Okay, we all know that being called “cheap” is usually something that is not a compliment. The fact is however that being a cheapskate is actually very good for your finances, and offers quite a few financial rewards, which we’ll take a look at below. Enjoy.
1) Paying less in interest rates. Saving up money ahead of time will allow you to avoid borrowing so much money and paying a lot working interest when it’s time to purchase a new home or automobile. Choosing a less expensive home is also a way that frugal people save, because they don’t let their egos talk them into buying a huge house that’s mostly empty.
2) Paying less than full or list price. Being frugal doesn’t mean you have to be non-social, it just means that you have to time things like going out for meals and cocktails (for example) with the times that restaurants have them at reduced prices. For example, if your favorite restaurant has a special every Tuesday night, arrange your schedule to be able to make Tuesday nights your restaurant night. The same thing can be said for groceries, clothing and furniture. By being aware of sales, using coupons and keeping your eye out for special deals from Avenue coupons, a frugal person will save a ton of money over someone who pays full price.
3) Borrowing to save. Frugal people love the library in their town because they can get books, music, movies and much more absolutely for free. If you think about how much you spend purchasing movies on DVD in one year, or music, magazines and books, this can really add up. Exchanging clothing with other people, going to Goodwill and not buying things as often as other people do give frugal people a leg up on savings.
4) A true appreciation for nice things. Most frugal people don’t buy expensive items on a regular basis but, when they do, they can appreciate them much more than someone who has tons of expensive baubles and bric-a-brac around their home.
5) The option to use your creativity. Many times it’s the frugal person who brings the most inspiring or surprising gift to a celebration, or decorates a birthday party the most interestingly. They save money by using their creativity and, in many cases, the results will be remembered much longer than many of the other presents given.
6) Frugal people recognize value. When you are aware of every dollar that you spend and/or save, it’s much easier to understand and recognize the value of a dollar. This recognition can very much help you to avoid impulse purchases and unnecessary splurging that many people indulge in.
7) The acquisition of new skills. When you are always on the hunt for the best prices or are a master of getting the most out of every purchase you make, you learn a lot of skills along the way are very handy, including repair skills, negotiation skills and so forth.
The fact is, frugal people learn a lot more lessons about how money works, and what value it has. Being frugal makes you think twice about your purchase habits and can be very helpful when budgeting, and will make a real difference by the time you reach retirement.
So the next time someone calls you “cheap” just tell them ‘thank you’ and give them a big smile.
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