Thursday, 27 August 2015

Frugal means cheap! or does it?

I pride myself on being cheap. Not super cheap but cheap enough.

But what does being a cheap person mean? Here's a definition of cheap.

1. Relatively low in cost; inexpensive or comparatively inexpensive.
2. Charging low prices
3. Of poor quality; inferior
4. Stingy; miserly.

I hate spending money. Some people tell they get a rush while they are shopping but I on the other hand feel sick to my stomach. In the former case I believe it is the same rush as people get when they are gambling. Spending money to me is gambling because that is what I am doing with my future.
Obviously there are necessities and don't get me wrong I like to have the occasional gadgets around the house but I try not to pay full price. I think maybe that full price gets clarified as well. Not everything I buy is on sale but I usually only buy it after it has been around for a while and I have done my comparative homework on it.

Lucky for me, my wife is fully on board. One might even say that she is steering frugality ship!


What does it mean?

Let's go back and look at the definition of cheap and then my onion on what it really means:

Line #1 "Relatively low in cost;inexpensive or comparatively inexpensive".

Why would anybody pay more for the same product if they can find it cheaper somewhere else.

Line #2 "charging a low price"

Well this is a good ting isn't it. Isn't it foolish to pay more for the same product if you can find it cheaper. To me this is going out to your upscale restaurant when you can get the same steak for at least 1/2 the price if not in some cases 10% of the cost. As with nearly everything in life there are exceptions but should not be the norm

Line #3 "poor quality or inferior".

OK now here is where cheap and frugal take too different roads. different will find products just like in line 1 the people that are cheap will you will buy the cheaper products instead of the more expensive product that is actually better who by the inferior product instead of the superior product which is better no matter what my number for

Line #4 "being stingy or miserly".

Now this is putting yourself ahead of others. If you out for dinner and you have a coupon to save 20% of the meal that's good. That's being frugal, but if you go for dinner use your coupon and then only  tip the server based on the reduced price and not the original cost, that's being cheap or miserly. In what way is it fair that your server has to be negatively for their employer possibly a major corporation giving you a a big discount. This person is actually counting on your the tips from the table to possibly buy their kid a backpack for school or a Christmas gift, or whatever, anyway you get the point.

When it comes down to it I've had to learn #3 more than once. In an attempt to save money I have bought vehicles that were not exactly what I wanted or need but were cheap. In the end this vehicle ended up costing my family more in fuel, more in repairs, and more in dissatisfaction the the other vehicle would have. I have bought the bottom of the bin gadgets that had less than half the capabilities than the basic good model and had very little use out of them and ended up purchasing another that had all capabilities the capabilities I was looking for.

The take away

The moral of the story is that if you are frugal you will save money and be on the path to financial freedom but if you are cheap you will, more times than not, spend more money in the long run and be possibly cause financial harm to others.

Do you have a story you want to tell, leave me a comment, I would love to hear about it!

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