Especially in the context of an increasing surplus or extra income after FI.
Why is this a problem? Well, at a certain point, this scarcity mindset will rob you from enjoying the peace of mind that money brings.
Besides, for readers of this blog – what the hell are you actually worried about?
You’ve proven you can manage and grow wealth. You likely have a bunch of backup plans you can call on. And depending on your age, you can probably even generate plenty more cash from a minimal part-time job if needed.
Relentless saver syndrome is one of the reasons the Anti-Frugality Brigade likes to suggest that a focus on saving is bad.
Like it’s a disease or something to be cured. You must only improve your situation by making more money, because, you know, think big and all that.
But the truth is, strong habits, once formed, can be hard to shake. Whether it’s spending, eating, or scrolling through social media.
But frugality is not the issue. It’s having a mindset with a fixation on restriction. It’s like someone who diets out of fear of gaining weight, rather than out of a desire for better health.
So, while it’s important to maintain perspective, remember to cut yourself some slack. If you’ve given a purchase careful thought, especially if it can enhance your life in some way, go ahead and enjoy it.
Operate from a place of freedom, not constraint. From abundance, not scarcity. From confidence, not fear.
On the flip side, if you’re feeling the compulsion to spend just because you have the money, pause. That’s not true freedom either. In that case, you’re simply conforming to external expectations rather than living by what genuinely matters to you
I’ve said this before, but it fits here too…
If you’re having trouble shaking off relentless saver syndrome, remind yourself that spending a bit extra on a few drinks, a weekend trip away, or a new shirt is such a small part of your overall wealth that it barely matters.
For example, if you’ve got $600,000 in investments, then a $600 purchase represents just 0.1% of that – far less than what your portfolio might change on a half-decent day.
From the Strong Money Survey, I know a good percentage of you are sitting on far more than that!
Now, I know this might seem to go against my usual advice that small amounts matter, but again, this is for those who are already financially secure, with a surplus and solid habits.
For those still building wealth, it’s crucial to analyse and optimise your spending. But at a certain point, it’s time to shift your mindset to reflect your changing reality.
Because the whole point of building wealth is the freedom it grants you. That includes the mental freedom to relax and not worry about money.
It means having the mental and practical flexibility to spend more if you feel like it, or spend less if things aren’t going as well as planned.
If you “get it” in theory, but are struggling to practice it, what can you do?
We’ve discussed shifting your mindset with the magic of perspective.
But how do you shift your behaviour? With small, achievable actions – the same way you would any habit.
It doesn’t have to be drastic. Just start small, and push yourself beyond your typical frugal choices. Don’t worry about how small the decision is – breaking the cycle is the most important thing.
This works best when you pick an area of your life that you care about. That could be buying better quality groceries, nicer furnishings for your home, going to more events, travelling, or buying treats for your kids/pets.
Another method that might help is a mental accounting trick. Slice off a small amount of money for extra spending each month. Start a separate account for this purpose. Rather than automated saving, this is automated spending.
Because it will feel so unnecessary, think of this amusingly as your Rich Person Spending Account. Maybe you start with just $50 or $100. And the money can only be used for some sort of enjoyment.
Even just thinking about it in a different way like this can take the seriousness out of it. Then, to calm any nerves, zoom out and compare the amount relative to your net worth. You’ll end up laughing about the size difference.
From there, you’ve essentially broken the spending = bad mindset. That connection in your mind will be severely weakened. Then you can increase your Rich Person Spending Account slowly as you get used to it and your wealth allows.
This activity will break the life-limiting habit and help you shift towards a more abundant mindset.
Remind yourself that these extra purchases don’t derail your finances. In fact, they form part of the reward for your discipline over the years.
Here’s a few more suggestions for those of you who’d rather the spending was a little more ‘justifiable’, taken from my post on how to spend more and still become richer.
You could:
Spend on convenience to save time. Getting groceries (and other things) delivered. Outsourcing certain household tasks so you can spend time elsewhere.
Spend on greater quality. Clothes that last longer. Appliances that are more efficient. A home of a higher standard.
Spend on travel and experiences. Visit family more often. Explore those places you’ve always wanted to go.
Spend on health. Taking exercise classes or hiring a coach or trainer. Getting massages or spa treatments. Having a personalised nutrition plan made up.
Spend on generosity. Donating to charities, causes or groups you care about. Gifting to children or family.
It’s important to balance all this stuff with your own personal tastes around lifestyle and the purpose of money.
Sometimes we need to shift our mindset and our habits if they become more compulsive than deliberate.
True financial freedom means having control, strength, and balance – knowing when to save and when to spend, allowing both to enrich your life.
Imagine spending years building wealth only to feel trapped by your own mind, unable to enjoy the life you worked so hard to create.
See, this isn’t just about money. It’s about mental peace, deliberate intentions, and your personal happiness.
Zoom out and think about how you want to live when you’re financially free one day. Not just your lifestyle, but your mindset and emotional state.
How do you want your life to be? How do you want to be?
My guess is that your ideal self isn’t fretting over small dollar amounts and struggling to enjoy the fruits of their labour, as the portfolio continues to tick higher and they’re drowning in dividends.
You want to be a relaxed and happy individual, with the mental freedom to do whatever you want.
Have you experienced this issue or know someone who does? What are your thoughts on this topic? Let me know in the comments.
Here are some resources you may find useful on your wealth building journey:
Mortgage broker: My personal broker of 10 years is More Than Mortgages. Highly rated and award winning, Deanna and her team been super helpful over the years and can assist with anything home loan related, including refinancing and debt recycling.
Sharesight: A great portfolio tracking tool for share investors, and free for up to 10 holdings. It tracks all dividends, franking credits and capital gains, which is incredibly helpful at tax time. Saves me a lot of time and headache!
My book: After 5 years and hundreds of articles and podcasts, I decided to distill everything down into an easy to follow book. Designed as a complete roadmap to achieving financial independence and retiring early in Australia. Available in paperback, ebook, and audio.
Just so you know, if you choose to use these resources, this blog may receive a financial benefit at no extra cost to you. Thanks in advance if you do. And to be clear, I only ever recommend things I use myself and genuinely believe in 🙂
My thoughts on a behavioural trap I see in the FI community, how to recognise it and how to fix it. Far more common than you might think, and it can prevent you from enjoying the wonderful wealth you’re building.
Lizzie changed her career, moved location, sold her home and switched investment strategy. Now she’s looking to semi-retire in her 30s.
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For us, a budget works. Without one, I would never be able to justify the expense of a holiday. Instead, we put an amount away every month and spend it without worry, knowing all of our other expenses are covered in the budget. We also each have a personal allowance – to be spent any way we want, with no negative comments allowed from the other person. We include a “flex fund” in our budget that can be used to cover any unusual expenses. We also have accounts for home maintenance, auto repairs, and holidays/birthdays. Knowing we are covered for almost any eventuality helps us relax and spend without worry.
Budgets are your best friend when starting out the FI journey, and once you’ve attained it. Very good advice for someone like me who likes budgets. Thanks for the reminder.
The one column missing from my current budget is “personal allowance”. It’s been screwed down so tight that any extra money coming in goes to “family fun”, which is our holiday budget. So we have great holidays, but I never have anything to wear…
Interesting approach – I like it, thanks for sharing!
Great article and I recognised a few friends and family members in it!!! As you pointed out, the message is different depending on your financial situation. As a happy FIRE-y, I am embracing loosening the purse strings but within my comfort zone! I still look out for bargains on high end items and now travel Business class on long haul flights. I have increased my charitable donations and I don’t hesitate to continue enjoying life both financially and non-financially. To quote a well-worn saying “I don’t want to be the richest person in the cemetery”!!
Great examples of adapting your approach as your situation changes to spend where it matters to you. Cheers Rita
Great article, I can relate to it. I continue to challenge myself to have an abundance mindset. It helps that my husband has a more abundant mindset (“champagne upbringing” versus “home brew”). For instance when we started planning our mini-retirement of 4 months to travel in Sth America. My initial default thoughts were that will be a lot of money that could be invested in the market. I had to re-frame and say we can afford to do this and we do not need to invest as much now. Investing in experiences is what we want on our FIRE journey too. One funny example was I was happy to not go to Galapagos Islands as that was going to cost a fair bit (about an extra 10K), but then realised this could be a once in a life-time experience for us. I will let my frugal self find ways to optimise costs for our trip 🙂 and I will also allow my abundant self to say yes to amazing adventures.
Thanks, and great to hear you’ve been able to catch yourself in those ‘default’ mindset situations.
It’s true some of those experiences are going to be hard to put a price on. It’s all relative and proportional, but having a bigger portfolio balance at the end of our life probably isn’t going to stack up against some of the things we coulda woulda shoulda done.
Hi Dave ,That is me to a tee! Retired in my late 60’s, came from nothing. My parents came
came to Australia with just a suitcase
I am always still trying to save a dollar even though we have a comfortable retirement.
It’s a hard habit to shake, don’t know if I ever will
Also, have a very wealthy friend with the same back ground and same habits.
Hey Tony, I can definitely appreciate that. The longer we’ve done something the harder it is to pivot and do something else. I’d say if this is something you think could actually improve your life by loosening things just a little, start with very small amounts just to break the cycle and go from there.
the finance industry thrives on frightening people with the idea that you don’t have enough and these messages repeated often enough add the motherload of fuel to an already ingrained habit of saving and the endless well of scarcity mindset.
100% well said Josh. Hopefully writing like this can connect with a few people to begin changing their mindset a bit at a time and break free from that scarcity oriented approach
A thoughtful article Dave. Thank you! Mindset is everything isn’t it?? You could write your second book entirely around mindset. I definitely recognise a bit of myself in the relentless saver, possibly to the detriment of other facets of my life. As your other commentator noted, we’ll be a long time dead…
It really is Jeff, as cliche as it is to say! The second book will actually contain this topic and many like it, since I’ve noticed that the challenge isn’t so much building the wealth but actually learning to enjoy that wealth and pivot into a new life.
We can all fall into this to some degree, it’s just a matter of recognising your thoughts and behaviour patterns and seeing if it’s really serving you well or not.
There is already terms for it. Most common is, “tight arse” or “cheap”.
Seriously though, we all know money is a tool to get good things. That’s all. Actual money gets devalued every day and of late it feels like it gets devalued by the hour. Best thing to do is to spend it or invest it. That’s all it’s good for. Look at the images of Germany during the war. People had wheelbarrows full of money. Notes were just lying everywhere around the street. Buy that Porsche if you want it and you have the money. Fly to Paris and treat your family. You might not be able to get it tomorrow. Stop living like you’ll never die, because you will.