With the New Year upon us, we like to take time to go over the things that matter to us and set goals for the future. Why not set some ground rules and budget on the frugal side? Some people, however, view being frugal as being cheap. They are, in reality, two very different things. Let’s take a look.
Let’s use an example of someone who may need a new pair of shoes. It could be that the pair that needs replacing is in terrible shape. Perhaps they have a giant hole in the side of the shoe. Perhaps, half the sole has been torn away from the bottom and flops around like a dead fish when the person walks. Being cheap means that this person is going to hang on to those shoes for as long as is beyond socially acceptable. They may have needed new shoes 6 months ago, but this person is determined to have these shoes last another year or more because they don’t feel like spending the money to get a new pair. It doesn’t matter to them that it makes them look bad at work.
Now let’s continue our shoe analogy into actually buying a new pair. A cheap person will find the cheapest price possible without regard for how well the shoes are made or how long they are going to last. He finds the same pair he was wearing for $40. Of course there are much better shoes for more money, but they don’t care.
Let’s say this person has foot and ankle issues that can be solved simply by getting a better pair of shoes. They still don’t do it. It could be that this person’s shoes that are needing to be replaced are only about a year or so old, maybe even less. And they keep going back to the same brand of shoe that is giving them problems and not allowing them to last. They still don’t change.
Someone who is cheap tries to save every last penny and may complain about spending. We’ve all seen this type of person. Some of us may have been this type of person at one point. I know I have been, especially with the complaining on spending money.
Now being Frugal is different. When you are frugal, you make a conscience decision to not spend money on the things that are unimportant to you so you can spend money on the things that are. You see value in examining how long something will last and if it is worth it to spend a little extra money to have a lot more value.
Let’s look at our shoe buyer again and flip them around. This person is frugal about shoes instead of cheap. They have a pair that is in need of replacing but it’s been about 3 years since they purchased them. Looking at them, you can tell they are worn, but they don’t look that bad. The person decides it’s time so they can look their best at work. They decide to go out and buy the same pair. This pair costs $80. So by spending double the amount they are getting three times the wear out of them.
Another upside to spending a little bit more is, because the old pair of shoes still doesn’t look bad, it’s ok to wear them every once in a while. This can further the life of the new pair significantly. It might be that the new pair will be around for 4 years rather than 3 because they can occasionally wear the old pair either to work or out socializing.
All for spending a little bit more.
One More Example
To continue on with the shoe example, allow me to give you a real life example from my own life. Back in my cheap days, I bought a pair of shoes made by Avian. They weren’t terrible, but they were $35. After about a year or so of having them, the inside lining that the bottom of my foot sat on started to dislodge and move around a lot. It got to the point where every time I put them on, I would have to slide the inside of the shoe back down toward the toe where it was supposed to be and have a little bit of comfort time before it naturally slid toward the back when walking. It stunk!
A few years ago, I started to get in to running and decided that I probably needed to invest in some good running shoes. I didn’t want to hurt myself, and the cheaper Avian shoes were not nearly comfortable enough for running. This was during my transition from being cheap to frugal. I invested in some Nike Free 5.0 running shoes. Let me tell you, AWESOME shoes! They were about $100 on sale and well worth every penny! I’ve worn them out running (obviously), through several Disney World trip (generally walking about 10 miles a day), and they are still in great shape and as comfortable as ever. They were well worth the extra money.
It is absolutely ok to be frugal but it’s not worth it to be cheap. There are numerous other examples I could give on how spending a little extra money will actually save you money in the long run. It is very true that a lot of times you get what you paid for, and I encourage you to do a little research on price and quality before making some significant purchases.
If you are struggling to become frugal, how do you make the transition? How do you go from being cheap to frugal? One of the best ways is to determine exactly what you find valuable.
Our next post will deal with that.