Brandy, you make some excellent points!
I think that ultimately, people spend on things they enjoy, I know I do. What is the point of saving money if you never treat yourself to anything? I shop Old Navy periodically myself-good prices, good quality. T-shirts are t-shirts, when it comes down to it. I too like clothes. I haven't been able to buy much for myself in the past couple of years but I do like the feeling of having something new. It makes you feel good about yourself, give me pleasure. I like my kids to look cute. I like having choices in my closet that I WANT to wear instead of just grabbing whatever is there. I like feeling good in my clothes and I'm willing to pay more for that. In fact, thrift stores here are so expensive, Old Navy is often cheaper than they are! I got a skirt there last spring for $2.99 and have worn it A LOT, it would have cost $5 at the thirft store I go to.
Food too is another thing we are willing to spend extra on if we have it. I will be the first to admit that I could probably trim my budget for groceries more-I buy organic milk for one thing. I also go to a regional store that carries lots of local produce. They have good prices, better than the larger chains, but probably not as good as the cheaper, pack your own, warehouse grocery type stores. But to be honest, I've been in the closest one and it just didn't appeal to me-it was dirty, dark, not great variety, etc. So I choose to spend a bit more, support a regionally owned business, and that's ok with me! I like having good food in the house, like having nice choices-it definitely helps with not wanting to go out to eat if you have nice things to eat at home. I always start to think about eating out when my groceries are running low.
And I too order what I really want when I go out to eat-I always try to pick something that I wouldn't want to make at home or that has too expensive of ingredients or whatever. We don't eat out often so if we're going to, I want to enjoy it! And I want to eat something that I'm not going to have at home, if that makes sense.
But, like Brandy mentions, if you don't have the money and are still making the splurges, that's a problem. If you do though, then I don't think there is any problem with indulging in little things. To me, there is no reason to sacrifice all pleasures just in the name of being frugal. I don't actually think that is what being frugal is about anyway (just my opinion!). I think being frugal is about finding the best and most economically efficient way to do what you want to do. To me, that doesn't necessarily mean it's the cheapest way!