What are your thoughts/strategies on balancing being too frugal versus spending too much? How do you have fun while still maintaining a decent savings?

A lot depends on where you find your fun.

For some people, it truly is enjoyable to get up and go to their business every day and see what they can do to make it better. For such a person "spending" certainly includes "investing" in new plant and equipment, so it makes perfect sense (if you can show through a business plan, for example) how spending money that you don't have now can help you recap that investment over a specified time period (part of the plan) and make more money in the future than you would have without that investment. So that's a smart way to spend money that you don't have.

Education would be another example that might apply to most people. Even if you don't "use" a college degree, for example, the fact that you HAVE an education makes you generally more valuable to society (certainly to yourself and your family).

Home improvement (in capital expense terms) might be another example. But here you start to get into a gray area. Buying a new big screen TV might be a huge "improvement" in your television viewing enjoyment, but the asset is not an appreciating one. That is, that asset will never pay for itself; it won't return any more value to you. (Which is not to say that it's "bad" or even "unwise", just that it's not "investment".)

Even "buying fun stuff that won't make a return" on credit isn't necessarily a bad thing, if you have savings to cover the credit if your income fails to cover the payments for some reason, such as might happen through job loss, for example.

But when you get a second mortgage on the house, have zero savings, are maxed out on your credit cards and your job is in jeopardy ... then if you charge anything that you don't absolutely need, you're spending too much.

If you make and live within a budget (assuming the budget is real, and not just for show), then you should be able to make the balance okay.