I think the LW is doing a great job. I would rather she her be a tightwad than a spendthrift. If and when the crunch comes (i.e., her husband loses his job, one of them gets seriously sick, etc.,) the $300,000 in savings will offer them the freedom from worry that most people will not enjoy.

I know far too many people who (1) have high income and (2) are living from paycheck to paycheck. Any bumps in the road and they are toast.

SJ

I'd agree that it's great that these people are saving so much money. But it is ONLY great if they aren't doing it at other people's expense.

I suspect that someone whose husband is earning a moderate salary and who is managing a household with two small children is able to save $300,000 over a period of about ten years (calculating the ten years based on their being in their middle thirties) is doing it by taking advantage of other people.

I remember reading the Frugal Zealot books when Amy Daczyzn was publishing her newsletter and I was impressed because she was truly frugal in the best sense of the word. But how many people are frugal by accepting gifts wihtout ever reciprocating, by taking advantage of public services or facilities in ways that are unreasonable, or by taking advantage of things that are free but that were never intended to be taken to an extreme. I suspect that a woman who can't bring herself to spend money on a sweater at the Gap, as a Christmas present for someone who has presumably done a ton of things for HER is not being frugal, but is being selfish and cheap. It is not ok to keep taking without occasionally giving in return. No one is saying she has to fritter away her $300,000, but there is a happy medium.

Furthermore, Amy Daczyzn does point out something that I think is always worth remembering in these discussion of frugality. Just because things are free doesn't mean they don't cost. They may not cost the person who is taking advantage of the offer of their being free, but they cost someone. It costs the taxpayer to maintain parks and zoos, it costs the taxpayer to maintain libraries; it costs restaurant owners to provide water and crackers and butter and bread. It costs waiters and waitresses to supply service to people who don't tip. There is an issue of ethics in frugality that those who are frugal often seem to feel justified in ignoring. The bottom line is that it is fine to save money if you are being responsible and kind citizens and family and society members at the same time.

It occurred to me that maybe the LW feels insecure about the sustainability of their financial future. Maybe it isn't even conscious - did her parents have long periods of unemployement when she was a kid? Has she or her husband had trouble finding work in the past? If this is the case, I'd recommend that she take measures to be as employable as possible - keep up her credentials and memberships, take classes, network, etc. - and that her husband do the same if he isn't already. That way, if her husband does lose his job and their financial situation takes a turn for their worse, they will both have the best chances possible of finding new work.

She did not mention how her frugality is affecting her kids - maybe it isn't since she describes them as "small", which makes me think of preschoolers. However, if she is similarly hesitant to spend money on her kids, I would strongly recommend therapy within the next couple of years, just so she can be sure she's taking a reasonable approach to approving/disapproving purchases of stuff that the kids want. It would be sad to see these kids get socially ostracized for their clothing or possessions when their parents could easily and reasonably buy them a few of the "right" pieces. It's one thing if her frugality is affecting herself and people who are not her dependents, but she should make sure it doesn't end up affecting her kids.

I don't exactly think it's good that the LW is holding onto so much money. Certainly it puts her ahead of overspenders, but her total lack of investment is preventing her from making even more money. With that kind of capital, she can make a variety of investments at a minimal risk and earn even more. My wife and I keep our money in various places. A frozen pool of $300,000 is good for a rainy day, but it's begging to be grown via smart investing.

Once she resolves her own problem, the LW could possibly have her own column, helping those of us with less ability to save think of creative strategies.

Reading both the letter and Cary's eloquent response, I was reminded of a former boss, not because of a similarity, but because of a difference (although one that MAY have been born of a similarity).

At Christmas time, he would always buy himself something he wanted first, before he shopped for anyone else. Seems a little counter-intuitive, I know, but he said it put him in a good mood, and made him feel more generous. Since he was, by nature, also frugal, I think he showed a lot of self-awareness in being able to manage or cope with something that nearly everyone finds stressful-- Christmas Shopping. I can say, from personal experience, that he also gave very thoughtful presents.

Perhaps the LW, who sounds in even more need of spending money on herself, could first buy herself a small, but thoughtful, present whenever she needs to get something for someone else, not just at Christmas. (Not something most of us should do.)

Finding pleasure in her own purchases for herself, might help her imagine the pleasure that others would take in her gifts to them. And then she could find additional pleasure in their pleasure. If it's still too stressful-- worrying about what the other person might like-- there's always the option of asking first, or else going shopping with them, and buying them something they admire.

Spending our money, using our resources, is one concrete way we have of expressing our values... and not doing it, keeps us from expressing them. But more important than the money spent, is the spirit of the giving, which is why Cary's response was so perfect.