A fantastic question. Personally, I’m very frugal relative to my income. Mostly because my educational background is in economics, and no economic concept has stuck with me like “opportunity cost” which is what this question comes down to.
For me I splurge on things that will make me happier (travel) or things that will make me healthier or feel good like food. I have some tactics to keep my grocery bill in control, but if I ate like I did in grad school (mostly rice) I’d have a lot more money to invest. That’s a worthwhile trade off for me, but I also have the luxury of a higher than median income so I have a little more margin for error.
Great thought provoking piece Opher