Before I changed my habits, I spent money without much thought. In college, if I had a two-hour break between classes, I'd drive to the mall. Once I started working full time, my coworker and I would bring our lunches to work just so that we'd have the entire hour to shop. If I was bored, I'd wander into the cosmetics superstore Sephora for entertainment. Even at home I'd shop, buying online and tracking my packages until they arrived.

I thought I needed a new dress for every event I attended, new clothes from REI for every backpacking trip, and practically a whole new wardrobe if I was going out of town. I thought these new things were a way to reinvent myself or to portray the right image, but all they did was fill up my closets and bathrooms with a ton of Stuff that I'm still sorting through today. (Brokamp's article on turning clutter into cash inspired me to devote this weekend to more de-cluttering.)

These habits never put me deeply into debt, but they weren't helping me to get out, either. I was often surprised at what my total at the checkout counter, but I'd throw down the credit card anyway, too self-conscious to put anything back. I'd make a lame promise to myself to cut back, but I never did.

A Stop to the Splurging

The temporary high of buying Stuff was making me miserable when the credit card bill arrived every month. When I finally had enough of paying down the debt just to drive the balance back up again, I went in the other direction. I quit buying clothes and cosmetics and made my lunch every, single day. It was a strange adjustment to have a packed lunch and a full hour in the middle of the day, without a shopping trip to fill the time. I cut my magazine subscriptions, reduced the minutes on my cell phone plan, carpooled to save gas money, and took clothing to the resale shop. I avoided every expense I possibly could, and the debt was paid off pretty quickly.

The downside was that I found it hard to spend money on anything, even after my husband and I were debt-free and had a healthy emergency fund.

A Stop to the Miserliness

I remember when it became clear that I needed to assess my relationship with money (yet again) because it was the day that the glass carafe from our French coffee press hit the floor. My stomach turned, and I immediately wondered how much it was going to cost to replace it. I went online and found that a replacement carafe would cost $12. I breathed a sigh of relief, but I also realized that my reaction wasn't indicative of a healthy relationship with money.

My compulsion to buy had turned into a compulsion to save. Why was I buying all that Stuff? Why was I now so worried about saving every cent, especially since we were out of debt and saving money every month? I filled my need to buy with a need to save, and neither was working for me.

The Middle Ground

In an attempt to find a balance between debt and spending guilt, I began to think about the reasons why it would be a good thing to spend extra money. I came up with the following situations:

• Gaining knowledge. This year I paid more than I ever thought I would for a business course. Halfway into it, I know it was a good decision that will more than pay for the cost of the course. Paying to learn something useful doesn't necessarily have to have a monetary return on investment, though. I'd like to hire a swim coach to improve my skills, which won't make money but does provide a great physical workout. I don't feel badly about spending money when I will learn something of value.
• Experiencing something new. This one can overlap with gaining knowledge, but I felt it was still worth mentioning separately. Experiencing something new can mean travel or taking lessons in something that interests you.
• Paying for quality. The quality of the food I eat is a high priority to me, so I'm okay with spending extra in that area. Another example is the aforementioned clothing habit. I've come to adapt the quality over quantity stance when it comes to clothes. If I actually need something, I'll buy it, but I want it to last and I'll pay a more for that (and an upcoming wedding is no longer considered a need for a new dress).
• Supporting important causes. One example of a cause that I support is buying locally, so I'm okay with spending extra if it's supporting a local business. You can lobby for many causes just by mindfully choosing how and where you spend your money.

Determining when I'm okay with spending has helped me to find a balance between mindlessly consuming and mindlessly saving. When are you okay with spending more money? Why do you value those things?

J.D.'s note: I went through this exact same thing. When my frugality paid off, when I got out of debt and built savings, I still couldn't spend on myself. Does everyone go through this? It wasn't until I re-discovered the balanced money formula that I was able to loosen up again and budget for fun. I'm much happier for it.