Are You Being Cheap or Are You Managing Your Money Well?

Copyright (c) 2007 Tony Mase

In response to a recent article, a reader asked (I've edited out the personal details):

"Here's a question I've been struggling with since reading your article 'Why You Should Always Buy the Best'."

"I like to buy good clothing. It's not cheap, but I like to buy on sale. The more on sale an item is, the better I like them. In fact, two dresses are on sale, I can buy two good dresses instead of one expensive one."

"Does that qualify as being cheap?"

"I just have a hard time buying things at regular price when in a few weeks it will be on sale (which is the price it should've been in the first place, in my opinion)."

"Anyway, that's my question. I'm looking forward to your answer and any advice you can offer."

Excellent question. :-)

Here's my answer...

Although there's sometimes a *very* fine line between the two, there's a distinct difference between "being cheap" and managing your money well and it's *vitally* important for you to know and understand the difference between the two.

Let's take a look at a few examples, beginning with the example above (please keep in mind I don't know the first thing about buying a dress :-))...

Let's say you had $100.00 to spend on a dress and found one you *really* liked for $100.00, but instead decided to buy one you didn't like nearly as much (or at all) for $50.00 just to save $50.00, that's "being cheap".

On the other hand...

If you were able to buy that exact same $100.00 dress you *really* liked on sale for $50.00 and were able to buy two you *really* liked for the same $100.00, that's managing your money well.

Here's another example...

Let's say you need or want to put gas in your car and on the way to going somewhere you were going anyway you pass two gas stations right next to one another.

Gas is $3.00 a gallon at one and $3.10 a gallon at the other.

All other factors being equal (the key word here is *equal*), you'd have to be a total idiot not to buy the $3.00 a gallon gas...

That's managing your money well.

On the other hand...

To kill a half an hour of your time driving clear the heck across town, way out of your way, just to "save" a buck or two would be "being cheap".

One more example...

Let's say you do your grocery shopping at one particular grocery store and you have certain brands you *really* like.

Taking a minute or two to thumb through their weekly circular checking for any coupons or sales for the items you *really* like and would buy anyway would be managing your money well.

On the other hand...

Spending four hours combing through the all the circulars that come with your Sunday newspaper, noting sales and clipping coupons, and then spending the rest of the day running all over creation trying to save a few dollars, buying stuff you don't even like just because it's cheap is...

Well...

"Being cheap". :-)

What's wrong with "being cheap", you ask?

In an article titled "The Constructive Attitude", the fifth article in his "Lessons in Constructive Science" series, Wallace D. Wattles, best known for his classic masterpiece "The Science of Getting Rich", said this on the subject:

"... if you wear cheap clothes, eat cheap foods and surround yourself with cheap things to "save money" you will put yourself in the mental attitude of cheapness and inferiority. You will think of yourself in connection with cheap and inferior things, and so will see yourself as a cheap and inferior person. The cheap and inferior within you will be brought to the surface, and you will never do your best. You will be incapable of exerting your whole power, and by the law of reaction, cheap and inferior things will move toward you."

As I said above...

Although there's sometimes a *very* fine line between the two, there's a distinct difference between "being cheap" and managing your money well and it's *vitally* important for you to know and understand the difference between the two.

Knowing and understanding this distinct difference and applying its underlying principle to your life could well make the difference between your being wealthy and your being poor.

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