Overcoming Cheapness (Blog)

[Savage]

Use this thread to discuss the following entry from Steve Pavlina's blog:

Overcoming Cheapness

[chrisrushton]

great post. this reminds me of the first books i ever read that were close to personal development. The rich dad poor dad books by Robert Kiyosaki.

The idea of saying "how can I afford this" rather than "I can't afford this" is something that struck a chord with me. By challenging yourself to get something you can't really afford at the time you push yourself to grow in financial intelligence.

[kattsand]

I can really relate to this! For the last two years I've been studying and living on a very tight budget.
Let's take my coffee machine for instance. First I bought this cheap coffee machine that cost me about $20. The coffee tasted like crap but it was cheap. After that I bought a new one that kept better temperature and made my coffee a little better but it wasn't good enough.
After a while I started thinking about what I really wanted. Coffee is one of the best things I know of so I thought: "What the hell, I might as well buy a real good machine that will last a lifetime"
I bought me a Moccamaster and a real fine grinder. It all cost me about $400 but now I really get the coffee I love and I still love my machine after 9 months of heavy use. I clean it on a regular basis and I really care for it to last this lifetime.

[ricky]

Very good article. One question:
How do you know if what you're buying is what you really truly want or you want to buy it because it's what is deemed to be the most popular and best by everyone else or because everyone else has it?
Sort of like keeping up with your neighbours or Joneses?

E.g. if one doesn't need the best computer but want it badly because everyone around has that computer. Is that really one's want?
Another example: iPhone.

[carenkh]

This experience has made me more understanding of why so many highly successful people have lavishly decorated homes and offices. They’re simply creating and experiencing what they desire — no compromises. When they get what they want, it helps them enjoy a more abundant state of being, whereby they can be more resourceful and creative.

One of my very first shifts in my thinking about abundance came several years ago - long before I had heard of law of attraction, etc. I was temping at a country club; I bartended, and they'd send us to different locations that needed extra people for events. I often got sent to the country clubs in our city, from the newer ones to the one with old, old money in it.

My first reaction to the country clubs was: "My gosh! $60,000 joining fee, thousands monthly golf fees, club restaurant minimums... think what they could be doing with this money instead! So many people just need a home!"

Then one day, something shifted, and I saw the beauty of the club. I saw the amazing view from the dining room, and all of the well-appointed furniture and amenities. I realized that members were paying to network, sure, but also, to ensure that they would be surrounded by beauty from the time they drove up in the parking lot to the time they left - the best service, the best food. They were paying for the guarantee of exceptionality.

I don't agree with membership policies at most clubs here - it's still a rarity to see anyone other than white families as members, even if the rule is "unspoken", and I don't know that I would choose to be a member if I could, but from that day, I understood a little better about why someone would make that choice.

I've also returned several times to Steve's post on the Abundance Mindset- it's helping open my mind even more, to acceptance and understanding, rather than judging someone for not making do with less and giving more.

I can feel the rust falling off those squeaky mind hinges!

(1001! A palindrome of posts)

[Bing Wu]

@ricky, it's funny you mention the iphone. I bought one last summer when 3G version came out. Didn't like it much at all, sold it on eBay in the fall. Definitely a case of me wanting something that everyone else thought was popular.

Generally the items that you really want are things that you buy for a tangible, physical reason. Steve felt more comfortable on new furniture. It made sense. It was better quality, it better served his needs. The best purchases I've ever made filled some practical need.

The iphone I bought, I didn't know much about it or its features/capabilities. I didn't think about how I would practically replace my Blackberry with an iphone, but went ahead and did it anyway. I couldn't think of one practical way that I'd see an improvement in my quality of life from an iphone other than that it was popular, cool and new. Now, maybe if you had a "need" or strong desire for being able to surf the web comfortably on the go, then an iphone is for you.

Of course, your intuition always has the answer if you close your eyes, take a few deep breaths and ask yourself why you want object X. The question is whether you will listen to it. I've gotten much better at listening to my intuition after failing to do so before some very large purchases )

[ricky]

Originally Posted by Alex Wu

@ricky, it's funny you mention the iphone. I bought one last summer when 3G version came out. Didn't like it much at all, sold it on eBay in the fall. Definitely a case of me wanting something that everyone else thought was popular.

Generally the items that you really want are things that you buy for a tangible, physical reason. Steve felt more comfortable on new furniture. It made sense. It was better quality, it better served his needs. The best purchases I've ever made filled some practical need.

The iphone I bought, I didn't know much about it or its features/capabilities. I didn't think about how I would practically replace my Blackberry with an iphone, but went ahead and did it anyway. I couldn't think of one practical way that I'd see an improvement in my quality of life from an iphone other than that it was popular, cool and new. Now, maybe if you had a "need" or strong desire for being able to surf the web comfortably on the go, then an iphone is for you.

Of course, your intuition always has the answer if you close your eyes, take a few deep breaths and ask yourself why you want object X. The question is whether you will listen to it. I've gotten much better at listening to my intuition after failing to do so before some very large purchases )

Thanks Alex. Yes, it takes practice before we can listen to our intuition. Again, the gut feeling, or intuition can be confusing sometimes. Not sure if what I'm hearing is really my intuition or what I've been conditioned by society, media etc to hear.

[Bing Wu]

The ego works on impulse. It relies on forcing you to do silly things before you have a chance to logically think them thru. When I feel the need to buy something and I seem to move other plans out of the way so I can go to the store at the first possible moment, that's usually my ego.

Things that I need because I need them, those are purchases that I know I need but I don't rush into making. i.e. I need a rice cooker but I don't make a special trip across town to get one. I'll look for one when I'm in the area.

The strong impulse to buy something is a good warning sign to wait it out, think it through and make sure I really need it. Recognizing this has saved me literally thousands of dollars.

[Dimond]

I've always been this way with clothes. I always was interested in good quality, good fitting clothes and never was interested or understood the cheap or thrift stores (accept occasionally) like most others would buy from. I found it way more time consuming going to these stores and seldom liked anything there. I don't prefer to overspend or buy overpriced designer clothes, but will definitely get items I truly like. You often can get them for great deals anyhow with sales and coupons. I find I truly appreciate most of these items and use them well. My mindset with clothing has always been the same regardless of my financial situation. Health is another area where I seldom compromise, preferring to buy good quality organic food, supplements and personal care items. By doing this, I've managed to not get any of the typical illnesses like cold and flues, as well as not waste time and money on doctors, among other things.

For me it's quite easy because I'm a minimalist and really have no need or interest in owning much. So what I do own, are items I actually want or need most of which are excellent quality. Life is so much more enjoyable when you aren't tied down by stuff, yet what you do own, you love.

[ricky]

@Alex - I think that's a good way of keeping track of your ego. Yep, there is a strong impulse to buy certain items and those items are usually associated with ego. I've also tried to resist buying items when there's a strong impulse. I usually hold off for a few days. Good indicator! :-)

[StacyT]

Originally Posted by Dimond

For me it's quite easy because I'm a minimalist and really have no need or interest in owning much.

I feel the same way - I don't like to have a lot of "stuff". I feel like it clutters not only my physical space, but my mental state as well.

My mom was one of 8 children growing up in a poor family, and she and my aunts and uncles have a definite scarcity mentality. It was not until a few years ago that I realized that I inherited this mentality from my mom and the rest of my family.

They are all "tag salers" - buying tons of junk as cheaply as possible. They buy things they don't even need just because it's cheap.

My whole house is full of hand-me-down furniture, and I've decided that I'm not buying a new couch until I can afford (in cash) to purchase the Pottery Barn living room set that I really want. I'm done with cheap junk.

[ohTen]

excellent article, and so true! my mother is a hobby sale-shopper and can't understand why i opt to pay full price for a few very nice things that will last me a long time, instead of shopping like a madwoman and amassing a bunch of stuff that i will rarely use and doesn't reflect what i really want (i also hate clutter). it's totally wrapped up in the abundance mentality. this summer has been particularly rough for me financially as it's my first real foray into living on my own. i am prone to get so wrapped up in the fact that i'm broke that i do end up compromising, but it just perpetuates the cycle ultimately.

this article has actually inspired me to sell an instrument of mine that has been lying around for a while. I could potentially get $2500 for it! Why i've been putting off selling it for so long doesn't really make sense to me - why would i deny myself the opportunity to get out of a situation that i don't want to be in? crazy, the human mind.

[backpocket]

Great article, though you certainly can apply it in other areas of your life too, instead of just the material stuff. Have people who you are truly grateful for around you, have a job you're grateful for, have a life you're grateful for, etc.

I can see how I can apply the concepts in it to other areas of my life. I play the guitar and I'm also learning the keyboard right now, and sometimes the amount of songs or genres or techniques to learn just boggles my mind. So instead of just picking one at random, I think it would be better if I looked at the options and go, What would I really enjoy playing? What aspect of my playing would I be grateful to improve right now?

[24evita]

Yeah, it is a great post and likewise I stronly relate to this.

Most of my life I lived in a family where every penny was counted. I learned hence to track every sale and dollar, and while this made me finanically smart, it also greatly shackled me to being dependent on numbers that in the end don't mean much.

Today, no more flyer reading and price comparing, etc. I have learned to free myself from monetary restraints, and while I am no richer than I was a few years ago, I definitely feel like it and it feels freeing and great!

[James81]

I can definately relate to the buying groceries part.

A year ago, when I finally made it back out on my own after my divorce, I discovered that I could go to a local budget grocery store and fill up my buggy for like $70. I thought I was really doing good with that because I could get all kinds of food for cheap (and, at the time, I was on an extremely strict budget).

As time went on, however, I realized just how trashy the food was that I was buying. Everything came in a box and was absolutely horrible for me.

Eventually I decided that skimping on groceries was a poor thing to do for my health. Even if I have to spend a little more, I decided I was going to buy more quality food.

Surprisingly enough, though, my grocery bill hasn't gone up THAT much. I'm probably spending like $100 per paycheck for groceries (as opposed to $70), and the food I buy is mostly fresh, healthy stuff.

So, I definately see your point.

On the other hand, though, buying more expensive does not ALWAYS mean you are getting better quality. For instance, most lawn mowers have the same types of engines in them (Briggs-Straton) and perform the same. There are other things that are like that too (like store brand food vs. name brand food that are all made in the same factory, but have different labels).

But I get your point, and I enjoyed this article. I too thought the "how can I afford this?" attitude seemed like a great way to look at it.

[entrepreneur7]

It's definitely a shift in mindset and a lot of people feel "bad" when they splurge on something when they shouldn't at all, there should be good feelings associated with a good purchase.

I think American's inherently feel bad about being too consumer based or materialistic but there really isn't anything wrong with wanting nice things and then getting them.

I'm a sucker for a good deal but buying something of high quality really does have a rewarding feeling. I'm glad to have read this blog post because it's easy to get stuck in the middle-lower income mindset of thinking extravagant spending is a waste when actually it's often times more wasteful to just settle for low quality things and therefore a lower quality of lifestyle.

-Brian

[Ariel Bravy]

Yeah, this is huge.

I bought a bed and bought the mattress I really wanted, and I enjoy it and appreciate it every time I sleep in it.

I'm picking up hiking gear now and I own just a few pairs of hiking shirts and shorts, yet I wear them all the time. Even when not hiking. They're so comfortable and awesome that I've effectively replaced my entire wardrobe with outdoors clothing.

Similar with hiking shoes. I went for top of the line trailrunners and hiking sandals, and they've become the shoes that I wear all the time. Every time I wear them I'm so happy and appreciative of them. I tell others how great they are, write positive reviews for them online, and so on.

I buy fewer things, but I'm SO happy that I do!

[Deergirl]

This is definitely a post for me. I consider myself frugal, maybe even cheap. My parents raised me with the idea to always save quite some money for later and so that's what I do, even though a little voice inside my head is yelling every once in a while "Why are you doing that?! You have the money know. Don't worry about pension, enjoy it now!". And I know that little voice is right. I shouldn't spend all my money at once of course, but I could buy myself nice and more expensive things more often.

I always go for the somewhat cheaper version of things. I do know it's gotten better compared to lets say last year or two years ago. But it's true what Steve writes: cheap shoes last for about 6 months and than you have to buy new ones. I have now invested in some nice and a bit more expensive shoes. I also bought a iMac (with a discount because a friend of mine works in a computer shop, how convenient) because I am a designer/illustrator. I wanted the best gear to use even in my free time at home.

I'm trying to buy the things I like food wise, but I tend to buy cheaper products instead of the more expensive ones of better quality. Overall I actually don't buy a lot of things, not because I'm cheap, but because I don't need a lot of things and because I don't have a lot of space to put or store things. At the moment I live in a house I share with three other people, which means I have one room for myself and my stuff. The room is about 16 square meters. I don't want it to be messy so I stick to the bare necessities (books, lots of them).

Anyway, it's something I should work on and I'm trying my best, but sometimes it seems as if there's a war going on in my head. There's one voice saying "Enjoy it while you can" and another one, the voice of my dad especially saying "Save up for later, you'll need it one day".

[ballhit2]

For me, feelings of abundance are drawn from having a nearly limitless amount of free time. In that context, extreme frugality simply means having to do less. The compromise is between theirwork and mydreamtime, not between possessing the awesome thing and possessing the servicable thing.

Albeit it's probably not a practical way to raise a family with expected western standards of living, it works wonderfully alone or with a partner.

But really I think the point of the article was not to be afraid of what you want. I just wanted to say, extreme frugality does not necessarily reflect the scarcity mindset. It could, especially from the POV of the successful blogger, but not always.

[ricky]

Also, how do you explain John D. Rockefeller?
He was one of the most frugal people ever lived and he was also the world's wealthiest person and world's first billionaire!
Even when he was extremely wealthy he used to count pennies. He used to give his kids pennies for turning lights off etc.
Anyone who's read his biographies would know this.

So, howcome with that mindset he became so wealthy?

[Wulfen]

Very nice post.

I actually made this change in the past with clothes. I always look for clothes that fit me really well and are stylish or cool, regardless of the price. Before, I bought cheap clothes and always looked outdated or nerdy. Now I try to look my best every day. And it reflects back on you. When you look better you feel more confident, it actually improves your emotional state.

In fact one good advice when you feel a bit down is to buy a new shiny ultra-cool piece of gear that looks awesome on you. Instant boost of self-confidence

However, one caveat. The most expensive item is not necessarily the best one (anyone into wines?). It's better to learn the details of the types of item you like most so you can actuall get the best quality/price ratio but not getting scammed in the proccess. But as a general rule we usually have some knowledge about the things that interest us (computer people might know a lot about computer and less about cars, but are more prone to buy an expensive computer than an expensive car).

Thanks for this great article Steve.

[StacyT]

Originally Posted by ricky

Also, how do you explain John D. Rockefeller?
He was one of the most frugal people ever lived and he was also the world's wealthiest person and world's first billionaire!
Even when he was extremely wealthy he used to count pennies. He used to give his kids pennies for turning lights off etc.
Anyone who's read his biographies would know this.

So, howcome with that mindset he became so wealthy?

From my point of view, wealth is a state of mind, regardless of how much money you have in the bank. There are many "rich" people who do not count pennies. There are many who do. I would venture to guess that the truly happy/free/abundant people do not count pennies and obsess over money. It is possible to have a lot of money but still have a scarcity mindset.

True wealth includes freedom from worry...counting pennies sounds like a lot of worry to me.

[ricky]

Originally Posted by StacyT

From my point of view, wealth is a state of mind, regardless of how much money you have in the bank. There are many "rich" people who do not count pennies. There are many who do. I would venture to guess that the truly happy/free/abundant people do not count pennies and obsess over money. It is possible to have a lot of money but still have a scarcity mindset.

True wealth includes freedom from worry...counting pennies sounds like a lot of worry to me.

You're right StacyT. I guess we have to rely on our feelings as guidance as well. If counting pennies makes us feel bad and poor then it's the wrong thing to do.
Many wealthy people can count pennies without feeling bad, to them it might just make sense as they're doing other things to prosper that they really enjoy.
But I've also seen people with money who're obsessing over pennies literally. They don't even buy snacks for themselves or their kids so when they come over to our house they'd finish all of our snacks! :-) But they had paid off their houses and cars.

[ricky]

What about using pirated software then? And downloading movies instead of going to theatre to watch them?
Lot of people seem to have the latest and the greatest piece of software and they take pride in telling you that they downloaded it.
A lot of people have those illegal satellite dishes that lets them catch channels from all over the world for free.
???

[Concojones]

Steve,

I too compromize very often, and I recognize the negatives.

My point of view: saving is never-ending. If you don't draw the line somewhere, it will turn into an obsession that never leaves you satisfied, and prevents you to enjoy the occasional expensive purchase you do make (or have to make).

So the question is where to draw that line. Steve, you say: just buy what you like. But then I wonder: will you ever stop buying new things? What about the hedonic treadmill? What's your experience?

[FreelanceWanderer]

I enjoyed this post. I actually wrote a similar article for Family Circle several years ago called "When It Pays to Pay More." In short, more money often equals better quality, especially when it comes to furniture and clothing.

I'd like to add, though, that when it comes to home furnishings, going cheap doesn't mean you have to sacrifice on decorating lavishly. You should go for top-quality basic pieces of furniture, especially upholstered pieces, but when it comes to other things you can get some wonderful items at a good price at Marshalls, TJ Maxx, Home Goods, Target, and Burlington Coat Factory. A good friend of mine is an interior designer, and although she can use very costly products if her clients want them, for her own home she uses accessories and small furnishings from these stores.

And let me tell you, her home is super impressive. You would never know that much of it was done on a budget. I've followed her lead and get tons of compliments on my house. I splurged on upholstered furniture, sunroom furniture, dining table, etc., but my window treatments, pillows, wall hangings, small pieces of furniture and more were done of the cheap. I absolutely love my house and feel abundant whenever I'm there. Sometimes I just lie on my sunroom sofa and look through the door at the other rooms.

So don't think that cheap can't = abundance! You just have to make smart choices.

Okay, a little off topic, but I couldn't resist.

FW

Write for Magazines: Write for Magazines

[mattmcc]

It's a good thing to analyze purchases beforehand and think about the actual value of the product rather than it's cost. However, I wouldn't agree that it would be applicable in all cases to not set any limits.

I have a friend who recently bought a car. He did his research and decided to take the course Steve mentions in this article. Instead of buying a reliable, used car with few miles on it, he bought a brand new 2009 Honda Civic. Now I think he's very happy with his purchase and he enjoys driving it but the first weekend he had it I noticed this dramatic change in him. We were at a restaurant and he just kept talking about being worried that someone is going to scratch his car. And this guy isn't a worrier. He still does bring that topic up occassionally and he has had his car for about a month now.

I think by buying the best, you also have to be cautious that your possessions don't end up owning you.

Of course, he did purchase the car with debt so that may factor in somehow.

[Ferrino]

I have noticed that many of the people that I know that buy cheap in order to have more money available seem to end up with no extra money!

[chrisrushton]

Originally Posted by entrepreneur7

It's definitely a shift in mindset and a lot of people feel "bad" when they splurge on something when they shouldn't at all, there should be good feelings associated with a good purchase.

I think American's inherently feel bad about being too consumer based or materialistic but there really isn't anything wrong with wanting nice things and then getting them.

...

-Brian

Yeah I like this way of thinking too. But I think another problem, especially recently, is people buying something on credit.

For example, I love Ferrari cars. They are beautiful. Sex on 4 wheels to me. However, I am a poor research student and can't afford one. Lets ignore that and say that I'm a moderately successful middle management type. I might be able to get credit for the car, maybe. But what happens when I buy it?

I have to work doubly hard to pay for the repayments, not to mention the cost of fueling and tyring the thing. In the end I have to cut corners with every other aspect of my life to afford to keep it. The end result is rather than actually enjoying the car I love so much, I end up resenting having bought it in the first place.

I'm sure there is a moral here. Maybe just buying whatever you want isn't always the best policy but there isn't anything wrong with desiring the best. I think of the guy from Cool Runnings who wanted to live in Buckingham Palace. Definitely reaching for the stars.

What I described is someone who is totally financially ignorant in action. Maybe the moral of the story is it's important to know what you want and work smartly to achieve it rather than settling for mediocrity.

(I smell a blog post for me out of this in a week or so since I used my catchphrase twice in it without thinking)

[DerekH]

Over the last two days I've had some very interesting experiences.

For the past year I've taken up sewing and fashion design.

But over the past week I thought it would be really cool to buy an old sewing machine, take it apart and refurbish it. I got really excited about it because I love taking anything apart.

On a local classified ad website, I responded to two ads both offering old sewing machines in cabinets (one said it was a Singer and the other said a Kenmore brand). One was listed for $15 and the other for $20.

I emailed back and forth with the one lady Sunday night and I picked up the machine on Monday for $15. Now the machine turned out to be a Sears Kenmore from 1973 which was awesome but it was missing some of the attachments and there was a bit of things 'broken' on it.

I wasn't upset with it but it wasn't exactly what I wanted. The other ad was actually advertised as a Kenmore, so I thought that even if it didn't work, I could possibly use some parts in it.

I felt somewhat scared because I actually had to call this lady to setup an appointment to see it (I'd rather email then call lol). Today at lunch, I called her and left a message. She called me back at 6 and I went over at 630 to look at the machine. It turns out she lives less than 5 minutes from my house. The sewing machine also turned out to be the EXACT same model as the one I bought on Monday. The only difference is that this lady had ALL the original attachments and manual and everything was in good working order.

I am so excited with it and I can't wait to tear one apart... and put it back together

What I realized after reading Steve's post was that I really desired this and I wasn't really concerned with the money. What was even more weird was that each lady was selling for the same reason. They were moving to a smaller place, didn't have room and they were both having garage sales this weekend. Too creepy for me .

Considering I own a sewing machine which I paid over $400 for... the machines I paid less for are actually much higher quality (all the parts are made of metal). I may just end up using the older machines.