When we think of someone being cheap, it is usually that nasty friend who doesnât budge to lend those $ 2 extra dollars when you need spare change at lunch or the cab driver that refuses to take less when you state you donât have as much as intended for the ride.
Weâve all encountered these awkward moments in our life that have ruined relationships, oneâs dignity and if you are financially obsessed, even been that person who refuses to give away money or spend it on something that doesnât feel acceptable. It would be wrong to tell you not to be aware of your spending habits and learn to be negotiable. Those are the key foundations of financial independence and eliminating debt. Being cheap by nature isnât bad. It means you care about your spending and want the best bang for your buck. You are prioritizing your financial health hence, spending less than you make but it can quickly go overboard in unexpected areas of your life.
People who have more debt tend to and should prioritize the cheap lifestyle but more often than not, it becomes a dangerous habit, similarly to orthorexia, an obsessive healthy eating disorder which in turn takes a toll on your physical, mental and emotional state as a whole. Obsessively controlling where you can find the best deals and feeling FOMO giving away a few dollars to a shelter for no immediate result for yourself is equally dangerous as giving all you have away.
I used to be this person.Â
A stubborn selfish kid, confidently assuming my money was worth more than it really was and presuming that everyone wanted to steal my hard-earned summer icecream earnings away from me. As a result, I ended up spending nothing I needed which resulted in my decreased credit card score, less friends, depression and being a cheapskate and severely inconsiderate. Until Iâve pinpointing how finding the best bargain and focusing only on money was wasting my time, ruining my relationships and work ethic, I became happier and healthier with my spending and people. So letâs go ahead and identify why being cheap is bad so you never have to feel or treat people this way again:
Lose Focus On Whatâs Important
Finding deals can be exhilarating but draining. You feel you are doing the right thing for your wallet but when you take into account how much time, energy, effort, and possible scams come through going down the rabbit hole of digging through illegal sights and the black market for that rip off Gucci bag, at least to me, I would rather pay a little more to save time. Not only comparing yourself to others will no doubt make you jealous, you forget what you value and appreciate in your life.
Gratitude brings joy, not the opposite. Focus on your needs because no one else is going to pay the bills for you.
Dangerously Obsess Over Finding The Best Deals = Endless FOMO +Â Regret
When you lose track of what is worth your time and sanity, you become paranoid about finding the best deals which are usually deals for a reason. We always hear, just becuase itâs on sale, doesnât mean you should buy it. Put that on repeat. Half of my closet are deals and the rest I purchased on full price. Guess which items I wear? Those that werenât on a discount for a reason. They are quality, been in my closet for over 5 years as investment pieces that I donât have to keep buying over and over. There will always be FOMO about everything in life. You cannot attend that party, event, movie, gathering, whatever it may be on the same night as your own birthday. It doesnâtâ work out that way and the earlier you can accept that, the easier your life will become. To eliminate regret, stop worrying about what you are missing out on and instead focus on what you have and appreciate it.
Gets in the Way of Building Relationships
I used to be a mall junkie. Malls are designed for you to escape time and be in the shopping addiction zone. There are no windows or clocks for a reason. When I went with my friends in middle school, I was already in an impulsive state to find the best deals. I donât know if it was becuase I was trained from an early age to dodge the best apples at the fair or be a neat freak leading me to always look in the dark hole for something better. Until a few years ago when I learned about opportunity cost in economics class, my relationships strengthened as a direct result of doing so. Not only I accepted that I wonât always find the best deal unless I always risk my credit card details and personal information on an illegal Chinese website for counterfeit goods, I spent less time ruminating on purchasing things. I actually got to enjoy beloved Annieâs pretzels from the snack bar and have meaningful conversations with my friends through experience, something that will always last.
Disordered View Of Your Finances
When you are trained to snoop for the best deal, drive around town and try to negotiate a price, no one will like you. It gets annoying and with your finances, you end up spending more than you intended. Usually, when you are cheap, you spend more becuase you never know what is right and want to eliminate FOMO, so you get more than expected. When you act frugal, you appreciate what you have, value experiences and moments that you will remember never the tangible goods that depreciate in value and only bring happiness for a certain amount of time.
Wasted Time And Energy
Time = Money. Whenever you spend an extra minute searching for the best deals, yes you may be saving upwards of thousands but most likely unless you really take your time and look on reputable sites, it isnât worth it. You need to evaluate what are the best options to getting deals. Sometimes if you want that quality cashmere sweater for $300 you will have to pay that much but that doesnâtâ mean you should just becuase you want it. Remember, buying something on sale, doesnâtâ mean you are saving money. You still spend it whether it is $300 or not. Most of the time, if you follow the 72-hour purchasing rule, youâll realize you donât need that item after all becuase your life wonât be better after it.
Resources To Not Go Crazy:
You financial health and physical health are the 2 most important things in your life to control. And guess what, they are all up to you! You have the choice what you put into your mouth and how much you spend. Time is your most precious asset becuase you cannot buy it back. If you looking for deals but not spend countless hours running in circles, download the extension Honey, simply do a quick Google search for alternatives or check out consignment stores! Set a baseline of how long you reasonably think you should spend bargaining for something and if you go over the limit, that means you donât need it.
Being cheap can be hard and for sure tiring despite feeling the benefit of the doubt, thinking that youâve saved money and added extra money to your bank account. If you experience or feel any of these symptoms, it is a tell tale sign that you arenât working in your favor, rather against it as you are not prirotizing and correctly trying to help yourself financially.
Knowing the difference between being cheap and frugal will save you headaches and lines on your forehead for life. If we could, none of us would want to be cheap. We wish we could just buy whatever backpack we want, not search around at lower quality stores and try to match it up to our luxury dream bag just to feel satisfied. We are cheap becuase we have to not want to and that distorts the way we manage our money.
If you treat everything all the mundane life work as commands, then it will harm you back. The truth is, you will never feel satisfied if you always compare what you have to something that you cannot afford. Comparison is not only dangerous emotionally it is financially as well. More often than not, those who you think are thriving, could easily be in the bucket with 80% of Americans with debt. We only display what we want others to see.
Wouldnât you feel better eliminating all debt in your account that is accumulating interest faster than your savings account than a nice bag to store your junk? I for sure wouldnât care to impress others and not be beholden to pay back the bank any day. There are times when caring about otherâs opinions are important. During a presentation to receive constructive feedback or understand why you are treating someone a certain way to be respectful. But when it comes to tangibles you own and what you look like, it has no correlation to what you are worth or how you should act. Wealth is feeling valuable inside after all. Anyone can technically be rich. It just depends on what you prioritize and value. A farmer who saves 90% of his income is richer than an investment banker who splurges it on stuff that he forgets he has. Itâs all about how much you keep in the bank and what you donât pay attention to which is otherâs perceptions.
But cheap versus being frugal is something that is hard to pinpoint at first but necessary to address as it can make or break your whole life, not being dramatic.
Definitions
Cheap isnât caring so much about what others think or feel. It is mainly inheriting an egotistical feeling that you must find the best deal or prize in order to feel a certain way and make your bank account happy even though most of the time after countless searching, bickering, arguing, and wasted time, it leaves you with nothing besides regret.
Being reasonably frugal on the other hand comes with the understanding that regret will always happen. You can never be the perfect size, shape and in financial terms, never go across the world to find a great deal that may risk your financial health becuase you most likely will get yourself in a scam. Life is about enjoying the small moments and you donât want your finances to get in the way of enjoying life. The more money you have, the less you have to spend becuase it is more tempting. Yes, I preach on here that your finances are everything and will give you a miserable or wonderful life if not prioritized and involve in every aspect of our lives, but if you have a plan to value experiences, building relationships, cautiously finding the best deals without going berserk, you will feel and be 100% financially better.
Itâs weird how that works. Being a cheap human will provide you nothing, especially if you treat people that way.
Behind every transaction, is a person. Rapport beats any boring resume after all.
Itâs difficult to mark the fine line between being cheap and frugal. I found it through various methods that I hope can help you too.
Frugal habits include:
Not obsessing over what everyone else has
As weâve discussed earlier, cheapskates are notoriously bad about being grateful. They always focus on the Joneses and cannot comprehend that people only show off what they want others to see. When you see someone with a luxury good, it can mean two things.
1: They obviously want to show off becuase there are millions of other products like that
or
2: They are lazy and believe this product is top quality and nothing like it.
Which one do you think is healthier for your finances? You may think that finding the best bargain and seeing what others have is better, but when it comes down to saving time, energy and prioritizing what you need, taking on approach two is better as I would rather be lazy than never appreciate what I have. There will always be something you donât have and until you realize that you have what someone else wants, you will start enjoying life.
Enjoying experiences, people, and moments
The more time you spend buying goods, the less time you have educating and investing in yourself to provide infinite gains for the future. It is unfortunate how people value things than memories that define their lives. As a society we tend to spend excessively on material items so we can conclude that buying material goods improves our wellbeing. And we constantly believe that becuase we spend a heck of a lot on junk.
Americans spend more on shoes, jewelry and watches at an estimate $100 billion, with a b than on higher education!
The average American throws away 65 pounds on clothing per year.
What will convince you that spending on time-saving endeavors will increase your overall fulfillment and happiness? Just do it yourself! Trust me, you donât need that bag after all. Find a less expensive one that is at your nearest store and move on with life. Trust me, in a few years, you wonât remember the bag or the time wasted becuase itâs gone.
Making sure things will last
There is only a certain amount of time you can spend to search for the right deal until you are going overboard. As a frugal minimalist, Iâve become very aware and conscious of my budget and what I need, the 2 key pillars of having a healthy spending relationship. Memories and experiences will last as you will tell stories and share more experiences based off of them later in your life. Forget that Nintendo or $700 shirt. I guarantee you you will get over it in a few months time and spend more time trying to sell it for a discount. To make your money work for you, prioritize your time and people becuase those will reap endless rewards. Investments in education and people will always come back to you. Stop being patient for the long term and impatient in the short term. Building connections never hurts especially when looking for a job down the road and learning Python or Java doesnât take as much time as you thought. The activities that donât bring immediate results are usually the most highly regarded qualities to have compared to shopping and food which are impulse decisions that only bring happiness for a hot sec.
Taking time for purchases
Opportunity cost should be a part of every decision in your life and something frugalists measure. Save more money by saving time. I will pay you a lot for you to save my time and learning to say no faster, will save your money as well. No you donât need to buy 2 and get the extra 1 free or spend $100 and get 50% off the next shirt. Taking time, prioritizing your life and needs through the 72-hour spending rule will put you on the best track to banishing the bad spending habits of impulsivity. To get the best deals, you must put in teh time and effort through research but make sure you know your time is worth it. We tend to have a mixed-up allusion about our time and prefer to do mundane easy chores that life requires during our peak performance hours. Researching the best trends and shopping is 10x easier than working on yourself, but what is more beneficial in the long run? Donât get working hard and hardly working mixed up.
Every day little purchases not the big ones, once in a while are those that add up
As with a diet, a piece of chocolate cake once a month will not sabotage your weight loss journey. Itâs the little daily portion sizes, ingredients, additives, and junk that you secretly disregard that have the biggest impact on your health. With your finances, it can be argued the same. Obviously going on a $7k round trip vacation to Aruba is a bigger expense than mini trips around the country but that doesnâtâ mean you arenât still spending. Money is money and compounding can work in your favor if you let it. Donât become nose blind to the deals that you find on a day to day basis becuase they could easily be the ones sabotaging your bank account.
Health and financial stability = happiness in this world
Frugalists believe in experiences and not overly obsessing about something they didnât get their hands on. You determine how you spend your time and most things arenât needed. You really donât need much to be happy and in fact, the less you have, the more you will be due to gratitude and minimalism, a lifestyle I embody that my friends havenât found out is the secret sauce to my calmness. I donât care what you study in school or like. Every single human on the planet needs to have their financial and mental/physical health in check to actually live. Money is a part of our daily lives whether or not we spend. By living under a roof, we are stacking bills to be paid at the end of the month and every once in a while alcoholic drink you have for a night out on the town will soon add up to a Aruba vacation. In 2021, I hope you can prioritize the little things in life and put your finances in order. You donât have to go overboard with graphs and Excel just prove to yourself that everything charged to your acount is worth it.
Beware of trends
The older you get, you start to realize that not only impressing people is a waste of time but trends come and go fast! Can you imagine if you keep tabs on all the trends of the year! You will need a 6 bedroom mansion to fit all those clothes! I always invest in classic minimalistic pieces. I wear the same white shirt in 7 pairs every day and since my shoe size hasnât changed since puberty, I love my sneakers. One pair and if I need more, I go get it. There is never a shortage of clothes and buying investment-grade pieces that will last for a little more will save you a ton than buying cheap bargains every once in a while.
What someone else needs, has nothing to do with your priorities. Looking at others is just an excuse to satisfy your ego in order to stay on trend and show off your wealth. Those who inherit stealth wealth are the real winners. They disregard what society deems as the image of what wealth should look like and focus on what is best for them, the frugal and happy way. Being cheap will ruin your happiness because nothing is prioritized except saving a few extra dollars. Being frugal allows you to still save, prioritize your needs, focus on relationships, and enjoy life, even more, when saving is part of your life, not a forceful act.
Readers, how do you strike a balance between being cheap and frugal? After a few months of trial and error and acceptance, it has become an enjoyable part of my spending journey and I hope it does for you too.
Happy saving but donât forget to live!