Oct 3, 2024
In the race to retirement, many of us strive to sock away as much as possible to secure our future. But even when it comes to retirement savings, there can be too much of a good thing.
That’s the message from financial expert and YouTuber Humphrey Yang, who warns that over-saving for tomorrow can impact your quality of life today.
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Now, no two retirement goals are the same, but Americans generally believe they’ll need nearly $1.5 million to retire comfortably, according to a 2024 study from Northwestern Mutual found, reflecting a 15% jump over 2023. And with many Americans reporting that they aren’t saving enough for life after work, it’s hard to blame them for making up for lost time.
But Yang admitted that some savers are going too far. In a recent video, he outlined the symptoms of over-saving, listing red flags that signal you might be working too hard to put too much away — along with ways to find a healthier balance.
Your saving habits strain relationships
Savers are often frugal, but could that frugality cause tension with friends or family?
“If you’re too good at saving money that it’s causing you to all of a sudden forego life experiences or perhaps even delay purchases you absolutely need, this could be a problem in your relationship,” Yang said.
You can overcome this by openly discussing financial goals with your partner and agreeing on a budget that allows for both saving and life experiences. Allocating funds for shared experiences can strengthen relationships without jeopardizing financial security.
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Life experiences pass you by
As Ferris Bueller told the audience in the iconic 1980s film, Ferris Bueller’s Day Off, “Life moves pretty fast. If you don't stop and look around once in a while, you could miss it.”
Extreme savers often resist simple pleasures, like dinners out or occasional vacations.
Yang explained that this lifestyle can lead to burnout and a monotonous routine, where “time seems to pass you fast and all the days start to blend because we weren’t experiencing anything novel or new.”
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To counter this, he emphasized the importance of balancing saving for the future with actually living in the present. He recommended setting aside time for things like occasional road trips or concerts with friends to enhance the quality of your life without breaking the bank.
You’ve surpassed your financial goals significantly
Have you already exceeded your retirement savings targets but continue to save aggressively? By using Fidelity’s guidelines, Yang explains that at age 40, saving three times your salary means you’re on track for retirement. “If you’re double these benchmarks … then I would argue that you are probably saving too much money.”
It might be time to reassess your financial goals. Determine your “financial independence number” — a key component of the financial independence, retire early (FIRE) movement — by calculating how much you need to retire comfortably, Yang said. If you’ve reached your number or exceeded it, consider adjusting your savings rate to allow for more present-day pursuits or enjoyment.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
You’re obsessed with saving small amounts
Have you ever driven a few extra miles to that gas station where the price is a few pennies less per gallon? Yang describes this behavior as spending “so much of your free time to save an inconsequential amount of money.”
Yang referenced the concept of the “opportunity cost” explaining that “if you’re spending one hour to drive out of your way to save $5 on gas, it’s generally not worth it.” Instead, focus on high-impact financial decisions and activities that genuinely add value to your life.
You’re neglecting health and essential needs
Yang’s final symptom might be the most important: Savers who delay necessary expenditures, such as medical care or essential home repairs, to save money. He admitted that “some people are going to want to avoid the doctor or perhaps put off a health-related problem because they fear how expensive it’s going to be.” This can have serious long-term consequences on your well-being.
Prioritize spending on health and safety. Regular medical check-ups and essential maintenance are investments in your future, not expenses to be minimized.
Finding the right balance
Aggressively saving for retirement is smart, and going the extra mile to have something extra in retirement is laudable. But as Yang said, over-saving often stems from a fear of being without or past financial hardships that can lead to over-corrections.
In his video, Yang shares a personal anecdote about his father: “Since he grew up in poverty… it’s just always been ingrained in him that he needs to save every single penny and dollar that he could.” Recognizing these patterns is the first step toward change.
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Chris Clark is a Kansas City–based freelance contributor for Moneywise, where he writes about the real financial choices facing everyday Americans—from saving for retirement to navigating housing and debt.
