Budget 102: Thrifty or Cheap?

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Thrifty, coin conscious, frugal. These are the buzzwords I hear around town…ok, at the coffee shop, and before you ask, I brought my own. It’s cool. So frugality – it’s “in.” With the downward turn of our economy, most people are trying to keep to a budget. But sometimes, they are just cheap. What’s the difference?

Being thrifty or frugal is the epicenter of the spending spectrum. Like everything in life, there has to be a balance, and even careful people, in the extreme, can be cheap. Frugal or thrifty means being wise and careful with your spending habits. It is about getting the most bang for your buck, whether you’re at the dollar store or Disneyworld. Being thrifty helps you stretch you hard earned monies as much as possible without giving up on everything awesome in your life.

Being cheap is simply being reluctant to spend any money at all, even on necessities. It is being stingy and so tight that you begrudge every penny being squeezed from your tight bummed piggy bank. It’s about buying things that are low quality to save a buck, and in my opinion, it’s pretty selfish. I understand that sometimes fear is a factor, but when it comes to taking care of your family, cheap isn’t always better.

The key is in understanding the differences. Cheap people are concerned with spending the least amount of money possible. Thrifty people understand that spending is a necessity, but they are wise about how, when and where they spend their hard earned money. See the following examples below:

  • Thrifty is intentional with your purchases. You decide what you need and what you want, research a little or a lot, and find the best deal. Cheap is impulse buying when something is on sale because you think it can be bought for less NOW.
  • Thrifty grocery shoppers consider cost and health benefit as well as shelf life and quantity. Cheap shoppers buy the least expensive foods regardless of health benefits or true savings.
  • The “frugal” person budgets so that once a month (or more- it’s an individual scorecard here) eating out is a possibility, a luxury and pleasure. If you’re cheap, you might go out to dinner but leave an insufficient tip. (BOO ON YOU!)

Of course, there are more examples, but you get the point. So how do you find a balance?

Money is not evil. It’s a good thing because it allows us to provide for things we need and want. Know how to differentiate between being cheap and afraid to spend a penny and being thrifty. Of course, extravagance is at the complete opposite end of the spectrum – spending it as fast as you make it – BIG BIG NO NO! Find your comfort zone and act accordingly. Having the patience to decide what you honestly need vs. what you want is difficult. You need to understand how much income you have, and plan well to make the most of that money, and hopefully save some too. It is about being intentional, patient and sticking to your budget whenever possible. You will sacrifice, but you will also have peace of mind and hopefully, some savings in the bank.

Summing up, I admit to sometimes cheaping out. I like to consider myself frugal, well taught by my grandfather, but sometimes I get grumpy. I don’t always want to spend money on things that would honestly add to our lives because I want to keep us in the black. So I remind myself that my grandfather, wise man that he was (RIP), told me that being frugal is about prioritizing. It’s not about how much you spend, but about how you spend. So I am going to spend wisely to save for our future, but I am also planning for our present.

Stay motivated and caffeinated!😉☕

 

 

 

 

 

 

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3 Comments

  1. This is such good advice – your grandfather sounds like a very wise man too! 🙂

    It’s easy to get caught up in finding cheap things, but buying well and being frugal is better in the long run!

  2. Its a slippery slope from thrifty to cheap!! This post reminded me of that show on TLC called Extreme Cheapskate, where every episode follows a different person who does absolutely ridiculous things to save money. Some don’t flush the toilets, one baked cookies in her car on a hot day, etc. It’s crazy what some people will do!!

  3. “The key is in understanding the differences. Cheap people are concerned with spending the least amount of money possible. Thrifty people understand that spending is a necessity, but they are wise about how, when and where they spend their hard earned money.” Thank you for this. I guess I’m cheap, but I’m getting a lot better.

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