Rings a bell to anyone? Are you having a bad case of déjà vu?
Honestly, I often say as a joke that I’m cheap, since that is the general opinion of people faced with frugal choices. Oh, and I don’t really care what people think anyway.
I once said this in front of my aunt, who also tends to make wise choices with her money. She then said, “No, you’re not cheap. You’re just like me, you like to pay the right price.”
I thought that was pretty accurate.
Or, in the same vein, there’s the 3rd rule of acquisition for the Ferengi in Star Trek:
Never spend more for an acquisition than you have to.
Yes, I may be a little too inclined to assess everything in dollar terms. For some, that makes me Scrooge McDuck or a Ferengi, for you Trekkies out there. However, I do make judicious choices in order to get closer to my goals faster, and never at the expense of others. In fact, just by looking at my net worth‘s progression in the past year, I like to think it’s working out pretty well. It may be extreme for some, but I prefer this extreme to the alternative.
With the exception of my aunt, many people around me are very good at practising mindless spending, which I believe can only be detrimental to their financial health. By mindless spending, I mean those who spend on anything and everything, on the spur of the moment, without comparing or looking for a better price.
For example, I went to the hardware store with my mother the other day to buy something specific for her garden. As soon as we walked in the door, she saw a BBQ on sale for $250 plus tax. She immediately said, “I’ll buy it”!
In my opinion, if I hadn’t been there, she would have come home with a new BBQ. Fortunately, I was able to calm her down. I reminded her that she already has a working BBQ. That even though it’s not very new and shiny, you can still make delicious meals with it. You understand now what I mean by mindless spending? This potential expense was not thought out and planned in any way. She would have walked out of the hardware store with almost $300 less in her pocket when all she was going to buy was a $3 gizmo.
In short, the wise words of Pierre-Yves McSween come to mind. Mom, do you really need it?
Conversely, in my case, every expense is analyzed and calculated. And I always make sure I pay the right price on everything.
I’m not saying to jump on every bargain. Because, of course, the best deal is the one that costs nothing. But for some unavoidable expenses, it is good to bargain shop.
I have to come back to the subject of groceries, yes. What can I say, it’s a big chunk of the budget. So it’s absolutely important to pay the right price.
Why would I buy my pound of ground meat for $6 when I know it’s $3 on sale elsewhere? Some may say that they don’t like to do multiple stores for a lack of time or they don’t want to go the distance. Well, if those reasons applied, I’d simply go without ground meat that week. I would buy something else on sale.
Of course, this also applies to just about anything else. Anything you want to buy deserves to be carefully shopped and compared. Just taking the time to shop around will calm down your impulsivity. So, why buy something at full price in one place, if it is at a better price or at a discount elsewhere?
Making Your Own Coffee
I may sound like a bit of a hypocrite, since my monthly reviews show some recurring visits to Starbucks. However, you should know that out of my 14 coffees per week (yes, two a day), only one comes from Starbucks.
Because yes, it doesn’t make sense to pay $3 for a coffee every time.
Not when I know that my cup of homemade coffee costs me about 6 cents. Starbucks coffee may be delicious, but it’s certainly not 50 times more delicious than my coffee at home. So, yes, I do indulge, but only occasionally.
Want another example of outrageous prices? The other day I had the bright idea to try an iced coffee at Starbucks. So I order the same recipe as usual, but with ice. It was 1$ more expensive. For what? Ice (which takes up space), and therefore, I end up with less coffee!
Let me tell you, I’ll make some at home in the future. Otherwise, the one at McDonald’s is $1 all summer. 😉
Cooking Your Own Meals
With restaurants reopening, maybe you feel like rushing in for a good meal.
Well, I don’t.
The other day I made a delicious tuna tartare for me and my partner. At Metro, the tuna (tartar grade, I might add) was on sale for $8.99/lb. With homemade cheese chips, a small spinach salad and cucumber slices, I estimate that the meal came to a maximum of $6 per person. Since it was all unprocessed food, it was literally tax free!
Now, how much would it have cost me at the restaurant? A plate of tartar is easily $25 on the menu. Probably more. I don’t know, I rarely go to restaurants. Then, of course, there are the taxes and tip, so it’s really $33 minimum out of pocket.
And that’s with a glass of water. That’s without even adding a glass of wine! While a glass of a nice cheap bottle at the SAQ is $2-3, at the restaurant we’re talking more than $10. And once again, you have to add taxes and the tip.
In short, between the two, I know which one I prefer. Especially since my tartar was really delicious! I wouldn’t have had the feeling of satisfaction of having cooked a good meal nor the compliments from my partner if we had gone to a restaurant. 🙂
Go for Second-Hand Goods
Whether it’s items donated by a loved one, purchases made at a thrift store or from a third party via Facebook Marketplace, Kijiji, etc., this is a great way to pay the right price on a variety of things.
By the way, we’ve just passed the moving season in Quebec. You may have noticed the multitude of things that people are trying to get rid of at a loss? Or, at any time of the year, people who get rid of clothes in good condition, simply because they are “out of fashion,” or because they no longer fit? To get rid of them, they must necessarily sell at a fraction of the price they paid.
As an example, let’s say I need a nice jacket for work for the occasional important video conference. Instead of paying $100 for one new in a store, I can find one for $20 on Marketplace. It can be a bit difficult to find something that fits perfectly. However, for a piece of clothing that you’re going to wear occasionally, it’s worth the cost.
If you take advantage of these bargains, you can dress or furnish your home for very little money, while reducing your ecological footprint. By letting others absorb most of the real price tag, you consume less and keep more money in your pocket!
Time Is Money
Since most of us work for an hourly wage, it’s wise to remember that time is literally money. So if you had no choice but to spend, I hope you paid the right price.
Indeed, let’s say you bought a gadget of some sort for $500, not knowing that it was discounted to $400 elsewhere, or even going for $250 on Kijiji. Do you have any idea how much that extra $100 or $250 spent really means?
If you want a little reality check, take that amount and divide it by your net hourly wage. You’ll see how many hours you had to work just to pay that amount, only to throw it out the window. You didn’t just waste your money, you wasted your time. And time is precious!
Or, as my partner likes to calculate, see how many units of your favourite ETF that is. Two hundred and fifty dollars is 9 XEQT that won’t appreciate in your portfolio. 😉
Of course, it’s even worse to do the math if it was mindless spending on something you didn’t really need.
After doing the exercise, maybe you’ll try to avoid paying more than necessary.
So, I may look cheap to some, but I prefer to make wise choices that will positively impact my long-term financial health. If I spend money to please others, who will really benefit from it? Certainly not my wallet!
As Nicolas Bérubé said in his book Les millionnaires ne sont pas ceux que vous croyez (loose translation: Millionaires are not who you think they are):
Every purchase hurts our ability to grow rich, to build our financial independence and our ability to use our time as we see fit – now and in 10, 30 or 50 years.
Cheap, frugal, thrifty, call it what you will. As my aunt says so well: I like to pay the right price. Sometimes the price is $0, if I just don’t feel I need it.
And yourself, do you make certain financial choices that have your loved ones a bit confused? By watching their mindless spending, do you feel like teaching them some frugal basics sometimes?
Don’t hesitate to tell me about it.
See you next time!