#FinancialResponsibility #Frugality #Savings
The Difference Between Financial Responsibility and Being “Cheap”
Understanding Financial Responsibility
When we talk about being financially responsible, we are referring to the act of managing your money in a way that ensures long-term financial health. This means setting and sticking to a budget, paying bills on time, saving for the future, and avoiding unnecessary debt. Financial responsibility involves making informed decisions about where your money goes and planning for the future.
What It Means to Be “Cheap”
On the other hand, being “cheap” or overly frugal can have negative connotations. While it’s important to watch your spending and avoid frivolous purchases, being cheap often means cutting corners in a way that negatively impacts your quality of life. This could mean sacrificing important needs for the sake of saving money, or refusing to spend on things that would bring value and happiness to your life.
Finding a Balance
It’s crucial to find a balance between being financially responsible and being “cheap.” Financial responsibility involves making smart decisions with your money that align with your long-term goals, while being “cheap” can lead to short-term savings at the expense of your overall well-being. It’s important to prioritize your financial health while also allowing yourself to enjoy the fruits of your labor.
Signs You’re Being Financially Responsible
– You have a budget and stick to it
– You prioritize saving for emergencies and long-term goals
– You pay your bills on time
– You avoid unnecessary debt
– You make informed decisions about your spending
Signs You’re Being “Cheap”
– You refuse to spend money on important needs
– You prioritize short-term savings over long-term financial health
– You cut corners in a way that negatively impacts your quality of life
– You miss out on opportunities for growth and happiness due to a fear of spending money
In conclusion, being financially responsible means making smart decisions with your money that align with your goals and values, while being “cheap” often involves sacrificing important needs for the sake of saving money. It’s important to find a balance between the two and prioritize your financial health while also allowing yourself to enjoy the benefits of your hard work.
Financially responsible is maximizing long(er) term utility.
Buying a $100 pair of sneakers because they’re fashionable for a season is irresponsible. Buying a $100 pair of well made dress shoes you’ll be able to wear for five years is responsible. Buying a $30 pair of cheap dress shoes that fall apart in 8 months and give you back pain because they don’t fit right is cheap/miserly.
Financially responsible often comes with a higher upfront cost that is realized over time.
Being cheap is using free napkins to dry off after a bath. Being financially responsible means buying good towels but not new ones for every style or fashion change.
Agree with the previous comments. But also, ask yourself why you are asking the question in the first place. If it has anything to do with what anyone else thinks, they can go fuck themselves. Do what is right for you.
“Cheap” in a harmful way is being penny wise and pound foolish. Not changing the oil on your car because you don’t want to spend the money. Eating the most unhealthy, worst food possible because it’s cheapest. Buying the cheapest possible item that will fall apart in a week when the quality one that will last years costs just a bit more.
Anything that is a short term savings that results in much larger long term expense.
As long as you’re not doing that, be as frugal as you want to be.
It’s only up to you to define. It’s both a practical thing (“I won’t be a burden on others for at least 3 months of something happening to my income”) and a personally subjective thing.
If you spend money on a thing you are questioning, then end up broke asking for help in a year, will others judge you for buying the thing? Will you judge yourself? This might be a decent guide to start from if you’re currently lost on what you value in life.
It will also take some time to recognize different investments and what is worth it or not. People love to shit all over luxury item status symbols – but I can say 100% ignoring those is *not* the way to live if you are in your dating years or are in some professions. It’s all quite individually and situationally dependent.
No it means spending what you can afford. I grew up poor and have a hard time spending money. However I have learned when I do spend money its not on junk. But what I hope to be better quality items.
I think you are in the process of building this experience. Spending almost no money will reflect in your bank account. then you’ll realize “oh I am actually starting to grow a financial reserve”. it takes a few months and a few unforeseen payments to get the experience how much money you can spend and still have savings. when this kicks in, stick to the recommendations in this thread: quality items usually last longer and you’ll save money down the road. don’t save too much on fun. few people find their gf/bf while sitting at home…
Financial responsibility is knowing the difference between wants and needs and acting accordingly when your emotional impulses tell you otherwise. Cynically, every advertisement is trying to emotionally separate you from your money. The worst are the debt sellers – credit card companies. What’s in your wallet? Hopefully, money! Once you can effectively immunize yourself from the desire to spend on useless things, you’ve won.
It’s more of a question can you really afford this thing, than anything else.
In your case you are talking about removing debt and that is your goal and priority. In this case it seems that something outside of necessities shouldn’t be a priority right this moment. But it doesn’t mean that you shouldn’t buy clothes, appliances or whatever else when required, or go for a knock off that falls apart in a month. You just understand value of things not based on abstract things like marketing brand value or how “hot” it is, but by what specific value it brings to you.
When I had bought property and made renovations, 1st year of ownership was a major pain in the ass. It was downright miserable, but it was calculated misery by us as we knew what our goal was and endgame. After those debts were cleared a year later we bought a lot of things we actually wanted because we could afford it (and never in debt). But during that 1st year, we weren’t eating out, going to cafes (excluding a very occasional coffee to go), buying electronics or whatever else. The bare minimum.
I had to replace a phone back then and bought some cheap chinese one with average functionality. It was cheap enough not to bother us financially but as expected it was falling apart a year later. Since our debt was cleared by then I went and bought a top of the line phone as I always do that I still use to this day for 6 years now, it’s kind of time to replace it but even today it’s not a rush, I simply don’t care much, functionally new phones are the same as for the most part progress is nonexistent. On the other hand while I could buy a cheaper equally robust vacuum cleaner at home, I overspend because it made my wife actually happy every time she uses it for years now, but again since we could afford it. I think your own mental stability and happiness is also important when you live your life, if you are miserable for no specific reason there is no gain. Misery is tolerable when you have a goal in mind.
Being cheap hurts you or others.
Being frugal is maximizing your money’s power.
I know, people associate budgets with being miserly, but a budget is also *freeing*. If you have enough money to hit your needs and investment goals, then guess what? you know you can spend freely.
Financial responsibility is having a reason and a plan for the money you spend. Being “cheap” is avoiding spending money whenever possible, even if it decreases your quality of life.
Financial responsibility does NOT always mean avoiding spending money on “fun” and unnecessary things. Buying a really fancy car CAN be financially responsible if you budgeted for it, saved up the money to pay for it, and didn’t make any meaningful sacrifices to get it. It can also be horribly irresponsible if you just Uber to the Ferrari dealership and take out a 13 year 13% interest loan to buy it.
Being financially responsible:
* Researching job prospect before taking out a 150k loan for college.
* Not taking out loans for *wants* without a solid plan or contingency plan on repayment.
* Paying off your credit cards without interest.
* Buying a 10k used card over 30k new car if you can’t outright pay for the new car 2x over.
* Ensuring you have enough to fulfill your *needs* and those of your existing or future potential dependents.
Being cheap:
* Re-using paper plates
* Not having or offering drinks other than water to visiting friends
* Nickel & dime-ing when buying normal consumer stuff or arguing over <$1 amts
* Filling used shampoo bottle or diluting drinks with water
* Agreeing to go on trip but refusing to do anything that costs over $20, or doing unreasonable stuff to save, such as walking 10 miles over a 10 min taxi.
* Refusing to spend on *wants* for self or gifts for people even if you can well afford it.
Responsible means buying only what you need and spending enough to only have to buy it once.
Cheap means only buying what you need but spending the absolute minimum on junk that will have to be bought again.
To start with Create a budget for yourself that includes some reasonable fun items and that will help reduce the anxiety as long as you follow it, have a 3 to 6 month emergency fund, avoid debt, contribute to retirement
It’s personal, the key is if it is negatively affecting your life unnecessarily. I do some things many people would consider cheap like buying tons of generic/store brand when I really can’t tell the difference so it doesn’t negatively affect me.
One thing to mention is that it is definitely cheap when it negatively affects others. You have the right to decline any invitations, but if you do go out don’t do stuff like not buying your round of drinks or skimping on your fair share of dinner and thinking you’re being financially savvy.
Being financially responsible is planning for the future while not neglecting the present. Save some for retirement and an emergency fund, live within your means, and prioritize your spending on what makes you happy.
[Fuck You Money](https://www.youtube.com/watch?v=rJjKP8vYjpQ) means you get to decide what cheap/frugal means.
Avoid impulse buying. Many times I give myself a day or more before I make a purchase. It really puts things into perspective as to whether I really need it or not.
Being financially responsible/frugal doesn’t necessarily mean spending no/as little money as possible, it means saving where you can so that you have the money to do what you want or need to down the road. That can mean buying something that’s more expensive but higher quality that’ll last longer or require less repairs, etc.
Being cheap is spending as little money as possible at all times, even (and especially) when it inconveniences others. I think it’s fine to be a bit cheap if you’re the only person it affects, but when you start telling other people what they can or can’t do to save your own money (especially if it’s a small amount of money) then you’re probably being cheap.
One thing I’ve been having to learn is how to not be cheap on are things that make me healthy and for my body. If I want to go rock climbing because it’s a hobby I enjoy and keeps me active and healthy then I have to spend the 500+ upfront costs of all the safety equipment, the parks passes and all the gas I need to get to places. It can be a lot of money, but it directly feeds my body and mental health.
Whether your partner that shares your views on money or not
How others talk about you behind your back.
IMO, someone who is financially responsible prioritizes utility and usefulness first, money second and other things after. They will sacrifice aesthetics for a lower cost but usually won’t buy something crappy but inexpensive. They generally have long-term outlook.
Someone who is cheap will sacrifice everything for price, they will often spend as little as possible now, no matter what the quality they receive is. They generally have a short-term outlook.
To me, being cheap means overvaluing the cost of things and undervaluing your own time and experience and that of those around you.
For example, my parents sleep on a 30 year old mattress with no support whatsoever and complain about back issues. They can afford a new mattress, they just don’t value their better experience enough to spend the money, which feels cheap to me.
If they couldn’t afford a new mattress without going into debt or being unable to put food on the table, then I’d say they were being financially responsible by not buying a new one.
There is cash flow and then there is wealth/value.
My best, simple example everyone can relate to is do you buy the 4 pack or the 24 pack of toilet paper at WalMart?