how much should one spend on a mitzvah?

Welcome back! Yom Tov of course went too quickly... how many days until Chanukah?
I have been learning Bava Kamma with my son and over Yom Tov pushed to get to the sugya of hidur mitzvah (daf 9). The gemara writes that one must add/spend 1/3 on hiddur mitzvah to obtain a more beautiful mitzvah object, e.g. a nicer esrog. Obviously if one spends 1/3 of one’s net worth on each act of hidur mitzvah, one will be bankrupt after doing only three mitzvos! – the gemara clarifies that adding 1/3 means adding 1/3 of the value of the particular mitzvah being performed, e.g. spending 1/3 more than other esrogim cost to buy a nicer one, or buying an esrog 1/3 larger than others (see Rashi, Tosfos).

While the gemara accepts that having to spend 1/3 of one’s total net worth to perform any given mitzvas aseh is ridiculous, it leaves ambiguous how much maximally one is obligated to spend. Tosfos suggests that the upper limit is 1/5 of one’s worth, based on the rule that one should not give more than 1/5 of one’s property to charity.

The Mishna Berurah in Biur Halacha points out that the gemara elsewhere (Kiddushin 29b) discusses a case of a man who has only 5 dollars and must choose between performing pidyon haben for himself or his son (see that sugya for details). If the maximum a person is obligated to spend on any mitzvas aseh is 1/5 of one’s total wealth, then the dilemma is moot as there should be no obligation of pidyon haben at all in this case! Why does the gemara call on a person to spend his last $5 on pidyon haben in excess of the requirement for lulav, esrog, or other mitzvos? Stay tuned for a lomdish Chazon Ish…