In the world of saving money and meeting your financial goals I get dragged into this argument between people all the time. Why are so cheap that you won’t spend money on this or I don’t understand its only 10$. Let me go into the difference between these two concepts and how they affect my lifestyle.

What is Cheap?

Cheap in my opinion is how you treat all transactions in your life. This includes how people buy the materials they want to construct something with. It involves the ingredients that people want to cook with. It even impacts the type of repairs they are willing to get on your car. The cheap mindset is looking and all spend and thinking how can you get the end result spending the least amount of money. The direct relationship is only between end result and total money spent.

What is Frugal?

Frugal in my opinion is the relationship between personal worth and total money spent. When in the frugal mindset everything is a measure of personal worth. The key part about this statement is the personal worth! Everyone has a different type of personal worth! Some people think that the biggest and newest TV is their best worth. I think that traveling is my biggest personal worth. One of my good friends thinks fine dining experiences is their personal worth. This is the governing principle of frugal to me, you should be spending your money on things that you want to spend it on. It doesn’t matter if your mom or dad thinks it’s a waste of money to them. If you spent the money creating the memories you want than that money is worth it to you. That’s the concept of frugal and that’s the concept I use when I set my budget.

Determine what is important to you!

How do you measure personal worth for items or experiences? The only ways to know is try it, how do you know if you never try something! One of the worst things in life is going through and thinking about what if, what if I never did this! How do you even know if you will like or dislike something? I use the concept of taking small steps and moving forward to test out anything I like doing.

For example, in my personal experience, I didn’t even think I liked to travel that much or the concept of backpacking. Before my first backpacking trip I had only traveled to a few cities in the US always with a friend or a significant other. The familiarity of other US cities didn’t really challenge me to leave my comfort zone. My friend actually introduced me to backpacking my asking me to come along on a trip he was taking with a group to South America that was only 2 weeks. I figured this was a great introductory step to backpacking as I wouldn’t have to do all of the planning and I could experience the tasks of hostel qualities, transportation mechanics, and managing foreign currency. After this introductory step I proceeded to travel alone for 3 days in Seattle which made me realize that there was nothing to be scared of. By taking these small steps I am able to work through many of these

Want to try fine dining? Try a smaller less experience with close friends before going out on a 3 star Michelin dining experience!

Want to try sky diving? Try sky diving simulations or parachute training before the actually jumping out of a plane!

Taking a small step will build up that confidence that you can tackle the bigger task at hand. The goal of this small step is to help you develop your personal sense as to what experiences or things are worth it to you. This is a great skill to build and will help you follow your financial guidelines with more discipline. This principle will allow you to sacrifice that extra 3$ cup of starbucks coffee that you didn’t need in order to get what is really worth it to you!

Next time someone tells you your cheap, tell them no I’m frugal!