There’s a saying, “Buy Cheap, Buy Twice.” The idea of being cheap will help you save more money faster and get you where you where you need to be. Unfortunately being cheap and having that type of mindset will hinder your growth to financial freedom and prevent happiness.
Having this mentality will make you lose out on opportunities and make very poor decisions that ultimately end up costing you more money and more importantly, your time.
Now, I’m sure you’ve read a few of my blog posts about ways to save money and cut out expenses to increase your monthly save rate. This is normal and is the best way to a better financial future. However, being cheap is completely different. This is where frugal vs. cheap really comes into question.
The Frugal Mentality
Those with a frugal mindset are often mistaken for being cheap, however they are just more conscious of their spending. They tend to only purchase items that provide a future value or will save them money in the long term.
The most important asset is your time. Those that are frugal truly value this and base most of their decisions around it. If you are able to make $100 in an hour, but need to mow the lawn, sometimes it’s okay to pay $30 for the neighborhood kid to do that for you. You would still walk away with $70.
I’ve found being frugal means you can be a bit cheap with yourself in some areas, but never with other people. Tipping in restaurants is a good example. Frugal people don’t skimp out on tipping those in service industries. They value other people’s time and effort just as much as the next guy.
Those that are frugal see the value in things. They know their monthly budget and know the things they buy is pre-determined and bring value to their lives, whether it’s saving them money over time or just bringing them happiness.
Buying Cheap
The earlier quote above really rings true in this scenario of buying cheap clothing or accessories. Those that try to be cheap by buying low quality clothing really lose out in the long term. I’m not saying to go out and buy a $1,000 t-shirt, but to not purchase all your clothes at a discount store.
The quality will be low and will not last long as all. This means you need to go out and purchase more clothes and spend even more money. If you are too cheap and walk around with holes in your shirts, please go buy a shirt.
When you pay more for an item, you tend to care for it more. You give it more attention and show more appreciation for it. Buying those knock off shoes will eventually get holes and wear down real fast.
The Black Friday Trap
This is an interesting one. When you see something on sale, your mouth starts to water and suddenly you just need it. Who knows what that item is or if there’s any value in owning it, but it’s on sale, right?
Cheap people are always looking for lower costs and better deals and will jump in without hesitation. Frugal people will instantly see they have no use for that item and will save their money for something they really need.
Even if it’s a buy one get another 50% type of deal. If you don’t need one, you won’t need 2 of them. This means you’re basically spending way more money than you should just to get a so-called deal.
Cheap People Aren’t Happy
I’m not saying if you’re cheap you will never be happy. But what I’m saying is having this mentality will impact the good memories and relationships you can build. Seeing someone’s face light up when you buy him or her a birthday gift or just rewarding your waitress with a good tip because she did a good job. Yes, I used tipping twice in this post. Bad tips are a pet peeve of mine.
Being cheap makes you lose out on opportunity costs. They are willing to go out of their way by hours just to save a few dollars. Instead they should worry about smarter ways to save money. Skipping out on Weddings or night out with friends takes a toll on your mental health. It can lead you to losing touch with friends and leave feelings of loneliness and being left out.
You’re allowed to spend a little money on these things and still be working towards financial freedom. A drink or 2 out with friends will not ruin your life. You can even budget for these types of things every month.
Cheap People Will Have More Health Problems
Being cheap is not a disease and won’t make you sick. However, having a cheap mentality will mean you’re unwilling to buy health insurance. You see that as an unnecessary expense. Cheap people may have a persistent cough that won’t go away or a pain in your side, but refuse to spend money to see a Doctor. This will lead to something more serious if continued to be ignored. Maybe not those causes, but in the future it will not lead to anything good.
This post turned into a Frugal vs. Cheap mentality, but it still holds true. Being cheap will cause you to lose out on opportunities and lead a life that is lacking in happiness and relationships.
That cheap mindset will impact you and how you feel. Because you isolated yourself from experiences and spending in general, you will always feel there isn’t enough.
Instead you should learn to find value in the things you buy, whether it’s emotional value or monetary. Having a budget every month will help ease your mind when spending money. You know how much you allotted yourself to spend and know where the rest of your money is going.
Like I said, it’s okay to grab a coffee or a drink with a friend once and awhile. Eating out every single night, maybe not, but it’s important to maintain a level head and your happiness.
Frugal people value their health and their relationships and so should everyone else. The better you feel the longer you’ll be around. Just don’t be cheap, be frugal.
