Written By Travis Hornsby, CFA®, CFP®
Updated on September 17, 2026
There's a whole genre of personal finance advice built on fear, and it does very well. “Cut your expenses to the bone.” “Live like a resident for another 10 years.” “Rice and beans until the loans are gone.” It's entertaining, but I think it's wrong. It also doesn't help the way the people giving it believe it does.
Most of the people I talk with carry six figures of student debt alongside a good income, and they've been hearing some version of that advice since training. It sticks. Frugality starts to masquerade as a financial plan when what's actually driving it is fear.
Who does fear-based advice actually help?
Some people need to hear it. If you're legitimately overspending, the emotional, altar-call version of personal finance does get results. I've watched people have something close to a born-again experience with their money, cut back dramatically and end up much better off.
That's a real outcome, but in my view, faith is for faith. Money is a human invention, and personal finance is a place where math should rule, with some knowledge of human behavior alongside it.
What if you're already paying attention?
If you're the kind of person who reads an article like this one on purpose instead of doing something more entertaining, you're probably going to be fine.
Paying attention at all puts you ahead of most people, who don't pay attention to their finances whatsoever. The advice that works on someone who has never opened a statement isn’t the advice you need. You're already doing the hard part, and you're being handed a plan built for somebody who isn't.
Where did your financial fear come from?
My grandfather was a child during the Great Depression, and he watched his family lose their home.
His father was the principal of a small high school. The county had no property tax revenue coming in, so it paid him in scrip (IOUs) for a salary it couldn't cover. He tried to put those toward the mortgage and couldn't do it, and he ended up selling that paper to investors for pennies on the dollar just to get the family somewhere to live.
My grandfather was extremely frugal for the rest of his life.
The simple reason is that he'd been scarred early enough that spending money was never something he could get his head around. The next depression might be around the corner, and he'd seen exactly what the last one did to his family. He wanted to protect them from that.
He's been my hero. I'd still say he lived indirectly in fear of an event that had already passed.
I didn't live through any of it, so I'm slow to tell anyone their caution is unearned. It's still worth reflecting on who shaped how you think about money and whether what scared them is what should scare you.
What are you giving up to save that much?
The cost of cutting to the bone usually shows up somewhere other than your bank account, which makes it easy to miss while you're doing it.
I know that because I did it. In my second year of work, I lived in a semi-finished basement next to a mall. I'd learned about financial independence and thought I could save 75% of my income and retire in my 20s, which sounded awesome at the time. What I wasn't paying attention to was quality of life. I was living next to a washing machine with very limited social possibilities.
In my third year, when I was 25, I moved into the city and reverse-commuted to my job in the suburbs. I started going to church downtown, and that's where I met my wife. She's the one who got me into student loans, which is how I ended up running a business instead of sitting bored at a big company.
So I'm a hypocrite in a lot of ways here. Deciding to spend more money in my mid-20s is what ended up making me money, in a pretty roundabout way.
Not everyone gets the chance to look back on it. I talked with a man who could have retired years earlier but chose not to because the number never felt safe enough. He kept working. He then developed a chronic medical condition and passed away before he could enjoy much of it.
What are you actually afraid of?
Nobody wants to think about dying, or whether they'd be buried or cremated, or whether their family has an end-of-life plan to work from. Once you name those things bluntly, they get smaller. You can start laughing about them and get on with living.
Money works the same way, and the fear underneath it is almost always the same one: Running out.
That one you can test. Sit down and answer four questions:
- What's your job, and how safe is it in a bad economy?
- How much demand is there for that specific skill when things get ugly?
- How many earning years do you have left?
- What would you actually do in month three of a downturn?
If you're an OB-GYN, you're going to be busy. You might get paid in food and farm animals in a truly bad scenario, but you'll be useful. Most people reading this have a specific professional skill set that holds its value in a downturn. Financial planners, maybe a little less so.
The people who get hurt worst in a depression are the ones who can't earn an income at all, because they've already retired. If you have decades of earning ahead of you, your exposure to the thing you're afraid of is a lot smaller than it feels.
So write the answers down. Then write down the number you'd need to survive six months without work, and compare it to what you already have. Most of the time the gap is smaller than the feeling, and you've just replaced a vague dread with a figure you can either fix or stop thinking about.
Where should the money go instead?
None of this is an argument for spending without a plan. Spending more doesn’t automatically improve your life. Dropping $80,000 on a brand-new car before you've tackled more important financial priorities is expensive. Could you recover from it? Sure. Is it the best use of the money? Probably not.
The spending that tends to have the biggest impact looks more like this:
- Experiences over possessions: Travel, time with friends, outdoor experiences, the stuff that makes you feel alive.
- Major life goals: Starting a family sooner, moving somewhere that improves your day-to-day life, or making another change you’ve been postponing mainly for financial reasons.
- A better standard of living during a lean stretch: Worth it when you have good reason to expect your income to increase substantially in the next few years. This is consumption smoothing, and it's a legitimate reason to spend more today than your current paycheck would suggest.
Debt deserves more caution. Large credit card balances carried for discretionary spending are the fastest way to turn a reasonable decision into an expensive one, and I'd be selective about personal loans for the same reason.
What does balanced finance look like?
The next time you hear that you should live like a resident indefinitely, I'd suggest a different reaction. You don't want to be the richest person in the cemetery.
Run the math instead of leaning on the emotion, because emotion tends to push us toward choices that aren't optimal. Then ask what would move you away from the feeling that you'll go broke tomorrow if you don't watch every single dollar. That scarcity mindset isn't healthy or helpful, and you've probably got a brighter future than you realize, even with a large student loan balance.
If you're working with a planner, this is a conversation worth having on an ongoing basis. What am I missing out on? What should I be thinking about, given what matters most to me? That's a good part of what we do at SLP Wealth, and it's usually more useful than another round of expense cutting.
