Are You Cheap, Frugal, or Smart With Your Money?

by Kristina on March 21, 2011 · 4 comments

Being Frugal can mean something different for different people.  For some of us being frugal means getting the most out of a product for the price that we paid, for some of us being frugal means getting the best discount on an item that we are buying, and for some of us being frugal means saving every dollar that we earn that we don’t use to pay for our basic living expenses.

What does being frugal mean to you?

According to Yahoo Finance being too frugal can hurt our finances more than it can help us.  They discuss the different myths about being frugal in their video titled Top 5 Ways Being Too Frugal Can Cost You.  There is a fine line between being frugal and being cheap; there is also a fine line between being frugal and simply managing our money wisely.

Here are 5 Major Myths about Being Frugal:

Price Trumps All. Just because an item is cheaper doesn’t mean it is a better deal.  If we cut price corners we could also be cutting quality corners.  If we buy something just because the cost is lower it could break sooner or malfunction quicker.  Therefore, we will have to pay more to buy a better model or get the item repaired later.  As the old saying goes, we get what we paid for.

Outlet and Discount Stores Sell Identical Merchandise. To my understanding outlet stores sell old models of merchandise that hasn’t been sold from previous collections or seasons. Discount stores sell merchandise that they need to liquidate get rid of to make room for new merchandise.  There may not be a difference in quality, but there may be a difference in trends, age, and warranties.

It’s Always Cheaper to Fix it Yourself. I completely and totally agree with this myth.  I am also living proof that it is true.  However, that is probably because I couldn’t change a light bulb, and I prefer to order take out than cook and clean dishes.  I definitely believe in paying someone to get the job done right…the first time.

Dollar Menus Offer Great Bang for Your Buck. As a vegetarian, I am not a big believer in the dollar menu.  I believe the portions are small and the quality is low.  We end up paying more money later for another meal when we get hungry.  Once again, we get what we pay for.  Low cost also means low quality.

Bulk is Better. I love shopping in bulk, but I also believe that it can be an unnecessary waste. Our great bulk purchase actually makes us spend money that we would otherwise not have spent.  It may be a good deal, but if we don’t use it and throw it out, it is just wasted money.