How Saving Money Cost Me Money

I used to have a savings problem. But not in the way that one might think.

For years, when payday would come, I would budget a ridiculously large percentage of my paycheck for savings. I left myself very little for bills and practically nothing for shopping, eating, entertainment — the things I vaguely dubbed “nonessentials.” I was determined not to live beyond this budget.

Well, I sorely underestimated my love of “nonessentials.” And it cost me, because I would inevitably overspend, even as little as $10. Which doesn't sound so bad, except that, after saving all of my money, I had nothing left in my checking account and would thus incur overdraft fees. At one point, a $2 purchase spiraled into $300 dollars of overdraft fees.

My reasoning was this. My savings account was with a different bank that offered a higher interest rate. Yes, it occurred to me that the $2 in interest was ruled out by my $35 overdraft fee. But I kept convincing myself that the fee was only that month. I wouldn't let it happen again. But of course, it did happen again. And again. It wasn't just overdraft fees. There were other financial decisions I made — in the spirit of saving money — that ultimately cost me.

I was so obsessed with saving, I was making unreasonable goals and ultimately setting myself up for failure. I desperately wanted to see all of my money in one place. Having $1,500 in checking and $5,000 in savings wasn't enough. I wanted the instant gratification of seeing $6,5000. I would leave myself nothing just so I could see that number. Like I said, it was an obsession. I admit: I also wanted to get rich slowly as quickly as possible.

Here's the history of my savings problem. I love to shop. Always have. While I've learned to curb it, it's a struggle. My solution was to replace shopping with another activity that gave me a sense of self-worth. That activity was saving money. I figured using the antidote would solve the problem, but I was merely putting a band-aid on it. I had to learn the first tenet of the Get Rich Slowly philosophy: Money is more about mind than it is about math.

Recently, I talked to my mom about this. She mentioned that my father had been on a money-saving kick, putting nearly everything into his savings, much like I'd been doing. My father had become increasingly depressed, and having never suffered from depression, he had no idea why. Eventually, it came to him. He had zero in his checking account, intentionally. He was scrambling to outrun overdraft fees and also make sure he had just enough to pay the bills. Maintaining a zero balance is not just stressful, it's bleak. My mom, in her infinite simplistic wisdom, asked: If your money is costing you peace of mind, why are you saving it?

Simply put, saving money is great. But like any obsession, it can sometimes end up costing you. Here are a few specific lessons I learned from my money-saving sprees.

  • Cell phone bill : When I was in college and signed up for my first cell phone plan, I had the cheapest, most utilitarian plan possible. Something like 100 minutes a month for $19.99. Yes, it did occur to me that I talked on the phone probably in excess of 1,000 minutes a month. No problem, I thought. I'll use it for emergencies only. Ha. Needless to say, over the months, I ended up paying more in over-usage fees than if I had just upgraded my plan.
  • New checking accounts: On the advice of a friend, I once got sucked into a “new checking account” offer that had an awesome points program for travel. I signed up and could already see myself sipping a 2 oz. bottle of wine at 40,000 feet. But the switch threw off all of my auto-pay bills, making it a huge headache, and the points program ended before I even had a chance to redeem any of them, making it a complete waste of time. Add that to the fact that this particular bank had the worst customer service I've ever experienced, and it cost me not just money but hours on the phone. There are reasons for switching checking accounts. A possible free flight isn't one of them.
  • Bank fees: When I went back to my old bank, they did something that was very unlike them. They started charging me a monthly maintenance fee! They told me there was nothing they could do about it, unless I kept $1,500 in my account each month. It's like they were holding my checking account for ransom! But I did have $1,500?in my beloved savings. I hate taking money out of my savings, but it only made logical, financial sense to do it. There was no point in having a separate savings if I was spending $12 each month and only making $2 in interest. A no-brainier for most, but for compulsive savers, it's a very conscious decision, and seeing your savings account less $1,500 hurts a little.

I'm not suggesting living beyond your means or giving in to overindulgence. But it's also important not to go to the other extreme and save beyond your means. The lesson I learned: it's nice to have the instant gratification of seeing a big number in your savings account, but slow and steady always wins the race.

More about...Psychology

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Nicole
Nicole
8 years ago

Great post! It reminds me of the section in the Elizabeth Warren book about the subset of people who aren’t allowing themselves 20% for wants and who are miserable. Having that freedom helps with actually doing the saving. And it’s great to be looking at things beyond mental accounts. Right now I’m losing a little money because our checking account for some ridiculous reason has a higher interest rate than our savings account at the same bank, but I have our summer money (we don’t get paid until October) in savings rather than checking because that’s how I know if… Read more »

A-L
A-L
8 years ago
Reply to  Nicole

I know. It kills me that the best interest rates right now are with checking accounts. But those rates only come with using the debit card a certain number of times, which is not how I want a savings account to work. So right now we keep the amount needed in checking to maximize interest (they only give it on a certain amount…currently $10k but about to drop to $5k, so we’re thinking of switching banks that has a lower interest rate but gives it on up to $25k), and the rest in savings. But it’s a constant mental struggle,… Read more »

Emma
Emma
8 years ago
Reply to  Nicole

Are you me?! I also don’t get paid until October, and keep the summer savings in a lower interest account so I can ration out my monthly spending better. I move the designated amount per month into checking at the beginning of each month.

Luis
Luis
8 years ago

People first, then money. I feel shopping is still an issue? Would be a good suggestion to see a professional counselor.

Get Rich Point
Get Rich Point
8 years ago

Your case reminds me of those obese people who want to get slim as soon as impossible and then put on an impossible diet plan. This diet program squeezes them so much that the only thing they think of is food. The moment the diet plan is over they devour as much food as possible and then they don’t understand why the diet plan is not working. However, in your case you have understood. Congratulations.

Becka
Becka
8 years ago
Reply to  Get Rich Point

That’s a really great analogy.

abby
abby
8 years ago
Reply to  Get Rich Point

Comparing dieting and saving money is what finally made BOTH of those things click for me. Excellent observation.

Sheryl
Sheryl
8 years ago
Reply to  Get Rich Point

I used to have this issue where I could either keep to my diet or keep to my budget, because I always went to extremes with both of them, so I’d end up blowing one or the other. When I finally found some balance, and gave myself some freedom, all of a sudden they both were doable.

Amy
Amy
8 years ago
Reply to  Sheryl

I completely agree. It’s easier for me to save and be frugal if I have something coming up I get to spend money on (a vacation). It’s easier for me to say no to unhealthy food knowing I have a special occasion in the near future to “cheat” with. This also applies with “mental health days” from work. If I have a massage appointment coming up, but I wake up having a bad day, I just have to remember that I have some time off coming up soon and don’t end up wasting a sick day for no good reason.… Read more »

Nicole
Nicole
8 years ago
Reply to  Amy

With me for food, I found the trick was to allow myself a small amount of something really really good. I stopped craving bad candy once I started allowing myself smaller amounts of really high quality candy. The high quality stuff is just more satisfying. (This of course does not work with cheetos, but for that my rule was, “I will eat cheetos of opportunity if they come my way, but I will not purchase cheetos.” It also helped me not eat bad potato chips when they came catered because I’d compare them to cheetos, which were the thing I… Read more »

cely
cely
8 years ago
Reply to  Sheryl

There have actually been scientific studies that show that people can only apply willpower to a limited number of areas at once. (I think JD actually linked to that in a post here.) If you try to diet AND save AND stop smoking, you’ll crash and burn. Take it slow. I sock money away every month into an ING “travel” account, but then when I spend on travel, I use my checking account and scrimp to cover it. For some reason I can’t bring myself to withdraw the money. My husband and I actually decided today to put that money… Read more »

Kate
Kate
8 years ago

I really liked this post. A good balance between the general and the way too specific, someone who is likely on the earlier side of a debt repayment battle.

Emily @ evolvingPF
Emily @ evolvingPF
8 years ago

Very refreshing. I find myself tending more toward this side of the spending-saving obsession continuum. I’m even thinking about scaling back our retirement contributions. *gasp*

TB at BlueCollarWorkman
TB at BlueCollarWorkman
8 years ago

This was the most interesting post I’ve read in awhile! Saving beyond your means. I hadn’t ever put a word on it before, but htat happened to my wife and me awhile back. We so desperatly wanted to get out of debt and save money that we started saving too much. Like you said, it’s possible! And it creates a lot of stress. We had to loosen our saving a little and boy did that make us a million times less miserable!

Dogs or Dollars
Dogs or Dollars
8 years ago

Love the saving beyond your means. I might steal that. 😉

Definitely a tendency I have. Not to the point that its cost me money, but I can see the slippery slope. All those traditional ‘great money saving tips’ can bite you right in the @$$ if you don’t have your house in order.

Amanda
Amanda
8 years ago

This article was a lot different than what I expected based on the title. I have a related problem. I was fine depriving myself to get debt paid off (because it was only for a year). Now, I have a hard time negatively judging others that won’t deprive themselves. For example, yesterday I told DH I wanted a pedicure but I’m not going to get one because I can’t justify “wasting” the money on something I could really do for myself and it would put us overbudget for the month and I don’t think this is a good enough reason… Read more »

sjw
sjw
8 years ago
Reply to  Amanda

did you then actually give yourself the pedi?

my honest answer
my honest answer
8 years ago

This is my favorite ‘try out’ post yet! Very informative, yet personal at the same time.

Lance@MoneyLife&More
8 years ago

Just because money is not in a savings account does not mean it isn’t savings. I am glad you figured it out but like you mentioned so much of personal finance is mental.

Jonathan
Jonathan
8 years ago

Seriously! In reading this it took a minute for it to dawn on me that the author only considered money “saved” once it was in the specific account for savings! I used to shuffle money back and forth to ING back when interest rates were high – I would keep a few hundred in my checking but move the rest to ING as long as I didn’t need it for a few weeks – then I’d bring it back prior to paying a bill. This was both stressful and stupid. I realized how stupid it was the day that I… Read more »

KAD
KAD
8 years ago

I really enjoyed hearing from someone who hasn’t got it all figured out just yet!!! Plus, I know exactly what she is talking about. Been there, done that. My favorite audition so far.

Erin
Erin
8 years ago
Reply to  KAD

Mine too!

Tom
Tom
8 years ago

I had an experience on a checking account I use very little. The bank changed terms and was going to start charging $4 per month if you did not maintain a $1000 balance or have a direct deposit. I took $1000 out of my savings earning less than 0.1% and moved it to the checking account. It is similar to my earning 4.8% on the $1000.
A great post! You have to look at all factors to make smart decisions.

Mom of five
Mom of five
8 years ago

I enjoyed this post. In my own life, I’ve realized that I need to spend a little more each week by not obsessing over the grocery store circulars. I can spend an hour or more studying them and then making a list, e.g. Bread, butter, and apples at Acme; chicken and bananas at Shop Rite; Asparagus and peanut butter at Giant. And on paper it always comes out cheaper. But the reality is too often I’ll go into each store and decide for instance that the strawberries looked great at Acme, and the hamburger was a great buy at Shop… Read more »

Holly@ClubThrifty
8 years ago
Reply to  Mom of five

I totally agree about grocery shopping! At a certain point, my time is worth more than the money I might be saving by going to multiple stores! Its easier to just go one place and buy what is at a good price!

Kestra
Kestra
8 years ago

Reading your story makes me grateful that as long as I can remember my bank wanted a minimum balance to waive the monthly fees, so I always use that plus $100 as my safety margin, before transferring money into savings. Otherwise, I might be doing the $0 balance thing too. I also have a good system now of waiting until I know what my next credit card bill will be, and have my second paycheque for the month. Then I can calculate amount in account, less credit card bill, less minimum balance, less reoccurring bill at first of month, less… Read more »

Steve S
Steve S
8 years ago

This is another reason to use Mint, since having the money is separate accounts becomes less “painful” since you always have your total cash on hand and Net Worth visible on the main page. Also, this is why I would advocate using a credit card for as many purchases as possible, then paying it off and the end of each month. I only have my mortgage and car payment coming out of checking, everything else (even bills like water, cable, cell phone, etc.) goes on the credit card so I always have enough money in checking when the bill comes… Read more »

Holly@ClubThrifty
8 years ago
Reply to  Steve S

I totally agree that putting purchases on a credit card and paying it off frequently can be a great way to avoid overdraft fees. I set my budget at the beginning of each month and include my fixed expenses as well as budget for variable expenses such as groceries, utilities, etc. I put all of my expenses on a rewards credit card to rack up the points and I pay it off about once a week. This way I can see what I have spent of my budget, how much I have left, etc. I am also racking up rewards… Read more »

Honey Smith
Honey Smith
8 years ago

I do this, too, though my credit card only accumulates points on whatever the balance is when the statement closes at the end of the month (which I think is pretty common). But I’ve never carried a balance on that card, and I average about $400 in gift cards per year in rewards.

Amy
Amy
8 years ago
Reply to  Steve S

Yes, Mint (for the most part) has been a wonderful additional to my personal finance tools! We used to use Quicken, but we’d go through lengthy periods where neither of us wanted to update it and re-categorize and make sure it balanced. By that time, we’d often forget what many purchases were for, esp. all the withdrawn cash. When we switched to Mint, all was beautiful again. We’ve had it for over a year, and it’s so easy for both of us to go in and check it every few days, categorize the oddball purchase, and monitor our checkings/savings/credit card… Read more »

Emily
Emily
8 years ago

Good post. Short and concise which is GOOD. Anything can become an obsession and it’s a good cautionary tale for all of us trying to save more.

CW
CW
8 years ago

I like this post compared to the last 2 audition post (Bedsheets, Student Loans).

It’s actually an interesting, but it could happen.

Laura
Laura
8 years ago

I also liked this post a lot; I like that Kristin made mistakes, recognized them, learned from them, and shared what she learned (and is still near the beginning of her GRS journey). Sometimes the quest for “savings” makes us penny-wise but pound-foolish. One needs the big picture of how one’s habits and needs fit into the stricture of a “savings deal” before knowing whether it will actually save money. Do what works for you.

Ramblin' Ma'am
Ramblin' Ma'am
8 years ago

I liked and identified with this article. I’ve never actually overdrawn my account, but there have been times when payday is a couple days away and I have $20 in there. I end up using credit cards for those few days and then paying them off with my next paycheck. Even though I don’t pay any interest when that happens, it probably would be better for me to keep more cash in checking. (I do have a decent emergency fund, but it’s with ING, and the money takes a few days to transfer to my checking account.)

VT Moose
VT Moose
8 years ago

Ah, the downside of being too optimistic with your automated savings. I’ve been on and off of paycheck to paycheck living because of big savings goals and completely understand the completely superfluous induced stress. It feels great to watch all of that money flow out to fun things like Roth IRAs, the emergency fund account and student loan repayments, but ultimately it is way better to not need the calculator to see if that recent aggressive debt repayment combined with all of those persistent automatic withdrawals is going to push you below empty. I have all of my automatic deposits… Read more »

Dog Lover
Dog Lover
8 years ago
Reply to  VT Moose

Ramit Sethi advocates automation, including arranging all of your bills so they’re due at the same time. Not sure how well that will work if you’re really paycheque-to-paycheque, but perhaps you want to look into it? Details in his book “I Will Teach You to Be Rich”, or briefly described here: http://www.themogulmom.com/2010/09/ramit-sethi-money-automation/

Ramit might touch on it in this 12-min video, but I haven’t watched yet so I can’t be sure: http://www.iwillteachyoutoberich.com/blog/automating-your-accounts-video/

David
David
8 years ago
Reply to  Dog Lover

I actually prefer making my credit card payment manually. I don’t have a budget, so it’s the one time of the month where I look at my spending and make sure everything’s in order, I’m not eating out too much, buying stupid things, etc. I just have a calendar reminder to do this on the 1st of every month (all my other bills are automated, since their amount is constant.)

Sara
Sara
8 years ago

I’ve been struggling with this a lot too. For me, instead of pushing it with my checking account, I run my credit card up a little bit past what I can afford to pay off. If I do that too many months in a row it gets very stressful and then I end up pulling money from savings to pay down the credit card. I’ve almost balanced it out again to where I’m not using my credit card and paying it down but it’s been tough because there’s not been a lot of fun money for me. I think I’ll… Read more »

Elizabeth
Elizabeth
8 years ago
Reply to  Sara

I found using my credit card threw of my monthly mental math, so now I stick to debit or I pay off the balance right away. (Essentially turning it into a debit card with rewards.)

This strategy may not work for everyone, but I find it helps me stay on top of my money.

EMH
EMH
8 years ago
Reply to  Elizabeth

I treat my credit card like a debit card as well. As soon as I make a purchase with my credit card (POINTS!!) I transfer the money from my checking account to the credit card. I am a bit OCD and I review my accounts every morning so I have transfers occurring almost daily.

krantcents
krantcents
8 years ago

I save a large (35%) chunk of my pay check, but I also control the other aspects of my finances. I think it is important to take control of your finances. Taking control means being aware of the consequences of what you do.

Henry
Henry
8 years ago

I really enjoyed this post. I liked that it was personal AND informative. A helpful and well written entry.

Ely
Ely
8 years ago

I like this post too. Not a perspective we see a lot.

I have a terrible time balancing how much to save. I get squeezed at the end of the month, but at the same time I’m afraid I’m not saving enough. It’s very challenging, and great to hear from others in the same boat.

Adam
Adam
8 years ago

Great Post! frugality should be for the sake of a better overall lifestyle, and not the other way around!

Liz
Liz
8 years ago

This was a great post! I struggle with saving too much as well. I have a set amount that I automatically transfer into savings twice a month (once after each paycheck). Some months I’m left with less than $100 in my checking account for food and gas after my monthly bills are paid. This has to last me two weeks. My savings and checking accounts are all at the same bank, so transferring money back and forth is easy, but I have to force myself to transfer money from savings if I’m close to overdrawing. I really like the phrase… Read more »

Grad Student
Grad Student
8 years ago

I don’t think the author was saving too much, it’s just that she wasn’t very smart about it in her greed over getting interest. Also, rewards checking allows you to spend from your highest yield account and not worry about low balances. However, it requires people to always spend with frugality and not the idea that you can afford it, so why not buy it, in mind. I don’t think it’s mind over math. In fact the problem is NOT doing the math that allows you to save the maximum amount without overdrafts or fees. Kristen just needed to calculate… Read more »

Marla
Marla
8 years ago
Reply to  Grad Student

What she’s saying here is that she KNEW the math, already, but was still saving compulsively, i.e. emotionally. Mind over math.

Marla
Marla
8 years ago
Reply to  Grad Student

That said, I agree with your chequing account formula. It’s just important to accept that on an emotional level (spoken from one number-crunching spread-sheet-loving person to another).

Susan
Susan
8 years ago

I’ve been guilty of the same thing but it was worse when I was deep in debt. I kept thinking, “this month I will absolutely stick to this budget” and I wasn’t even trying to save money, just break even. Oh what a “tangled web we weave…” but the only one I was deceiving was myself. I was not facing my spending habits or the actual bills I had each month. Wheww!! It took some doing to get this through my thick head, but finally the light came on.

Deanna
Deanna
8 years ago

Well saving money can be more difficult than most people think. I’ve been trying for years without outstanding results, until I came across this website barterquest.com. You can barter off your unused stuff or your vacation home, and you can get whatever you want in return. It’s a really cool concept.

Katy
Katy
8 years ago

This post is my favorite of the “audition” pieces so far! It can be easy to get so absorbed in the saving that you lose sight of what you’re saving for.

Britni
Britni
8 years ago

I love this post. I have the same issue with obsessing about my savings and net worth. I love seeing that big number in my savings account. However, I’ve found that as I diversified this wasn’t really possible any longer (so disappointing). That was why I was so thrilled when I switched to Mint.com to track my accounts. It gives me a real-time total of all of my cash in hand as well as my credit debt (I use my rewards card for everyday purchases then pay it off each month) and my total net worth of all my assets.… Read more »

chacha1
chacha1
8 years ago

Excellent post. I did something similar when in debt desperation mode … made my payments *too high* so that I was always crunched for money.

Yes, it did help the pound down the balance faster, but the stress was significant, and stretching things out by 10% so that I could have a little breathing room would not have wrecked the plan.

Mike
Mike
8 years ago

It seriously took that long to figure out the need to keep spare money in the checking account? If anything, you want to have access to money in an emergency. How much higher would the interest on the savings account be to offset even one overdraft fee?

I’m not a psychiatrist but the extreme need to maintain a balance perfectly at zero sounds a little obsessive.

Marla
Marla
8 years ago
Reply to  Mike

And its a state of mind that a lot of people go through, especially with the high level of debt people are carrying right now.

Laura
Laura
8 years ago
Reply to  Marla

Agreed, especially when some PF experts (Dave Ramsey, Mr. Money Mustache) exhort people to put every spare dime towards debt, even if it means slashing your discretionary budget to zero. I don’t see anyone (except maybe J.D.) saying it’s o.k. to have a life while you’re paying down debt and building up savings. (By “have a life,” obviously I don’t mean spending $1500/month on dancing and drinking. I mean being able to go to eat once a week with a date or cover the occasional little expenses that come up that trade off your money for a little extra time/effort,… Read more »

Nicole
Nicole
8 years ago
Reply to  Laura

In fairness to Dave Ramsey, Gazelle Intense is only supposed to be a temporary short-term state (mainly during debt repayment).

Kristin Wong
Kristin Wong
8 years ago
Reply to  Laura

Nail on the head with the Dave Ramsey thing (and the obsessive thing). The thing is, I used Ramsey’s mentality when I was paying off my debt, and it proved to be incredibly helpful. All of my money was used for debt and I had almost nothing left over. It was fine for a while, and it worked, so I kept the same mentality when I started saving. The problem was, getting rid of debt, for me, was like going on a crash diet…and crash diets don’t last in the long run. With my savings goals, I had to make… Read more »

Dorothy
Dorothy
8 years ago

Wow, great post. This was us when we were paying back our student loans. We were so eager to get the balances down that we began to short ourselves on things we really needed, like groceries.

We’re more balanced now but it can be hard not to slip in one direction or the other, especially with little kids.

G
G
8 years ago

I used to use Quicken (I now use Mint) and I had a category titled, “Miscellaneous: Irresponsibility.” Library fines were a common culprit, and that’s an example of wasting money by trying to save money.

I do incur the occasional expense in my pursuit of miles and points, but in general, I play the game well and get back way more than I spend!

Diana
Diana
8 years ago

I really enjoyed this post and I hope we get to see more from this writer. I can definitely relate to the all or nothing thinking. At one point I joked with a friend that if I were homeless for only three months I’d be out of debt…

Laura
Laura
8 years ago
Reply to  Diana

LOL – I can’t help thinking that if I were single and childless again and could live out of my office, I could save a year’s mortgage/rent money and pay off my debts and get that emergency fund going at last… I actually daydream scenarios of how I would do this.

Elizabeth
Elizabeth
8 years ago
Reply to  Laura

Grass is always greener, right? I sometimes think how easy it would be to save more if I had a spouse and we both worked. I’m secretly envious of dual income couples who can live on one income and save the other.

No matter what our marital or parental status, we all just do the best we can 🙂

KC
KC
8 years ago

I still do this! Not with overdrafting on my account per se, but with retirement savings. I have plenty of consumer debt and very little savings, but I still put away 1/3 of my income into retirement, because I keep saying to myself I can’t afford to not have money when I retire. I know all the financial pundits say to get out of debt and build your emergency fund before saving for retirement, but I figure that would take forever and I risk losing a lot of future compounding if I forgo retirement saving now. I will say there… Read more »

Jenna, Adaptu Community Manager
Jenna, Adaptu Community Manager
8 years ago

Ugh! I hate when that happens! I got charged a $2 interest fee when I accidentally typed the wrong amount in my bill pay. Off by a penny, I called and got the fee waived. Both the lady on the phone and I had a chuckle about it. Just wish I’d been more on top of it in the first place. I hate wasting time / being on hold.

Kim
Kim
8 years ago

Great post! Although I read this blog frequently, I sometimes shake my head at the utter frugality of some. People should always remember that you really can’t take it with you. It’s very important to enjoy life and sometimes that requires a little cash. As a nurse, I’ve seen first hand that life is short. I know that I can’t do everything I want right now but I’m also not putting off the things on my to do list for that magical day of retirement that I might be too sick or broke (or dead) to enjoy!

Edward
Edward
8 years ago

Having money in your chequing account to avoid fees does feel a little like having it “held for ransom”, but at the amount it saves is always greater than what it would make in savings interest anyway. …So, I guess it’s worth it. (And at least having that chunk sitting there will hopefully also act like a buffer to prevent anyone from hitting overdraft levels.)

Bryan
Bryan
8 years ago

Excellent article, we should see more from this author. I find myself in this same boat. I do all the math with my spreadsheet and I see how far away a certain savings goal still is and try to push it to get there faster. In the end, I am arriving a bit faster to my goal but in the mean time I’m stressed constantly and worried about every penny I spend. I really want to say I’ll back off, but when I’m only 1 paycheck away from the goal at this rate I just can’t mentally justify not putting… Read more »

thethriftyspendthrift
thethriftyspendthrift
8 years ago

Good post. I don’t really have this problem but for me, I need to have at least $2,500 in my checking account. Since my husband has direct deposit, his checks are deposited into the checking account and all of mine are deposited into the savings account. Whenever there is too much in the checking, I transfer it over to the high-yield savings account. For me, I am too nervous to even stay too close to the $2500 because even though I am always paying attention to the bills and what is being paid when, I still worry that something will… Read more »

Jerome
Jerome
8 years ago

Been there, done that! One of the irresponsible expenditures I allow myself is the small loss of interest big having a serious buffer on my checking account. I now have 3 months of living costs on my checking account and once a month I move money to the savings account or back. It costs me around 10 euros per month in interest but it saves me a lot of stress and worrying. My main goal in saving is to become free, so I do not want to be a slave from my checking account. Great article!

Bella
Bella
8 years ago

I really liked this post – it completely resonated with me. I had a similar compulsion… You should always pay off your credit cards in full right? Except that if you dont’ have the money to do so, you end up putting more on thecard at the end of the month. the worst part about it is that it’s hard to see how much over you really are, until it’s too late. I kept trying to pay down my credit card debt ‘as fast as possible’ but by constantly shorting my checking account – I risked overdraft gees (got a… Read more »

Sarah L
Sarah L
8 years ago

I loved this article!! I remember a time when I too was saving every penny possible, and then one day, just snapped…went and got myself something, then something else, then somehthing else and in the span of a weke, ahd spent my whole paycheck. Granted, it wasn’t more than a few hundred, but that was a huge wakeup call, and I realized, that sometimes, when we are TOO tight with what we have, it can lead to over indulging, sort of like being on a strict diet, I guess.

Kalindra
Kalindra
8 years ago

Loved it!! I struggle with this same issue as well, and it’s great knowing that I’m not alone. Between the author and the other commenters, it’s great to know that others know exactly what this is like – and to read some success stories as well. Inspiring, enjoyable, and one of my favourite posts!! ——– ‘audition review’: I love this article – I find it to be very well written, and feel that it shares personal information (thoughts, motivations, reactions) at just the right level. The pacing was great – enough time devoted to sharing/explaining, without ever crossing that line… Read more »

Lorii Abela
Lorii Abela
8 years ago

Great post! I can say this article is an eye-opener. Thanks for sharing your story.

Classicalguy
Classicalguy
8 years ago

The title of this post is misleading. It is not saving money that cost you money. Rather, it is not keeping track of your bank balance and allowing it to go negative. That’s just foolish. If there is a morale to this story it is the importance of tracking your bank balances to avoid very expensive overdraft fees. The problem with Mint is that most people do not enter their transactions into the program, instead using Mint to get information from their bank. Outstanding checks and charges don’t show up until they clear. Therefore, you don’t know at any time… Read more »

Matt
Matt
8 years ago

I feel a better title for this article would be “How I discovered my own lack of common sense”. It definitely did not teach me anything new or change my perception of personal finance. Granted, judging by some of the other comments here maybe quite a few people need a wake up call – come on people, pay attention to your account balances. It’s really not that hard; set up an alert to be texted to you if you must.

Matt
Matt
8 years ago

I feel a better title for this article would be “How I discovered my own lack of common sense”. It definitely did not teach me anything new or change my perception of personal finance. Granted, judging by some of the other comments here maybe quite a few people need a wake up call – come on people, pay attention to your account balances. It’s really not that hard; set up an alert to be texted to you if you must.

Kristin Wong
Kristin Wong
8 years ago
Reply to  Matt

Hey, Matt. You’re totally right about this being a common sense thing! But my point was that although I did have that common sense, my obsessive desire to scrimp and save was overshadowing it. Even when I set up alerts, used Mint–took all of those logical steps–I had to change my perceptions more than my financial planning. Emotion was drowning out logic. What you’re talking about is, yes, not that hard. But for a lot of people, overcoming an obsession is a bit more difficult.

Kate
Kate
8 years ago

I love this article. This is a problem I really struggle with – I have a tendency to fritter (a coffee out, a snack, a book, cinema trip…).I spend money on lots of little things, none of which is necessarily bad but all of which add up to too much money. I have tried to stop myself by reducing the available cash -I limit my monthly current account allowance and lock the rest away (not lock permanently, but in accounts that punish you for withdrawals for example by bonus interest rates if there are no withdrawals). But I like my… Read more »

Michael
Michael
8 years ago

I love this article. This writer has been by far the best audition writer. Saving beyond my means is a bad habit of mine. It’s a delicate balancing act between watching the reserves balance go up versus the stress of managing a razor thin margin of error on the checking account. Of course, I don’t ever receive overdraft fees on my checking account. With a little miscalculation, I’m always on the cusp of getting one, though.

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