Is there a difference between being thrifty and being cheap?

Is there a difference between being thrifty and being cheap?

By: Nathan Bush

The Law of Thriftiness

The the value of your decisions minus the cost of the decision equals the quality of the life you live. 

What is the difference between being thrifty and being cheap?

The Dictionary defines cheap as of poor quality; shoddy! Probably more importantly it defines thrifty as rare thriving or prospering.  Although people commonly associate thrifty living with being cheap, a thrifty is a fundamental principal if you ever want to obtain any kind of financial security. A  lifestyle of thriftiness  involves using strategies to reduce financial waste not purchasing low-quality no value products.

Does thriftiness matter?

Thrifty living can help you to save money and allow you to find additional discretionary income that is vital in saving, paying down debt, investing, and giving to charity. Thriftiness can maximize your ability to buy necessities and luxuries.

Who can be thrifty?

Anyone can be thrifty. Being thrifty means looking for ways to cut down on your spending. It implies living within your means and avoiding buying cheap things that you do not need.  This might sound like a difficult way to live, but a thrifty lifestyle does not have to be drab.

“If you want to have what the rich have then you need to think like the rich think.” With creativity and imagination, it is possible to reduce your expenses and continue to live well.

What steps can I take to be thrifty?

Step one is to know where you are at. Peter Drucker says, “if you can track it you can manage it.” Track your spending for at least 1 month. You won't really know how to live a thriftier lifestyle until you know where your money is currently going. Write down every bill and everything you buy. Then  take a look at it at the end of the month. You will see obvious categories to reduce the small daily expenses that many of us accrue.

Step two is to reduce your electric bill: Turn off the lights. Open a window and let in the natural light instead. Unplug laptop, desktop and cell phone power cords when not in use. Computers on standby can waste energy. Cell phone chargers can also waste electricity even when you are not charging your phone. Leaving electronics on can use a tremendous amount of extra energy, costing you money.

Step three is to do your homework before you purchase. With the new apps on smart phones scouring the Internet when you have to make purchases has become easy. You can compare prices from more stores in less time. Check your local stores as well as online sites such as craigs list and ebay to find the best price. Use coupons when you do your regular grocery shopping. Many websites offer free printable coupons you can take with you to the grocery store. Your local grocery store has coupons, as well as the manufacturing company’s, on their websites. At places you shop often enroll in their rewards programs. Do research on their websites for a variety of name brand product’s coupons. Coupons with store discounts can lead to major grocery savings.

Step 4 is to reduce your food cost. Eat at home most nights. When you do go out, look for available deals and discounts. If you are a frequent restaurant diner, consider purchasing an Entertainment Book for local restaurants (see link in Resources). These collections of coupons typically cost around $30, but provide 2-for-1 deals at local restaurants and places of interest. Preparing meals at home instead of taking the family to a restaurant can be a very thrifty idea. If you have to order our opt for take-out meals saving $3-$5 on the tip and $4-$10 on drinks.

Step 5 is to be creative. One article I read suggested organizing a barter exchange in your neighborhood instead of paying for services that your neighbors can perform for free. For example, you could mow a neighbor's lawn in exchange for her babysitting your child for an evening so you and your spouse can enjoy a movie or a quiet dinner. Another article suggested using a bicycle for short trips instead of driving. Bicycling not only saves fuel, but it can also help keep you in shape without an expensive gym membership. I even found this tip that is rather creative: purchase children's clothing at a consignment shop or on an online auction instead of buying these items new.

Step 6 is to organize your life and avoid waste. Things will last longer and this will reduce the number of shopping trips you make. For instance, it is tempting to use several sheets of paper towels to clean windows and mirrors. Instead, use one sheet, rinse it out let it dry and reuse before throwing the towel away. You may also want to reuse bath towels and try washing them once a week. Dry off and hang up your bath towel.

In conclusion being thrifty comes down to be resourceful and responsible with the small things in life, then you can go on to do the big things with the difference.