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For most people, budgeting is about applying scarce funds where they're most urgently needed. People have to make choices, often hard ones, about what they can afford to buy. There are other people, much less common but still numerous enough to regard as a group, who spend much less than they earn.
I've heard many anecdotes about frugal people, and indeed I'm one of them, but I'd like to raise awareness of the fact that frugality can be bad. This occurs when people save without a specific goal in mind.
Saving for a great vacation or a new car or a child's education or to finance a business or for your retirement — etc., etc. — is a good thing. The problem occurs when people forget that the purpose of saving is future spending. Saving is not an end in itself.
It is possible to save too much. For example, a 70-year-old in declining health who has a $5 million net worth does not need to save for their retirement any longer. They're not going to outlive their money. They should use their resources to enjoy the remainder of their life as much as possible. They don't owe anything to their children or grandchildren; the "correct" size of the inheritance is whatever amount balances their quality of life with their satisfaction at giving to their heirs. They certainly should not deprive themselves so that their heirs can have more.
(A caution: I recommend selling enough liquid assets to enjoy a high quality of life. This should not be interpreted as advocating the liquidation of businesses. Capital decumulation is economically harmful. And in practice it's unnecessary; a profitable business can be sold rather than shut down. And an estate large enough to hold a business is so big that it's not likely higher personal consumption would much affect it, anyway.)
The previous example may be clear, but the idea is more broadly applicable. A middle-aged person in good health who has a $5 million net worth probably doesn't need to save any more for retirement, either! There's no reason for such a person to drive a worn-out car and eat the cheapest bread. They can afford better things that would improve the quality of their life without jeopardizing their goals. Just as it is wrong to live above your means, it is also wrong to live below your means. It is wrong to sacrifice your quality of live in pursuit of a goal that you've already met. When your goal is secure, recognize that fact and change your behavior accordingly.
The difference between a frugal person and a parsimonious one is that the latter literally doesn't know when to quit.
On the personal side of this issue, my "problem" is that I'm easily contented. For example, I have no particular desire to buy a high-definition television. My television viewing is modest and is typically programming that wouldn't benefit much from high definition. Shopping for and installing the unit would be a lot of hassle and it doesn't seem worth the time and effort.