Am I Cheap Or Just Frugal?

I tend to notice when my neighbors get a new vehicle and I am sure others do as well.  I wonder if a couple months ago when I got solar panels installed if anyone noticed and what their reaction would have been.  Would it have been something around how much money I spent, going green, or realizing it was a way to save money instead?  It’s natural to see things changing around you.  I don’t think I am cheap, I think I have become frugal.  Though I have a long way to go, my life has changed a lot since I quit buying stuff without a purpose.

I try not to keep up with the Joneses.  That being said, I somehow convinced myself to buy a new car earlier this year.  I drove my previous one for over 12 years, so it’s not like a do the new car every 4-5 year carousel.  I like the new car, but am still considering trading it in, taking a loss, and getting a cheaper version with more miles on it.  It was not a smart long-term financial decision, but most car purchases aren’t.  I hope to just drive it for 10+ years and not worry about it anymore.  I have only put 5,700 miles on it in about 10 months, so at least I have that going for me.

I have a feeling most of my neighbors carry some combination of large car loans, student loans, and credit card debt.  I know several of them have much higher mortgages than I do, since Zillow gives you the last sale price of houses around you.  Some of them bought at the peak and I bought at the trough.  Some of them may have noticed that as well and could resent me for it.  I tend to think people create their own successes and failures, so I don’t judge them based on their purchases.  I will say when I see the 3 car garages overflowing with stuff, I get worried that another foreclosure will affect my home’s value.

Somehow the American way became who can accumulate the most stuff.  I was in my mid 30’s before I realized how much advertising, movies, and even people reinforce that cultural shift.  One day I realized that having choices was more important to me than filling my 2,500 square foot house with more furniture and other crap.  I have always been more of a minimalist when it comes to decorating, but sometimes those few pieces of furniture and are are still expensive.  Our new rule is pretty much stick with what we have and only purchase functional items at garage sales or at a steep discount.

Frugal living vs  being cheap.  What changed?

I used to spend more money on clothes, dining out, and other stuff I didn’t really need.  What changed?  Well, I want to see my kids more than a few hours in the evening.  I decided to start focusing on retiring early enough to coach their basketball teams and go watch their school plays.  I don’t want to work 50-60 hours a week and miss them grow up.  I don’t care if other people don’t like that we sometimes decline dinner invites or don’t want to go tot he outlet malls.  We still have discretionary spending funds, but they have been reduce A LOT.

Before that realization, I would buy a new softball bat for $250 or order a bunch of new shirts from Banana Republic just because they sent me a 30% discount code.  I still have that almost new softball bat 3 years later.  It has been used about 3 times.  Most of those shirts have been donated or sold at a garage sale.  Did I get much enjoyment out of them?  Not really.  I finally realized I wasn’t thinking about my spending the way I should.  The dollars in my checking account empower me now  instead of just being available to spend.  I constantly look for ways to increase our savings rate and stash more money away in retirement and investment accounts.

Needless to say, my Amazon Prime spending has decreased so much that we may drop it next year (especially since the price increase).  The Costco membership is now used for bulk savings opportunities.

All spending is based on a conscious choice now instead of just buying it without going through several steps:

  • Do we really need it? (most items never make it past the first question)
  • Can we get it cheaper, on sale, or find a used version?
  • Is it something we can just borrow?
  • Are we buying something that will last or just a cheap thing that will only make it a year?
  • Do we already own something that will work instead?
  • If applicable, can we just fix the item we currently have?

Interestingly enough, frugal living sometimes involves spending more money on a purchase!  Take a set of knives for example.  You can buy the $30 set at Target, or buy a $100 set on Amazon that can be resharpened and last for many, many years.  The Target set will get dull fast and probably break or rust within 2 years.  I have always leaned towards buying higher quality, so that was not much of a change for me.

I would direct people to Early Retirement Extreme to see some information about how to escape being a consumer and embrace frugal living.  His site is all about the content and he doesn’t hold back his opinions.  It really makes you think about what you need and what you want long-term (not what you want right now).  While I may not be as extreme as Jacob, I still think frugal living will help me be retired in less than 8 years!

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What about you?  Do you friends, co-workers, and neighbors focus more on appearances than retirement?

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13 Responses

  1. I’m all about conscious spending. And I agree with you that most things either aren’t needed or can be found used (at a deep discount). Sometimes it absolutely makes sense to spend more on something that’ll last for years and be used often, but other than that, good to go with something second hand!

  2. TaraGG says:

    Do you and your wife agree on the budget and spending decisions? My spouse and I tend to have different views on handling money and it has made the savings process more complicated than I like.

    • vawt says:

      Uh, well, we do for the most part. At first it was 90% me. Now we are much more in agreement on frugal living, budgeting, and retirement saving. Thanks for the question (hope i don’t get in trouble for that one!).

    • Jason says:

      My wife and I had problems discussing the budget at first, but when we realized it was beneficial for both of us to find an agreement, things settled down. I explained that without a good budget she wouldn’t afford to get new shoes, dresses or those nice little knick-knacks for the house that she likes to buy. And believe me, she jumped on the budget when she heard about this!

  3. moneystepper says:

    I certainly know people who do, but they don’t tend to be friends as people with this kind of personality (prioritise how they look, what people think about them, their new bag/coat/car, etc) aren’t usually the best people to be friends with.

    Mr. Money Mustache made an epic post earlier in the week about the difference between being frugal and being cheap. Being frugal is about being sensible whilst enjoying all the things that you love doing, whereas being cheap means that you give up things you love in the aim of saving a few pence.

    • vawt says:

      I saw his post after I posted mine (glad it was after so it didn’t look like a copycat post).

      I have been okay just telling people that I don’t have it in the budget to go out to dinner or do this or that. No one has really had a problem with it so far. I am very open about my plans to retire early, though I know many on the MMM forums say they keep quiet. Maybe my friends are just used to it already. Thanks for stopping by!

  4. Peter Wilson says:

    Cheap, frugal or SMART? Smart any day of the week. The only ones labelling you cheap are too ignorant to see how their spending affects their future. I know millionaires that still drive a 20 year old car – there’s a reason why they are millionaires and so many aren’t!

  5. Olivia says:

    I don’t think you are cheap at all! I think you are just playing it smart and thinking about the future. Installing solar panel is a great idea and it will surely help you save money while also helping the planet a little bit (it all adds up). And about the car: people have gotten used to it and some think they need to use it all the time. That’s wrong – it’s just like eating something that should be divided in 4 portions at once. The car should be used sporadically, when we actually need it and we should do a lot of walking.

  6. John says:

    Man, you make me feel ashamed of myself for spending so much money on stupid stuff I don’t even use. I really felt bad after reading this but I also feel motivated to actually use some money the right way and invest it properly. I will try to reduce useless shopping and create a clear budget for it monthly.

  7. Malcolm says:

    If you asked me 2-3 years ago I would have said I would get the $30 set from Target. I wouldn’t even gave it a second thought. It’s amazing how much my perception has changed – I now only look for quality and things that will last or have a bigger warranty on them. This way I know that if something happens, it’s either in warranty or I can fix it or sharpen it if it’s a knife.

    • vawt says:

      I was in the same boat for some things, but try to avoid the cheap stuff at all costs now. I will buy used, but not low quality!

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