This article is by staff writer Kristin Wong.

At another site, I recently wrote about a tool that shows you online prices in terms of hours worked. I used a random item — a fancy coffee maker that costs $116 — as an example. It would take someone who earned $38 an hour approximately three hours of work to pay for that item. A reader replied that, if they made $38 an hour, they wouldn’t waste their time thinking about whether or not the purchase was worth it.

To me, this was a spot-on definition of lifestyle inflation, summed up perfectly in one simple comment.

Someone who makes $38/hour earns about $79,000 a year. This is quite a decent living, but it is not enough to stop thinking about your spending altogether, without experiencing some consequences. But that is what happens with lifestyle inflation: You earn more, you spend more, and your spending ends up matching your earning. It’s why some people fail to build wealth despite that they rake in the big bucks. It’s why some people that earn six-figures still can’t seem to dig themselves out of credit card debt.

On the other hand, I understand the spirit of the comment. When I was a little girl, we worried about money so much that I knew I wanted to be rich when I grew up — not necessarily for all of the material things I could buy, but for the freedom from financial worries. I am still working to get there, but I have experienced at least a little of that freedom. And I gotta say, it’s nice not to have to worry about every single purchase. Then again, if I threw caution to the wind with too many purchases, I would end up losing that freedom.

We could go back and forth on this all day. The point is, there is a balance between frivolous spending and wasting your life worrying about money. But how do you find that balance? Here’s what works for me.

Focus on savings and net worth rather than income

I have seen a few personal finance writers discuss this, and I dig the idea. Former GRS staff writer, Sam at Financial Samurai, argued that, while your income might determine your net worth, what really matters is what you keep, not what you make.

Similarly, I have written about how my budget is more focused on savings goals than spending percentages. I make certain annual goals that I feel comfortable with and, as long as I continue to meet those goals, I am happy with my budget. I find that it is much more motivating to save based on my bottom line than a percentage of my income.

This isn’t to say that I don’t care how much money I make or how much money I spend. I just see both as a means to an end — the end being how much money I keep.

Set boundaries to keep spending in check

I don’t want to waste my time over-thinking about money. But I also don’t want to waste my money by not giving it enough thought. My solution? I set limits.

When I go out shopping, I often find myself mulling over a purchase. If I’m truly stumped over whether or not I should buy something, I stop and consider the price. If it costs less than $5, I stop thinking and just buy it. If it is more than $25, I immediately put it back.

If it’s somewhere in between, I give it a few more minutes of my time. But if I’m thinking about it for more than 10 minutes, I put it back. Your rules and limits may vary. I tend to err on the side of being frugal. But overall, it is about finding a balance between your time and money.

If I make the wrong decision, I am either:

a) only out five bucks, or;

b) bummed, because I passed up a good deal.

Either way, I know that I will be just fine. I can recover from a $5 budget blow. And good deals pop up all the time. I still saved some time and some mental bandwidth.

Not having boundaries, on the other hand, means always assuming, “Eh, I’m rich. Why bother considering if this $100 purchase is worth it?” Do that enough, and your net worth will remain stagnant — or worse, it will diminish.

Fine-tune your frugal energy

A lot of people want to completely toss out frugality when they start to earn more. That’s a good way to close the gap between your spending and your income — which leads to lifestyle inflation.

At the same time, I have to admit, I am a lot more frugal when I’m worried about my finances. When I lost my job last year, for example, I went into full-blown money-saving mode. I reconsidered every purchase. I spent way more time on different money-saving habits. That worked well for me at the time, but now that things are a little more steady, I have kept some of those habits at bay. When I was out of work, I used to spend time searching for coupons. Now that I’m working so much, I don’t really want to waste any time on that. So I have learned to fine-tune my frugal energy.

Rather than haphazardly save money on anything and everything, some experts say it helps to focus your frugality on the largest expenses in your budget, which are usually:

  • Housing

  • Transportation

  • Food

This makes a lot of sense because saving in your spendiest areas, theoretically, is going to benefit you the most overall.

But I would argue that it’s not a waste of time to save in other areas too. Smaller expenses can add up, after all. You just have to decide whether a frugal habit is worth your time. Driving across town to save a dollar on gas? Probably not worth your time. But taking a few seconds to search for a coupon code when you are shopping online? That seems like a quick and easy way to save a few bucks.

There are a lot of no-hassle ways to be frugal too. I’ve written about some of these in my post on “Painless ways I save money in every category of my budget.” For example:

  • Pay your car insurance premiums up front.

  • Install smart power strips.

  • Use price-matching browser extensions for online shopping.

If you focus on the easiest and most lucrative ways to be frugal, you will do well to keep your spending and time in check.

Personally, I like the concept of being frugal, and I probably always will be frugal, whether it is out of necessity or not. But I also work really hard for the freedom of not having to stay up at night being sick to my stomach about money. I guess I am somewhere between fretting over a $5 purchase and plopping down $116 for a coffee maker without thinking about it. And that’s a pretty broad middle ground, really. To me, finding the balance has everything to do with meeting my goals, feeling secure, and doing everything I can to improve my net worth. Only then will I be able to enjoy that sense of financial security.

GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, and more.