If You Save Too Much — You Might Regret It Later!

We’re always telling people to save their money — but that’s just because we’re overcompensating for a society that spends too much. It is possible to be too frugal and you risk regretting that you didn’t have a little more fun while you had the chance.

From the NYT:

Consumer psychologists call it hyperopia, the medical term for farsightedness and the opposite of myopia, nearsightedness, because it’s the result of people looking too far ahead. They’re so obsessed with preparing for the future that they can’t enjoy the present, and they end up looking back sadly on all their lost opportunities for fun.

Splurging on a vacation or a pair of shoes or a plasma television can produce an immediate case of buyer’s remorse, but that feeling isn’t permanent, according to Ran Kivetz of Columbia University and Anat Keinan of Harvard. In one study, these consumer psychologists asked college students how they felt about the balance of work and play on their winter breaks.

Immediately after the break, the students’ chief regrets were over not doing enough studying, working and saving money. But when they contemplated their winter break a year afterward, they were more likely to regret not having enough fun, not traveling and not spending money. And when alumni returned for their 40th reunion, they had even stronger regrets about too much work and not enough play on their collegiate breaks.

“People feel guilty about hedonism right afterwards, but as time passes the guilt dissipates,” said Dr. Kivetz, a professor of marketing at the Columbia Business School. “At some point there’s a reversal, and what builds up is this wistful feeling of missing out on life’s pleasures.”

So, while spending more than you can afford is bad, and not saving for your future is bad, not having any fun is bad too.

So if you’re the type of person who is in danger of eliminating all fun in order to save money — relax a little and budget in something you enjoy.

Oversaving, a Burden for Our Times [NY Times] (Thanks, Mike!)

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