Curing The Cheap Disease For A Better Life

Counting Pennies As A Cheapskate4pm – 5:15pm was our doubles court time. At 4:05pm, our 4th player group texted us to say he was waiting for parking at the club parking lot. He finally showed at 4:45pm.

Because he didn't want to pay $3.25/hour for metered street parking, our 4th made the three of us wait. Further, when a couple of us had to leave at 5:15pm, he had the audacity to question why we couldn't play longer, even though he already knew we had other commitments. It didn't matter because another group of players were waiting to kick us off already during primetime.

What's really messed up is that Mr. Late drives a $40,000 5-series BMW, a car worth 2X mine. Thankfully, I had already worked out for two hours that morning, otherwise, I would have been pissed for his total disrespect of our time. Being cheap is fine, but not at the expense of others. Don't be selfish.


I know I'm definitely frugal, but I don't think I'm cheap. Being cheap is a shame that takes the joy out of life. After all, Financial Samurai is a website that secretly tries to maximize happiness through the use of money. I am all for spending money on things we care about the most, and minimize our expenses on things we care about least.

Being cheap is a symptom of poor financial management rather than some genetic predisposition. So how does one who is seeking early financial independence not be cheap, yet at the same time also save and invest aggressively? Here are some things I've thought about that can help cure the cheap ass disease.

1) Know your finances inside out. Part of the reason why people are cheap is because they don't know exactly how much they are earning and spending. For a couple years, I felt that I had to save more money because I thought I was “only” saving 50% of my after-tax income. After sitting down and actually calculating my earnings and spending, I learned I was actually saving 75% – 85% of my after tax income. When I discovered this, I started to spend more freely without guilt. I know exactly what I can spend and invest each month to achieve my target 50% savings percentage because I track my finances like a hawk.

2) Take baby steps towards spending more. A great way to spend more is to gradually move up the quality/price curve. For example, you might first start shopping at Ross Dress For Less, then move over to Old Navy, then Gap, then Banana Republic, and finally Armani. Or, you might start with driving a beater, then a seven year old Honda Civic, then a sexy new Honda Fit like the one I have now. It took me 10 years of driving a 10 year old SUV with irreparable problems for me to finally bite the bullet and buy a new $20,000 car. But now, I love it, and am considering a mid-life crisis car in two years. During your baby steps, you may discover that you are perfectly happy with the quality of Banana Republic and a Honda Fit and be content to not take additional steps.

3) Take notes on how you feel spending XYZ amounts every month. While taking baby steps toward spending more, record how you feel about spending certain amounts. Assign happiness and guilt ratings from 1-10 for each amount. The fear of running out of money often irrationally prevents you from enjoying the happiness experienced by spending more. But if your happiness score trumps your guilt score, and you know your finances inside and out, you should be able to gradually overcome your irrational thinking.

For example, I used to feel very guilty spending money on the latest laptop or iPhone, even though they are necessary tools for running my business. I'd always just inherit hand-me-down laptops with not enough memory. Then one day, I said screw it, and bought the latest Macbook Pro 13″ for around $1,500. The joy of no longer seeing the dreaded pinwheel more than outweighed any guilt I had for buying a computer more powerful than I really needed. From then on, I'm happy to spend whatever it takes to get the fastest computer possible.

4) Recognize the value of more expensive items. I'm not talking about the value of Hermes handbags that cost $5,000, but only cost $100 to make. A no-name hand bag can carry your goods just as easily as a Hermes handbag. I'm talking about the incremental value of paying for nicer things. Nicer clothes will make you look better and feel better. A nicer car might be much safer due to more airbags, a stronger frame, and anti-skid technology. And a luxury master bathroom with dual rain showers, a large jacuzzi tub, a custom closet with his and her laundry containers, and a private toilet room could make a boring marriage fun again!

5) Figure out what you value most. Everybody values things a little differently. The older I get, the more I value time. As a result, I'm willing to pay for parking instead of waiting for a free spot. As an internet small business owner, I absolutely will pay for the fastest internet possible. When commuting, I'd happily pay a little more for UberX instead of UberPool to get to my destination faster. Time is one thing none of us can get back. Other areas I'm willing to pay up for are housing, food, shoes, sports equipment, education, and travel. How about you?

6) Estimate how much left you will have when you die. Estimating when you'll die is a great way to force yourself to spend more freely. The only easy way to get an idea how much you'll have when you die is by running your finances through a retirement planner. Going through an Excel spreadsheet is way too cumbersome to forecast manual cash flow in so many years. I absolutely plan to spend or give away 100% of any money beyond $5.45 million as an individual, since that is when the death tax limit kicks in for 2016. I'll encourage my spouse to spend or giveaway all money over $5.45 million as well. It's up to you to calculate how much you think you'll have, and how much you're comfortable leaving behind so you don't create spoiled, entitled brats!


It's fine to be cheap if you're focused on achieving financial freedom or early retirement. Just make sure your cheapness isn't due to the ignorance of not knowing how much you can really spend while still being able to achieve your goals. When around others, be generous.

Don't let personal finance blogs like mine or people who have a lot more money make you feel the need to go to the extremes of saving. Your financial life is your own. Just come up with a game plan to get there!

Related: How Much Should My Net Worth Or Savings Be By Income?

Readers, have you ever had a friend or acquaintance who is so cheap s/he negatively affected others around them? If so, please share with us an example. How are you making sure you don't suffer from the cheap virus?

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57 thoughts on “Curing The Cheap Disease For A Better Life”

  1. Sam, please don’t tell me you have that fancy bathroom. Because if you do you just told the world (which includes your wife) that your marriage was boring before you got the bathroom. So hoping that was hypothetical and that she isn’t as scary as my wife.

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