Wealth is measured by how much you hold on to. If your checking account resembles a sieve, you’re not wealthy. If money goes out as fast as it comes in, or (even worse) in larger amounts than what is coming in, you’re not wealthy no matter how much the inflow is. My guess is, you have a lot of junk.

If you have a lot of STUFF, you’re nowhere near a wealthy as you think. Don’t believe me? Go to a couple of resale shops or garage sales and see what your stuff is actually worth. I never count household goods as meaningful in an asset statement. The only time in financial planning land that your prized possessions are worth considering is when we’re looking at insurance.

If you wouldn’t be willing to sell it, and don’t know how to do it, it’s not an asset. One of my favorite shows is Antiques Roadshow, but you just know most of this stuff is never going to be sold, so really, it has no market value except to heirs. If you have a wine collection, come on, you’re going to drink it. Doll collection? You’re going to be dusting it for your lifetime. And paying insurance on it. Yes, these things can be immensely satisfying to possess and if you can afford it (i.e., you’re already wealthy), well, enjoy. I understand that people do upgrade collections and sell a case of wine now and then, but for the most part these are luxurious hobbies that your heirs will be fighting over. The market for these investments can be very illiquid (do you know how to sell a button collection?), costly to sell (auction commissions), expensive to protect and maintain, and carry a high income tax (a whopping 28%).

On the simplest level, you’re wealthy if you have excess beyond basic needs. By this standard, virtually everyone in the U.S. is wealthy compared to the rest of the world. Even people who would be considered in dire poverty in most of the Western economies are wealthy compared to the Third World. If you get hit in the street here, an ambulance will pick you up, take you to the hospital, and you’ll get treatment. If that ever happens to you, my personal experience says that’s wealthy.

On the next level, you’re wealthy if you meet your basic needs and still have any left. Here’s where we can begin to have an impact on how wealthy we are or become. As Dickens’ character Mr. Micawber says, “Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” For an example, my parents were wealthier than many of the clients I see. Although my dad never made more than $28,000 in his life and my mom was primarily a homemaker, they had more than enough to live comfortably in the home they loved, eat at restaurants they enjoyed, bail out their daughter during several financial crises, and die with money remaining in their investments. Was the house 5,000 square feet? Were the restaurants the kind where the maître d’ walks backwards? Did they expect their daughter to pay them back? No, no, and no (but I did).

I’m not saying that you have to live on beans and shop only on Craigslist.  But somehow, you have to live lower than the limit of your income. Numbers? At least 20% lower—and that 20% goes into 1)emergency stash 2)retirement 3)long term goals 4)investments (business startups, real estate, stock market, whatever). Without savings, you really have no way to take advantage of opportunities that come your way and no ability to ride out the waves of uncertainty and surprises that life brings. Peace of mind is real wealth.

Up to now I’m only talking about material wealth (hey, I’m a financial planner).But of course I think there are many things that make you wealthy which have much more value than money: the love and respect of your children, the ability to adapt to challenging circumstances, the ability to make yourself happy without spending money, the sense of having done something worthwhile in your life, friends that will step in when you’re down. I wish I could help with those things, too, but getting a good financial plan can really free your focus to move on to those higher levels of wealth.

Many of the financial fitness gurus have banged the drum ad nauseum—don’t buy lattes, don’t eat out, buy your clothes second hand, clip coupons. Then there’s the other side of the fence—start your own business, make money by investing in (fill in the blanks), etc. Who’s right?

Well, I say only pinch as many pennies as you need to (unless of course you enjoy it). Do you have an emergency fund equal to at least 3 months income? I like six months to a year better, maybe two if you’re really close to retirement, but you’ll have to assess how secure your job is and what other sources of support you can access—like living with a parent, a partner with secure employment, a good side business. Are you saving at least 10% of your income (if you’re younger than 40) or 20% if you didn’t save much before 40? Are you nearing retirement with savings of 20 times your current income? Then don’t bother—buy anything you crave at the grocery store, indulge in that dinner out without an Entertainment book coupon, park at Starbucks. If your financial picture is already in good shape, you’re probably not the type to go wild anyway.

But let’s take it down a step. If you’re carrying a balance on your credit card(s), aren’t saving, don’t have an adequate retirement fund for your age, it’s time to become a frugalista. And I mean that whether you’re making $50K or $500K. Unfortunately, any financial planner can tell you hair-raising tales that prove income has no relationship to savings. But even being frugal has a hierarchy: tackle the big wins first.

Re-evaluate your big bills first—get some new insurance quotes, see if you really need the super premium cell phone service, and (gasp) calculate whether you really can afford your house or if a sale or refinance makes sense. The afternoon spent doing this can easily pay you back $100 or more per month, and that buys a lot of lattes. People who spend all Sunday afternoon clipping and sorting coupons to save $5 often never take a look at their car insurance or their cable plan. Dumb.

Then what? Calculate how much time you spend to make sure the money saving is worth it. Now, I’m my mother’s daughter so I do clip coupons and probably always will because it’s a fun form of shopping for me, from the comfort of my bed on Sunday mornings. But I only clip coupons for stuff I buy anyway, or might be interested in trying. Since there are rarely coupons for fresh fruit or grass fed beef, I don’t make much on this. However, I can usually find enough coupons to pay for the cost of the Sunday paper, making it worthwhile to me. Also, when I use coupons I generally try to get the value back in cash (just ask) and put that cash in the change jar in the kitchen. I like to see it add up and it turns out to be fun (for me) mad money. Even though I’m awed by people who do it, super couponing is not my style—too much effort for too little per-hour return. But if I were really, really broke or simply enjoyed the gaming aspects of it, I’d do it.

Still short on the silver? Then it’s worth evaluating what IS important to you and what’s not. Brown bagging it is almost always worthwhile not only for cost, but also for taste, identifiable ingredients and weight control. But if you can use lunch to network or accomplish something, then grabbing something to go, or eating in the most plush restaurant will be a worthwhile investment of money. Office coffeemaker or Caribou? Again, is it a satisfying luxury or a reflex. I vote for pleasure, but only if it really is a pleasure. Otherwise, save the dough.

Our strong “Protestant ethic” considers frugality a virtue and an end in itself rather than a means to a goal. Not me, I say enjoy life. I can’t enjoy myself if I’m not paying the bills, and opening up banking statements with a hefty balance is more worthwhile to me than a brand new car. I clip coupons but I like to stop at Starbucks. So, I say adjust not only your spending but also your savings to your needs. Decide if you’re getting a good return on any investment involving money, time, or effort.