Frugality Is the Bomb, Being Cheap Is Cringeworthy

Frugality is the right mentality and mindset to be in when you decide to take charge of your financial future. It’s a smart way to live without being wasteful. You’re trimming down your finances to get rid of any excess fat that you don’t need. All that’s leftover is the muscle and power you can use to build even more muscle.

Cheap is when you start tapping into the money muscle to build more money muscle. It oftentimes leads to a net loss, rather than a net gain. Penny wise and pound foolish is being cheap.

Things like going for the lowest cost insurance, doctor, food, rent, etc. can lead to devastating long-term losses. Sure, there are unforeseen unfortunate events that you don’t control. However, this is for the times when the dollar signs shouldn’t be the biggest determinant of making a purchase decisions.

Frugality is knowing when to go for the lowest cost option while being cheap is not. Accurately applying an estimate of the doctor visits or the number of miles you drive your car is a great way to go.

That is what frugality is all about. It’s about finding the best value for your dollar, not about buying the lowest cost item. It happens to be the cheapest cost at the end of the day, not that you’re actively seeking for it.

You become accustomed to it after making it a habit and it becomes easier, On top of that, you’re cutting down on waste and avoiding spending money on things you don’t need or want.

That’s the dream and the power of minimalism. You have and buy what you need and have a little leftover in your budget to buy what you want. Much less clutter.

Many Cheap Mistakes

There were so many mistakes I’ve seen others make that hurt their financial future. I’ve made many of them myself, as well as I’m not perfect. One of the biggest mistake I’ve seen people make is not SMASHING the share button for the Google algorithm named BERT 😊.

Just a powerful destruction of the share button for your friends to see how frugality can benefit their lives will be helpful. So without further ado, I will get right to the common money mistakes I’ve personally witnessed. 

Car Insurance

There are a number of people out there who only buy the bare minimum car insurance required by the state. The vast majority of the insurance required by the state only covers the other party for damages. Not you.

Theoretically, if everyone buys car insurance, it’s completely fine. Uninsured motorist insurance would be a scam and a complete waste of money. Purchasing it wouldn’t be practicing frugality, it would be downright nuts.

In reality, not only do people not have car insurance but hit and runs happen more times than we’d like to see. Someone rear-ended me in 2018 and I was terrified at what to do next. It was my first time having to do something about a car accident. All I could do was call the police.

Lo and behold, the person who ran into me did not have car insurance. I’m glad the minor accident depressed his tires and the cops arrived while he was changing the tire. He promptly got a ticket for not having car insurance and for driving without a license.

A person willingly driving without a license is not likely to repay his debts. Thankfully, I had uninsured motorist insurance so the money came from my insurance company, not him.

The frugality lesson comes in in the insurance products I bought. Four years ago, I consulted my dad on what insurance to get. He told me to get every coverage that I listed, even accounting for deer risk.

There are no deers running around where I live, so after the first six months, I passed on that coverage. So forth, and so forth. Cheap is buying the minimally required insurance, frugal is personalizing based on what you need.

Leisure

The biggest expense people cut out of their budget is expenses on leisure. That is a HUGE mistake. Leisure isn’t a want, it’s a necessity because without it your mental health takes a huge toll.

You need fun money to keep your sanity in check and clock off from the outside world once in a while. Frugality is not trying to save on this necessary expense. That’s being cheap.

In my college days, I would easily forego expenses spent on leisure because my income was limited. I was protecting my future. These days, I deploy the disposable income that’s in my arsenal. There’s no point in trying to save $1,000 to go on vacation to spend $500 for a therapist.

Lose temporarily to win permanently. There’s a reason why Henry Ford shut down his factories during Saturdays and Sundays. He understood one thing very well: it’s great for business. People were too busy working they didn’t have time to go buy a car.

In the end, Henry Ford’s business, productivity, and morale all went up. Not taking breaks frequently actually lowers productivity, not increase it. There’s a reason why you retain more information if you read a book for 50 minutes straight and take a 10 minute break.

It’s much more efficient than cramming for the entire hour. That is the definition of deep work. You may finish the book slower than the person who reads for an hour straight. But you’re not going to have quality retention of information.

Frugality Actually Works

This author asserts that frugality is just a cult and that it doesn’t work at all. She couldn’t be more wrong. If you read into the article, the argument is that frugality makes you miss out on big wins. Things like negotiating your salary, investing, or starting a side hustle will be thrown out the window.

No. Frugality allows you to have the leftover funds to actually invest, start a side hustle, and more. Just because you are practicing frugality, it does not mean that you are banned from investing forever. You can be frugal and increase your income at the same time.

In fact, that’s the most recommended path to take. It’ll get you there quicker than any other strategy out there. You can save that dollar at the grocery store and invest that dollar in the S&P 500. You’re not physically barred from doing so because you are frugal.

What she’s actually talking about is being cheap. There’s a huge difference between the two and she did a poor job defining the two separate terms. Cheap is avoiding spending an extra $100 a month on your groceries that’ll save thousands in medical bills down the road.

Frugal is finding a way to get the same grocery items but for an extra $90 a month, not $100. I personally do not ever pay retail price and do not ever pay full price. Using a credit card with a 1 – 2% cash back means you never pay full price either. Make sure to pay off the full balance by month end, however.

Frugality is Awesome

The light. at the end of the tunnel after years of creating a habit around frugality will yield you great results. It won’t get you immediate results and it may take 5 – 7 years before you realize the returns. Along the way you might question if all of this is worth it.

As someone who’ve questioned the decision before, believe me when I say it was worth it. For one thing, the greatest enemy you may have is yourself. Your inability to avoid temptation or spending on things you don’t need hurts you more than anything else.

There’s a lot of expensive enemies within yourself that you have to fight off. After college, I had the option to go all out and release all of the pent-up demand I had. Most of college graduates took this route. However, I still continued to live like a student and lived a low-cost lifestyle.

I was not above using coupons or asking for a discount. Getting the exact same thing for a cheaper price is a great way to live, in my book. There are definitely some ares in which I do want to cut costs on. I am not immune from spending on frivolous things.

I enjoy buying the occasional game for $5, or a smoothie that I can make at home. A nice dinner once in a while doesn’t sound bad to me as well. After I take care of all of my needs, I take care of my wants. I encourage you to do the same.