Hi, my name is Nelson, and I have a confession to make.
HI NELSON!
Uhh, hey everyone. I’m here because I’m an alcoholic.
Sorry, wrong therapy session. I’m actually here because I’m a cheap bastard.
It’s true. How am I a cheap bastard? I’d count all the ways, but nobody has that much free time. I go to my parents’ house for dinner on a regular basis. The food is delicious, and most importantly of all, free. I refuse to upgrade my 27 inch picture tube tv because it works, dammit. I’d love to buy MLB.tv for the upcoming baseball season, since I’m one of 9 Canadians who actually cares about baseball, but I just can’t bring myself to shell out $125.00 just to watch baseball.
I have the money to do all of these things. I could buy a new tv and the baseball package and it wouldn’t affect my finances negatively in any material way. I could even upgrade to the fancy receiver that has a PVR attached, meaning I could watch Storage Wars whenever I wanted.
But I resist. Do you know why? It’s because I’m cheap.
Back In The Day
The personal finance blogosphere has been having this debate since approximately 1992, back when personal finance blogging was a bunch of guys passing around cheap Xeroxes of personal finance articles. (Note: this may not be true) The overwhelming majority believe that we’re not a bunch of cheap people. Rather, we’re frugal.
The differences between cheap and frugal are multiple, but are pretty simple. Frugal people are willing to spend more money on a quality item, since that means their cost per use is minimized. Cheap people, meanwhile, just go find the cheapest item they can find, quality be damned. Frugal people are willing to buy stuff that’s important to them, cheap people aren’t. Frugal people are willing to invest in their future, while cheap people won’t spend money on anything, even something that will benefit them in the future.
Cheap or Frugal?
Are you kids ready? I’m going to blow this whole frugal vs. cheap thing wide open. It’s simple, really. Just substitute the word ‘smart’ for frugal, and ‘stupid’ for cheap. Smart people are willing to invest in the future. Stupid people aren’t. And so forth.
Of course frugal bloggers are going to assume they’re smart. And, for the most part, they are. However, how many of them do you see buying the highest quality item because they think it’s important to them, when they could really buy an item that’s pretty good for significantly less. They take their thesis and overdo it, and the next thing you know you have people who like to cook buying knives at a hundred bucks a shot.
Here’s what really makes someone cheap. If it pains you to spend money on something, even if you really want it, you’re officially cheap. The money becomes more important than the items you can exchange it for.
We’re all guilty of it. How many times have you checked your chequing account balance? How many times have you said no to something – not because you didn’t want to do it – but because you stress about the amount of cash it would cost? How many times have your friends subtly (or not so subtly) made fun of you for being so obsessed with your finances?
Mirror Mirror On The Wall – Who Is The Cheapest (Frugalist?) One Of All?
I’m the first to admit I’m guilty of it. Sure, I can spend $10 or $20 and not feel guilty, because it’s such a small amount. Once we get above $40 or so, I get a little anxious handing over my cash. The feeling usually passes quickly. Once we get over $100, I will think about this purchase for hours afterwards. I usually end up being okay with my decision, it’s just the part where I hand over money that’s tough.
I’m working hard towards being financially independent. Every dollar I can put towards savings, or investments, or towards paying off my mortgage, is one more dollar I can put to work increasing my net worth. I can see the potential that dollar has, and how I can use it to improve my financial situation. Or, I can use it to buy chicken McNuggets. I enjoy chicken McNuggets. They are quite tasty. But eating chicken McNuggets are not going to get me rich, except that one time I won $20 for eating more McNuggets than my buddy. I ate 80, in case anyone is wondering.
I am clearly a disgusting person.
Look, life is about choices. I know that’s cliche, but it’s the truth. I can make the choice to spend my money on stuff, or I can make the choice to put it to work in an attempt to make more money, which eventually snowballs into being financially stable enough to be able to afford to retire. That’s why it pains me to spend money, and that’s why I’m a cheap bastard. It’s not such a bad thing.