When Being Frugal Doesn’t Pay
Whether you are frugal by nature or have adapted your lifestyle to deal with the changing economy, frugal living is certainly experiencing a boost in popularity. Living a more frugal lifestyle can take a bit of getting used to, especially if you have never paid close attention to your spending in the past. The key is understanding the difference between being frugal and being cheap. When it comes to managing money, like everything else in life, moderation is key. You must be able to find the balance to ensure you are not skimping on areas where you would have been better off spending a few more bucks. The following scenarios show why sometimes it’s better to spend than save.
Safety
There simply is no price too high to ensure your personal safety and the safety of those you love. Whenever you are faced with a decision to pay more to increase safety, those dollars are well worth the benefits. Consider this when making decisions about child care, maintaining your home or car and buying adequate insurance.
Time
Some people take living a frugal lifestyle to the extreme. Yes, there are benefits to cutting coupons and taking the time to shop for the best prices, however not if it consumes your day. Few people have the luxury of plenty of excess time on their hands these days. We live in a fast paced society where work, family and social obligations consumer every hour of the day, therefore your time is valuable. It is important to balance the time you spend in being thrifty with the savings you actually receive. You might find some efforts really aren’t worth the time.
Quality
Saving money by purchasing inferior quality products is often penny-wise and pound-foolish (to borrow a cliche). If you have to buy a poorly made item three times over to get the same value of paying a bit more the first time, you probably aren’t seeing any real savings. When you get into bigger ticket items like used cars or home renovations, being frugal can be downright expensive when you end up paying for repairs or other expenses that could have been avoided. Some things are simply worth paying more for.
At the end of the day it is more important to know that you spent your money wisely than how much money you saved. By paying close attention to where you can shave costs and lower expenses you can adopt a more frugal lifestyle without sacrificing quality. Save where you can and spend where you should and you will likely be more successful in adjusting to a simpler way of life.
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Thanks for the link. However, I think I may be a bad example for what you’re trying to say with that paragraph. I don’t clip coupons. I cook from staples (10 lbs bags) and coupons are usually associated with preprocessed food. We buy loss leaders (meat, vegetables, fruit) and eat according to that, so no need to shop around. Not working for money means I have anywhere from 40-100 hours more than those who work for a living. In many cases the hourly wage being thrifty is quite a bit higher than the wage post tax, post commute expense, post business attire expense, etc. one would otherwise earn. For instance, I can make laundry detergent at a rate of about $60/hour (spend 5 minutes to save $5). I never earned even close to that much when I used to work for a living and that’s before all the working expenses of tax, etc. are included.
In terms of quality, frugality is not the same as being cheap. Many frugalites think more like a business owner than a consumer when it comes to purchasing stuff. How long will it last, what kind of service will it get me, what are maintenance costs, are there any liabilities? You can buy one pair of $200 shoes that will last you 10 years. Or you can buy 10 pairs of $40 shoes that will each last a year. The frugal choice is the former choice. The moderate choice is the latter, because forking over $200 for a pair of shoes… that’s not easy for most people.
“Saving money by purchasing inferior quality products is often penny-wise and pound-foolish”
One example of this is cheap shoes. A good pair of shoes can last 5-10 years and protect your feet, knees and back. A cheap pair can cost 1/4 that of a great pair but last 3 months and ruin your body.
I hear you on the time vs. money dilemna. But this recession is not an economy where money-making opportunities can make up for a non-frugal lifestyle.
I see a lot of nodding heads when I do public appearances and say, “Yes, these money-saving tricks take some time. But a lot of people in Michigan and Ohio have more time than money these days.”
Well that depends on how much extra money you make
Nice post. I remember having a BBQ party, and one of my friends was always a bit ‘too frugal’. He bought a ‘fast fry’ steak that was more than a few days outdated and he ended up puking up in front of everyone at my party.
Like you said, sometimes it doesn’t pay to have a frugal lifestyle to the extreme. Balance and ‘within reason’ are important words to keep in mind. Sometimes, I would rather pay extra for a fresh steak than one that has passed its ‘best before date’.
Cheers
I think too many people confuse frugal with being cheap or they think that you cannot buy a high priced item if you are truly frugal. I have sensitive skin but care enough about my face to wear sunscreen. I can only use Oil of Olay on my face because it is the ONLY sunscreen lotion that does not make me break out. Frugal to me is buying the good quality, high priced lotion that does not give me a rash and then using coupons to get toothpaste and toilet paper at a lower price. I stay within my budget even with buying the expensive facial lotion.