While it’s essential to be savvy with your money and save up for a rainy day, it is possible to get carried away and slip from frugality into downright stinginess. If you’re keen to stay safely in the savvy spending zone, here are five ways to tell if you are being frugal or just plain cheap:
You Insist On Doing Everything Yourself
Refusing to outsource to experts is a clear sign that you’ve slipped into the stingy zone. If you’re going so far with frugality that you’re not using a real estate agent to sell your house or tax agent services for your returns, you’re making life unnecessarily difficult.
This can leave you wasting time and energy on tasks that should be outsourced. It may also result in your house selling for less than you could’ve gotten or your tax bill being far higher than it might have been had you engaged a talented accountant.
Nobody Knows You’re Being Frugal
Some of the smartest savers are those who make clever financial decisions that aren’t even noticeable to others. Some great examples of this are:
- Allowing a percentage of your earnings to go straight to your savings account or investment fund through direct debit;
- Making your own coffee at home and taking it to work in a flask;
- Starting a fun side hustle like affiliate marketing in Youtube videos;
- Buying items that are just as good second hand as they are new (things like clothes, baby toys, or furniture);
- Hosting pot lucks and meals where everybody brings a dish, rather than eating out.
If you’re doing things like those listed above, your life is great, and you’re saving at the same time. This is a sign that you’re being frugal.
Other People Are Losing Out
Are you avoiding tipping when you eat out, even though some people only earn $26,000 dollars a year without tips? Are you persistently giving thoughtless, cheap gifts and offending your family?
If you’re being tight with your money, even when it comes to people you love and people who deserve more, you’re definitely being cheap. Being generous with others when you have the means to do so is central to living a rich life.
You’re Not Comparing Yourself
Humans are prone to comparison culture, and this was occurring long before social media. If you have managed to recognize that you don’t need to accumulate stuff, nor do you need to perfect everything about yourself to be valued by others, you’re likely saving money. This is a good sign that you’re being frugal.
Too many people fall victim to issues like lifestyle creep. This mindset sees people working to buy meaningless items when in reality, they won’t bring happiness – only financial woes.
You’re Reaching Your Financial Goals
The average age of Americans buying their first house is now around 47. Back in the 80s, it was just 31. If you want to reach financial milestones like buying a property of your own these days, you have to be frugal.
If you are managing to save money or have reached financial milestones like buying a house or getting a better car, you are likely being savvy with your money.
“If you want to be rich, stop acting like it.” – Thomas A. Stanley
It is hard to be frugal and avoid being cheap. However, if you maintain compassion for yourself and others whilst also staying determined to meet your goals, then chances are you’ll find a balance that’s right for you, and your bank balance will reflect it.