Do you run a tight ship or are you just a tightwad?

Anyone who reads personal finance blogs is clearly more interested in money than the average person. If you write a personal finance blog, you’re even more interested in money (even if blogging won’t make you any).

Can you be too interested? Are we deluding ourselves into thinking we’re being economically literate, whereas really we’re just being tight?

Andy over on Saving to Invest recently asked himself if he’s a cheapskate:

I admit I am much more careful with my expenses and probably question purchases much more than I used to. Still, being called a cheapskate? That hurt. I like to think of myself as Frugal. I am well aware that hoarding money is unhealthy and have no issue spending money where needed. But unnecessary and impulse spending really frustrates me. For example why pay full price for a great purse, when most likely it will be on sale in a couple of weeks. Patience is a big money saver!

I’ve seen more people ponder this sort of thing as the financial markets have unraveled. Perhaps people wonder what they’ll do if they lose their jobs: you can’t save money when you’re not making any. Or maybe the fact that money is now top of the news agenda makes us finance bloggers feel like our passion has gone mainstream. Being frugal was cool when it was underground – like listening to Arcade Fire before they became mall music.

When your dad visits and he asks to borrow your records, it’s natural to think you should get into jazz. When your spendthrift cousin tells you he’s selling his car to use public transport because of the recession, you might wonder if it’s time to buy a discounted Porsche.

Expecting this recession for a long time, I’ve:

• Spent less than I earned
• Avoided buying a house, because I saw prices were in a bubble
• Saved and invested 30-50% of my income for years
• Tried to remember what’s more important than material things
• Been inspired by everything from family illness to immigrants in kick-starting my journey to financial freedom

But now that house prices are falling and we’ve been racked by crisis after financial crisis, I can’t help wondering what I was waiting for. Was being frugal actually a safety blanket of sorts?

Perhaps it’s partly because my portfolio has fallen in value as I’ve stayed largely invested in the bear market. Even with some judicious trading, I’m still well down compared to if I’d moved into cash (though I’d have had to pay some hefty capital gains tax if I’d sold up).

I still think investing through a bear market is the most practical thing to do. But when you see 25% of your wealth vanish in a year, you can’t help thinking what else you could have spent that money on. Perhaps I should have taken more holidays, or gone out to dinner more. Was I being too mean with money?

One difference between me and Andy at Saving to Invest is I’m not married (yet!) and I have no dependents. My money is my money, and it’s only really me who missed out by my saving it. (I fully intend giving most of my money to certain charities if I remain without heirs, but that’s hopefully still some time away!)

What I’ve really realized is I haven’t had much external perspective into my routine of heavily saving and investing. Friends don’t really know how much I’ve saved; even my girlfriend was shocked when I told her how much I’d lost (in round figures) in the bear market.

I know my interest in investing is unusual, because people ask me all the time to explain things. I’m very happy to talk about money, but people rarely comment on my strategy. So I have to ask these questions for myself.

What would I have done with the money?

If I’m being honest, I probably missed out on some things by saving so much.

For perspective, I’m in my mid-30s and I started saving seriously in my mid-20s. I feel I’ve had an enjoyable life and I’ve been lucky enough to work in a field that kept me in parties and travel when I was younger and it mattered. But compared to my friends I could have done things like:

• Gone on at least two foreign holidays a year
• Upgraded my camera equipment a long time ago
• Bought a property and enjoyed living in it, even though I knew it was risky
• Bought more gifts for my girlfriend, friends and family

That list covers stuff and experiences, but if I hadn’t been pursuing financial freedom, I might also have:

• Taken more risks
• Started my own business sooner
• Stayed in a company I co-founded and left, partly out of fears
• Written that novel

When I look at those lists, the second seems much more important than the first.

To be honest, I don’t really care that I bought my best suit (a Paul Smith suit, mind!) four years ago, or that my Nikon is showing its age. I naturally shop wisely. Yes it would have been nice to be lavish with my gifts, but I’ve observed such behaviour can bring its own problems, too. I’d like to think I’m generous with my time when asked, and that I’m a good host and so on.

The list of life choices influenced by my extreme saving is different. If I’d not become so interested in investing and retiring early when in my mid-20s, would I be the new F. Scott Fitzgerald? (This blog may give you some clues, but I’d hope my novel would involve a bit more murder and mystery!)

I haven’t decided what I think about this issue yet. I’ve realized that my need to save and invest money might have become a reflex that’s restricting some other good things in my life. I’ve no need for more random stuff – and I would certainly never spend more than I earn – but perhaps I should be saving just 10-15% of my income per year, and taking a few more risks with the rest.

Hopefully you’ll have a few thoughts, too. I’ve decided to close comments on Monevator as I’m not really that kind of blogger, but I love getting your emails. The contact link is in the column on the right. If I get a few interesting perspectives to share, I’ll definitely revisit this topic in a future post.

Tonight I’m taking my girlfriend out for a gratuitous, over-priced (and delicious) meal in a local sushi restaurant. Tomorrow: back to boiled rice?