The term “cheap” gets misused in quite a negative way. You think when someone is cheap that they simply hoard money and refuse to spend in any way possible, even if it is for something that would be deemed a necessity.
Being cheap isn’t about not spending but rather an eye on how to save, spend smartly and having the ability to do what more than 50 percent of the population doesn’t do: put money aside in a savings account.
When you live cheaply or, better put, frugally, you are well aware of two main elements of your spending: how much you make and how much you spend, and the former is always larger than the latter.
The frugal lifestyle is all about budgeting and paying close attention to your money. Those people are always adept at knowing any spots they can save, whether that’s curbing their daytime lunch visits to a fast food place or skipping the shopping spree and upping their 401K contribution with every raise they get at their place of business.
The trick to is to figure out how to live comfortably, and that isn’t code word for a pool, vacationing twice per year and having two or three cars when one will do. Living comfortably means taking what you make and going 20 to 30 percent below that number so that you’re able to save without sacrificing. That might include buying a $150,000 house instead of $200,000 (even if you’re approved for the latter number).
You might buy a used car and save thousands on one that is new. The adaptability is paramount because you’re not giving up but rather modifying what you need with something that hardly would be considered average or just serviceable.
Finally, you have to remember that being frugal and cheap aren’t the same. People who live within their means and are frugal still purchase quality over a product or service that is inexpensive. The inexpensive part means that they aren’t going to buy cheap shoes, when a more expensive pair that costs a hundred dollars is going to last five years versus buying $20 shoes twice a year for that same time period (roughly double the amount of that sole pair).
So go ahead, be frugal and feel fine doing so because in the end you’ll have money leftover to be able to save, budget and still not miss out on what you need to live the right way with money in the bank on your mind.
Previous: Splendid spending: Do you really spend wisely? Next: Lesser Means: Why living with less means more saved money