I am a survivalist for many reasons. I plan on surviving. I am prepared. This doesn't mean that preparedness is the one and only thing I think about during my waking hours. It doesn't mean that every cent of my money goes to buying stuff for when the SHTF.
The key to minimizing damage psychologically, physically, and in your physical surroundings is to prepare for the inevitable. Depending on where you live depends on the inevitable. Earthquakes happen, hurricanes happen, tornadoes happen, these are facts. Some of these are predictable, some come as a surprise. I suppose that's one of the reasons I don't like San Francisco...
The next step is to prepare for the unexpected. Preparing for the end of the world as we know it may happen. Define "as we know it". If you take that to a large scale it can mean war, political upheaval, monetary collapse, EMP, meteorites, or aliens or zombies (just had to throw that in!). On a small scale "as we know it" can mean illness or death of the primary breadwinner, or caregiver, a job loss - even if temporary, a house fire, burglary, broken down car, or even living through the teenage years! (I have to do this again? What was I thinking when I said I'd keep the grandkids????)
How much is too much to spend on preparing? It again depends on how you define preparing versus how what is just part of your regular lifestyle. I have room for lots of stuff so as long as I don't have more than I will use or will go bad in the next thirty years then I don't have too much. On the other hand, if girl needs a new dress for some upcoming fancy event and she's busting out the seams of the one she has and I don't want to buy it because I haven't bought my 36 rolls of Costco toilet paper this week then my priorities are skewed. That doesn't happen around here. We do both. We take trips. We even go to the movies once or twice a year! But prepping crosses my mind continuously.
Do we strap our water heater to the wall in case of an earthquake? Sure we do. It costs $10 for the strapping kit. It sure will save on a broken water heater and busted water and propane pipes. That's an easy prep. So is not hanging a heavy picture over the head of your bed. These are all preps that people do in earthquake country. It doesn't affect your lifestyle at all other than to make you a little more prepared.
This summer, instead of spending the $40 on a cheap plastic pool for the kids that will breakdown in the sun and be thrown out by next summer, I spent $300 on a heavy duty 650 gallon plastic stock tank that doubles as a swimming pool. Sure it's only 8 feet by 2 feet high but compared to the 8 foot by 2 foot cheap plastic pools this is the greatest. Not only do I not have to buy a new one (so same price is spent when added up over the years) I now have a permanent 650 gallon pool to hold water year round. Now that's only two gallons per day if it had to last a year which isn't a lot in the overall scheme of things. On the other hand, those 650 gallons are enough for a week if the well water isn't available for a couple of days due to a minor power outage. I won't have to immediately rush out to get the well changed over from the electric pump to the hand pump even if it is a long term power outage. The backup will smooth things over. So yes, you can spend money on preps or just do preps and also live a "normal" life.