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The following are both true statements:

• You should save until it hurts.

• Money is meant to be enjoyed.

Personal finance books are filled with stories of people wearing awful suits, driving crappy cars, and living in tiny houses. Meanwhile, they all have seven-figure bank accounts.

Admittedly, these people are actually quite rare. You probably know more people who wear expensive suits, drive expensive cars, and live in giant houses—all while drowning in debt.

You do not want to be either type of person.

• I call the first type “CFs.”

Please don’t ask me what CF stands for. If you can’t figure it out from context, I can’t help you.

Saving money and living below your means is good, especially early in life. Young people can better tolerate cheap clothes, cheap food, and cheap apartments. Your 20s and 30s are the right time to cheap out, pay down debt, invest, and build wealth.

That said, I have a problem with people over age 45 who live like they are poor, even though they are rich. These are people who are close to or in retirement. It is not an issue of financial security—they have plenty of money. They simply don’t enjoy spending it.

I have a moral problem with that. If you earn money, you had better enjoy it. Maybe not when you are 35, or even 45. But by the time you are 55 (and hopefully before), you should enjoy the fruits of your hard work and good risk-taking.

• Money buys material things, which can give you pleasure.

CFs don’t get that. They don’t seem to realize that a suit is not just a suit. The cheap ones are not the same as the expensive ones.

I had a friend who was a very senior investment banker. He is a CF. One day I asked him, “Are you still wearing the JoS. A. Bank suits?”

“Oh yeah,” he said.

“You go to fundraisers and political functions and closing dinners in those suits?”

“Of course. Nobody cares.”

“They do care,” I said. “People can tell.”

“Nobody can tell,” he said.

I was getting nowhere. It’s pretty rare for a CF to change his mind.

• Ideally, you want to be a CF early in life, accumulating assets.

Then, later on, you can stop being a CF and start decumulating assets.

The problem is that most people only do one or the other. Born a CF, always a CF. Or, you could be the opposite—a high roller.

You know the type. They only shop at Whole Foods… only buy the best version of everything.

Longtime readers know that your financial health usually comes down to a few big things—house, car, student loans. Well, there is a big difference between a Safeway grocery bill and a Whole Foods grocery bill. It might be a difference of a couple of hundred bucks a week.

Is there a quality difference between generic brands at Safeway and the stuff at Whole Foods? Of course. Is it worth $10,000 a year? Your call.

I don’t really have a budget, but I do keep track of how much I spend, usually by looking at my credit card statements at the end of the month. If I normally spend x, and one month I spend more than x, I’ll tighten my belt the next month.

Budgets are annoying. But some people, like the high rollers, need budgets. Not spending money doesn’t come naturally to them.

As much as I deplore telling people to skip their morning lattes, the little things, taken in accumulation, do matter. If you’re spending $15 bucks on lunch, plus $6 at Starbucks, multiplied by 252 workdays, it adds up to real money.

If you’re fresh out of college, maybe pack a sandwich. But if you’re 50 years old with seven figures in the bank, it’s okay to eat out for lunch. You’ve earned it.

• The all-or-nothing solution is easier to implement than some middle ground.

My solution is two-fold:

1. Implement austerity while you’re young and building wealth, and for the love of God, spend your money once you’ve accumulated it.

2. Remember that it’s a balance. Being cheap affects relationships. People remember that stuff.

Every once in a while, you hear these stories about some 90-year-old lady who dies and leaves $7 million to a cat shelter.

I have mixed feelings about that. I’m happy, of course, that she saved 7 million bucks (and I’m happy for the cats). But I’m bummed when I think of all the things she could have done to enjoy herself but didn’t.

Save money, but save it with purpose. Money (and life) is supposed to be enjoyed.

Jared Dillian

P.S. Unsure of what to do with the money you save? Click here to grab your FREE copy of How Do I Start Investing?