Am I “Cheap” or Just Being “Smart with My Money”
I've said it about myself. I'm cheap. In part, I say it because it's somewhat true. But as we've gone through the last several years, where inflation has dominated our economic decisions, I found myself wondering am I really cheap or am I really smart with my money?
My wife called one afternoon to tell me about a little excursion that she had where she was getting a host gift for a reception. She'd got a few things that one might normally bring as a thank you for inviting someone to a party. The reason she called to tell me about it was that what she had purchased was ridiculously high-priced. And to be honest, we've had this conversation on a number of fronts with a number of issues.
There's no denying that the cost of most things is noticeably higher. But that's not what makes me consider myself cheap. I'm the guy who buys a great deal of his clothes from Amazon. Not my dress stuff, that I would wear with clients, but what I wear every day. It looks nice, generally, but it's not extravagant. I'm the guy who holds off buying cars for as long as he can. I'm the guy who is trying to figure out how to reduce his morning Diet Mountain Dew costs on a regular basis. I like my money in my own pockets.
But does that actually make me cheap? The difference between being "cheap" and being "smart with your money" can sometimes seem subtle, but it largely comes down to mindset and approach to spending.
When someone is being cheap, I think their focus tends to be on finding the lowest price, often at the expense of quality. This short-term mentality prioritizes immediate savings, even if it means buying items that may break down quickly or need to be replaced sooner than expected. In contrast, being smart with your money involves balancing cost with quality, thinking about long-term value rather than just the upfront price. It’s about making purchases that may cost a little more now but save money in the long run by lasting longer or delivering better results.
Another key distinction is thinking about the future. A cheap mindset often looks for ways to cut costs in the moment, without considering how those choices might lead to additional expenses down the line. For example, choosing the cheapest option might save money today, but it could end up costing more in repairs or replacements over time. Being smart with money means thinking beyond the immediate cost and considering the overall return on investment. Being willing to spend more upfront when it will pay off over time, whether that's through better durability, higher quality, or improved performance.
How financial decisions affect others is also a telling factor. A person being cheap might go out of their way to avoid spending money, even if it inconveniences others—like not tipping appropriately or expecting friends to always cover the bill. Being smart with money, however, involves finding ways to save without negatively impacting relationships or cutting corners in ways that feel unfair. It’s about making choices that work but also respect the people around you.
There’s also a balance between being mindful and overly frugal. Someone who is cheap may refuse to spend even when it’s reasonable or necessary, often leading to missed opportunities or a reduced quality of life. Smart money management, on the other hand, means being thoughtful about your spending—knowing when it makes sense to save and when it’s worth investing in things that improve your well-being, growth, or happiness.
In the end, being smart with money is all about making informed and balanced decisions. It's not just about spending less but spending wisely, while being cheap is focused solely on minimizing expenses without fully considering the long-term effects. When I think about my choices, where I spend my money, it is on my family, our health, our time together, and on helping others. And while I may be a little too careful with my own spending, when I think about this issue, I am not “cheap” when it comes to the people and things I love the most.
