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6 Spending Secrets from a Major Cheapskate

From time to time, I’ve been accused by my friends of being…well, let’s say “frugal” (you can guess what they really call me by the title). As you may have noticed in my perceived value blog post, I don’t like to spend money unnecessarily. I’m sure everyone has heard of the obvious ways to cut spending: buy used, quit your addictions, only buy what you need, etc… But over the years, I’ve come across some not-so-obvious ways of saving that have really helped me earn my nickname!

1. ASSIGN VALUE TO YOUR TIME – This is, by far, my biggest trick. I give my time a finite value. I figure out how much (after taxes) I make per hour and think about all the work I do in that hour. Then, before I buy something, I think about how many hours of work it’s costing me to pay for it and whether it’s worth it or not. More times than not, it isn’t. I’ve actually said things to myself like: “that shirt costs at least 3 spreadsheets!” (Not out loud – I’m not crazy). I’ve picked up so many things at a store just to put them down a couple minutes later after I’ve had time to think about it.

2. BUY IN BULK…WHEN IT’S WORTH IT – If you use a ton of ketchup, then buy the ketchup that is cheapest PER OUNCE (it’s on the tag at the grocery store). If you don’t use much ketchup, then buy the CHEAPEST bottle overall. Doing the opposite of either costs you money in the long run.

3. BUY QUALITY…WHEN IT’S WORTH IT – I used to do construction, so I have a lot of tools. The nice ones are the tools I use all the time, and the cheap ones are the tools that I rarely need. I’m not going to buy a top-of-the-line table saw when I’ll only use it twice a year. I don’t care how spectacular it is, I won’t get my money’s worth out of it!

4. MAKE SACRIFICES – Want to buy something? Sell something. I think I’ve had around 34 guitars in my life, but I only have 8 right now. I’ve almost never bought one without selling one. It’s a simple concept, but it really pays off (eBay and Craigslist are your friends). Plus, I’m pretty sure I’ve made money on guitars while I was at it.

5. USE CAUTION WITH CREDIT CARDS – For the love of God, be careful here! I make my credit cards work for me, and I’m sure the card companies hate me because of it. I found the best rewards card I could, put every bill and expense on it I could while still being able to pay it off every month, and I end up making about $400 a year in rewards.  **PLEASE NOTE** This doesn’t work if you carry a balance. Please don’t try it and then blame me if it doesn’t work well for you!

6. BEWARE OF EXTENDED WARRANTIES – Paying extra for extended warranties is almost never worth it (unless it’s just for peace of mind, which is priced subjectively). If you don’t buy the plan, then there’s at least the OPTION of not paying for possible repairs. Otherwise, you’re paying for repairs that may or not ever happen. And think about it: not everything you buy will break, so you’ll more than likely come out ahead in the end if you just save the costs up front.

So there you have it. I’ve let go of all my frugal secrets. Now you can be a cheap bastard or a cheapskate, too!

How do you cut costs or reduce spending (besides ordering your promo items from Quality Logo Products)?



Jeff Porretto

Recently dethroned as the shortest member of the blogsquad, Jeff considers himself to be an artist in all facets of life. Be it playing or building guitars, writing blogs with scathing dry wit, or simply finding new ways to be productive, creativity is a central focus of his day. More than anything, Jeff likes to spend time at home with his wife and 2 dogs quietly enjoying their time together. As with many other members of the blog squad, Jeff is fascinated by the latest and greatest technologies. He is also a self-professed Air Jordan addict and is willing to talk about shoes at any time. You can connect with Jeff on Google+.

Comments

  1. LK

    I have a hate/hate relationship with credit cards. Once I finally pay off my CCs (since I’m still paying for my groceries I bought in college!) I would love to take the advice of tip # 5 and buy to earn rewards but pay it off everytime. With how much gas I buy I could probably be earning trips to Hawaii!!

    Tip #1 cracks me up. Its a wise thought, but I couldnt ever follow it. As I’ve mentioned before, I’m somewhat of a shopaholic. :/

    • Cybernetic SAM

      I am also paying off groceries from like 3 years ago. Man, that is sad to think about.

  2. Joseph Giorgi

    You make some excellent points in this post. I honestly wish that I could be more of a cheapskate, as it would no doubt benefit me in the long-run. I tend to have the opposite problem: I spend more than I should on items and conveniences that I could just as easily do without. I’m pretty impulsive, and I need to start heeding this kind of advice.

    It’s been a while since I’ve thought about my purchases in terms of how many hours of work they ultimately represent (and I love your spreadsheet metaphor, by the way). I really need to start doing that again; it would probably save me a ton.

    For example, I’ve got a purchase coming up that’s going to cost me somewhere between 150 and 200 product descriptions, and when I think about it in those terms, it almost doesn’t seem worth it. I’m still going to buy it though. :D

    But after that, I’ll be more “frugal”… I swear.

    • JPorretto

      Well you gotta treat yourself sometimes. I know the purchase you refer to, and I know YOU couldn’t live without it =)

  3. Jill Tooley

    Wow, Jeff! You really ARE the master of frugality! :)

    In an effort to reduce my spending, I’m going to try tips #1 and #4 first. I may think twice about buying the fancy new iPod I want if I assign monetary value to my work time…and #4 would work perfectly for me since I have so much “junk” that I’d love to get rid of! And who knows, maybe I can make some extra cash while I’m at it.

    Do you have any cheapskate tips about paying off debts? Sometimes I think my student loans are trying to kill me… ;)

    Excellent work!

    • JPorretto

      Sorry =( No fancy mind tricks there. Budget and Save. But becoming a true cheapskate will help you do those!

    • LK

      agreed Jill… student loans are putting a BIG damper on my life.

  4. Cybernetic SAM

    I heard a good idea for frivolous credit card users: Take the card and put it in a jar of water in the freezer. So when you feel you need to use it, by the time the ice thaws, you may have thought a couple times over if it is really worth it.

    I feel that most of the time I am very tight with my money (but when I do get to spending to me it seems like a lot) but to most it’s nothing. I even have buyer’s remorse when I buy necessary items like groceries. It makes me sad that rewarding myself every once in a while makes me wake up in the morning feeling like those people you see on New Year’s Day on the streets doing the walk of shame. I think this feeling of absolute fear (and yet the need to buy things) stems from growing up in the economy which did a fantastic belly flop and has rippled and scarred present day adults. We feel the need to buy things when we have money, because it may not happen again for a long time. Yet the fear ensues as soon as the transaction is complete b/c we know we shouldn’t. Then the anger overwhelms b/c we feel like we deserve it to some degree and why not? It is as though with something as simple as shopping we go through the 5 stages of grieving. I guess that’s why I get so pissed when I see people blowing money on $600 purses or $120 jeans when to me it is infuriating, when I buy a $10 t-shirt and think to myself….”was it worth it?”

    • JPorretto

      I’m trying to get over the buyer’s remorse. It’s not taking. And God Forbid I see what I bought for less after I can no longer do anything about it! I can’t let that go for weeks.

      P.S. You need to write for the blog more. Your comments are like mini-blogs themselves =)

  5. Juliette

    I actually work with your #1 in a different way. I knit Jayne Hats in my spare time and often think of things in terms of how many Jayne hats I have to make in order to buy something. (When I had to get a new tire after mine shredded on the freeway I really did think “That’s 3 Jayne Hats…”)

    And I’m all about 2 and 3. :)

    Though I’m with Jill on the student loan thing. If only someone had a great suggestion for dealing with student loans….Ah well.

    • Jill Tooley

      Are you still selling the Jayne hats to ThinkGeek? My stuffed bird from Dr. Seuss’ “Oh Say Can You Say” is currently wearing the one you knitted for me! :)

      • Juliette

        I finished the order for their staff but they’re still putting my name out there when people ask where they got them. :)

        Aw! I demand pictures!

    • JPorretto

      Well I’m glad other people say crazy things to themselves, too. Whatever works!

  6. Bret Bonnet

    Jeff – I’m curious; do you get a tax credit for being so short? :)

    This is a great post and I agree with EVERY-ONE’S points and sympathize with all your concerns.

    My advice will never appear in magazine or text book on good money management; the one tip or piece of advise I have is… It’s just money, you can’t take it with you when you die, and you only live once… Grab life by the horns and live it to it’s fullest.

    Now, I know what you’re thinking, but this CAN be achieved while being fiscally responsible, just learn to not overindulge or over think a purchase; if it makes you happy, and it’s not going to put you in Chapter 11, go for it!

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