Hi, and welcome. I am going to start with your last question: what's the point of FI? The point is to allow you to support yourself,
in a lifestyle that you find enjoyable and sustainable, without requiring a job. The key for you is the second part of that: what is the lifestyle you find enjoyable and sustainable? If your future FIREd life would feel constrained and unhappy without the ability to go buy some new shoes or clothes periodically, then you need to work that into your plan and make sure your budget includes some extra discretionary money for those sorts of things. Because what good is being FIREd if you're not living a satisfying life?
The real key is the plan. Everyone can be FI in a ridiculously short period of time if you are willing to cut almost everything -- live in the cheapest apartment in a crappy neighborhood, no car, thrift shops and food banks/dollar stores/freecycle only, etc. etc. etc. But most people aren't willing to cut their expenses that dramatically to be FI even sooner. On the other end of the scale, there are people whose "happy" lives require so much stuff that they don't feel like they can ever retire, because there's always something else that they "need" to feel fulfilled. Your quest is to figure out where on that scale you are.
I recommend starting with this:
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/. Time to FIRE is directly related to the percentage of your income that you live on. So what is your target FIRE date in a reasonably-perfect world (i.e., not "tomorrow")? Check the chart and see how much that would give you to live on. Then look at your budget and see how close that is to what you'd need to do. Then stop, have a beer, and chill -- because if you're like everyone else, there's a huge gap between the two, and your first inclination will be to panic or decide you can't do it. ;-) Then go pick away at both sides of the equation until you can get the two sides to meet in a way you're reasonably content with.
And then your job is to live, track, and adjust. It is extremely common for people to cut back too much at the beginning, because like dieting or exercising or any other "good for you" plan, your initial enthusiam usually gets you a little carried away. And then after a few months, you start to itch for the things you gave up, resent the sacrifices, and look for excuses to give up. The key at this point is to recognize that maybe you've gone too far and figure out what to add back in that will scratch that itch --
without tossing the whole thing. So you add a little back in, and then doublecheck how that fits your timeline -- ok, maybe that puts you at 25 years out instead of 20. That's still better than "never," right? And then maybe you add a little too much back in, and you realize after a few years that those extras aren't making you happy, and you decide to cut back. Adjust, rinse, repeat.
IOW, the way you manage guilt-free discretionary spending is you build it into a long-term plan that you are happy with, rather than defining your goal as "achieving FIRE as soon as possible." And you accept that you aren't going to get everything perfect first try -- that your priorities will change, that
you will change -- and you just readjust your plan as those things happen.
FWIW, I am about 20 years further on than you, and I know exactly the feeling you describe, because I lived it -- that pull between feeling compelled to stash every penny away, but finally making enough money that I could afford nice things that I had never had. Personally, I had to go through a season of "letting" myself buy nice things -- using my spendy DH as an excuse -- before I finally got to a place of realizing that most of the stuff I bought didn't actually make me happy long-term; I realized enjoyed the feeling of "OMG I can actually buy this now!" (which made me feel like I had come a long way from my Food Stamps childhood) more than I enjoyed the "thing" itself. So I cut out a lot of that throwing-money-around spending that doesn't generate anything useful or truly enjoyable, like takeout and (some) fine dining and Target and general mall shopping and the like. But I still spent money on those luxuries that actually do make me happy, like the StupidCar I bought a couple of years ago.* I am at a place now where I am FI and could never work again and still maintain a perfectly lovely lifestyle; but, you know, my job is pretty enjoyable, and I can't really travel a lot with the kids still at home and DH still working anyway, so I choose to keep working and enjoy the hell out of my StupidCar. And if circumstances change, then I can change my decision.
*I should also note that I enjoy the StupidCar much more because I waited for it. I have wanted it for, oh, 20+ years, but I waited until we had retirement savings and college savings in hand and I could pay cash. You want to talk about guilt-free spending? I have literally almost thrown up every time we wrote a big check -- buying our first house sent me running to the bathroom. But I wrote the check for that car without a twinge, and with the biggest shit-eating grin you have ever seen. Because I had waited and saved and knew for sure that I was finally at a place where I could treat myself
without detracting from my higher priorities.