Posted by Mike Smith :: June 26, 2008 @ 9:15 am

Living a frugal lifestyle is a great way to get ahead financially, but how far should you take it? You can only minimize expenses so far before the additional burden of cutting back is no longer worth it. Balancing your basic needs with extreme frugality is delicate and should be handled with care.

Your personal situation and tolerance for a certain lifestyle will result in a much different maximum level of frugality than that of someone else.

Trying to eliminate all of their food expenses, some people have started to scavenger for free food in dumpsters. To me, that’s taking things too far. I realize that such actions may reduce my food expenses, but the time, health, legal, and safety issues mean that it would not be worth it for me. My goal isn’t to eliminate every expense, just those that are excessive or wasteful. So I might shop sales, use coupons, buy in bulk, etc., to reduce my food expenses, but I’m not about to take more extreme measures to reduce costs for a basic need.

It seems more achievable to reduce overall expenses by say 30%, than to try to reduce 30% of your expenses to zero. In other words, I may be able to reach my savings goal by making reasonable cuts across most areas rather than extreme cuts across just a few. Clearly, any expenses that can be totally eliminated should be, but usually such categories fall into discretionary spending areas rather than basic needs.

As I said in my post on focusing on heavy hitters, your largest expenses probably have the most potential for cuts. Frugal living has different meanings for different people. While eliminating all expenses may be the goal of the extremely frugal, I prefer a balance of having my needs met while remaining conscious of my spending.