REDDIT USER HAS $4.4M NET WORTH, BUT SAYS HE HAS TOO MUCH ‘ANGST’ OVER SPENDING HIS MONEY. RAMIT SETHI CALLS THIS MENTALITY ‘TOXIC’ — HERE’S HOW TO GET OUT OF THAT MINDSET

If you were a millionaire, how would you prefer to fly when traveling — private jet or first class? Or, after much hand-wringing and concerns over spending money, would you merely upgrade from an economy seat to business class?

Reddit user IntelligentFire999 struggled with this exact dilemma, despite having a $4.4 million net worth. The married 48-year-old has two kids in college and $2.9 million shored up in investments. He also has $1.5 million in home equity.

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“I am traveling internationally right now and am tempted to upgrade to business class tickets for my 20-hour flight back home,” he wrote. “This would make the trip more enjoyable and relaxing.”

However, he admitted he didn't want to spend the $1,800 on the upgrade and give up all his credit card points. This, despite the fact that he crunched the numbers and discovered that the upgrade cost only made up roughly 0.05% of his invested amount.

“Why is it so hard to spend [on] quality-of-life improvements… and enjoy life a little,” he wrote. “Especially after slogging 25-plus years in the workplace?”

IntelligentFire999’s predicament is reminiscent of many of those who rigorously partake in the controversial FIRE Movement, which is essentially taking saving money to extreme lengths.

The acronym — "financial independence, retire early" — suggests that, if you make the right (frugal) lifestyle choices and save a significant amount of money, you can retire well before the traditional age of 65.

While budgeting and saving are valuable financial skills, at what point does it stop being savvy and become “toxic frugality” — and how can you learn to strike a balance?

Toxic frugality

IntelligentFire999 isn’t alone in this situation. Popular personal finance personality, Ramit Sethi, touched on money hoarding and the FIRE Movement in an episode of his podcast, I Will Teach You to Be Rich.

He calls the restraint that comes with the movement as “toxic.” During the episode, Carl and Mindy, a married couple in their 50s, said they made a fortune flipping real estate — $4.3 million to be exact. However, both were reluctant to spend their money.

“I feel security in [our] investments, but I don't want to touch them,” Mindy said. “They're for the future.”

Sethi’s response: “Not to be too blunt, but when’s the future?” He added, “There’s no magical amount of money where you will suddenly feel safe.”

Keeping all your money close to your chest, and never enjoying the fruits of your labor, can be detrimental to your quality of life. Compulsive penny-pinching, hoarding, and an overall fear of spending money are some of the ways toxic frugality can manifest in your everyday life.

“At their core, you’ll find a pattern with cheap people, and even ultra frugal people,” Sethi said. “This is how their thought process goes: ‘if I go to that restaurant [and] I spend money on it, I might actually like it and then I have to eat out at those restaurants for the rest of my life.’”

Hanging onto millions with a death grip, so to speak, may not be a life-threatening decision, but Reddit user IntelligentFire and the couple featured on Sethi’s podcast have one thing in common: their devotion to the FIRE movement.

Read more: Don’t leave your family unprotected — find life insurance coverage up to $2 million with no medical exam or blood test

From toxic frugality to healthy spending habits

But how, after years keeping a tight grip on their wallets, do people like IntelligentFire999, and Carl and Mindy, loosen up and enjoy the money they’ve accumulated?

Sethi, who grew up in a frugal middle-class family and now has a reported net worth of $25 million, recommends a couple smart strategies.

For starters, he suggests people focus on buying experiences, not things. This advice echoes that of Thomas Gilovich, a psychology professor at Cornell University, who, at the conclusion of a 20-year study, confirmed that many people prefer accumulating meaningful experiences — travel or live concerts, for example — to purchasing “things” that don’t necessarily enrich their lives.

Setting a realistic budget can help you retain control over your spending habits. Create a spreadsheet that breaks down how much you spend a month, on average, taking into account everything from housing and utilities to groceries and social outings.

This will paint a clearer picture of how much you’re spending — and perhaps further illustrate how frugal you’ve been up to that point.

There’s also the cautionary side of the equation. On Reddit, one poignant observation sent to IntelligentFire999 came from user dbcooper4, who, in essence, noted that even the best-laid nest eggs can spoil.

“As someone who also struggles to spend money,” they wrote, “I have started to look forward into my 70s and think about what I’m going to regret not doing [when] I was younger and still had my health and energy.”

REDDIT USER HAS $4.4M NET WORTH, BUT SAYS HE HAS TOO MUCH ‘ANGST’ OVER SPENDING HIS MONEY. RAMIT SETHI CALLS THIS MENTALITY ‘TOXIC’ — HERE’S HOW TO GET OUT OF THAT MINDSET

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Toxic frugality

From toxic frugality to healthy spending habits

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