Frugality: A Smart Money Move

We often equate frugality with penny-pinching behaviour. But it isn't. It is about being smart with money, and spending it on things that give value and satisfaction

- By LARISSA FERNAND

What comes to your mind when I say “frugality”? It would possibly be any one of these—miser, cheap, sacrifice, bargain hunter, pinchpenny, scrooge, tightwad, cheapskate, stingy.

Frugality gets a bad rap, which, I must say, is very misplaced. Frugality is not about getting the cheapest deal; it is about maximising the total value. And I hope to convince you about it in this column.

#1: Buying Cheap Can Be Very Expensive In The Long Run

Let me start by paraphrasing an incident in the novel Men At Arms.

The city watch commander, Captain Samuel Vimes, is set to marry an incredibly rich woman, Lady Sybil Ramkin. By contrast, Vimes is not rich. He earns $38 per month and allowances. When he needed a really good pair of leather boots, he narrowed down on one that cost $50. Since it was above his budget, all he could do was buy an “affordable pair of boots” for around $10. It worked for a while but then began to fall apart. In fact, as the soles wore off, Vimes could tell where he was on a foggy night by the feel of the cobbles on his feet. When it developed holes, he had to buy a new pair to keep his feet dry.

The $50 pair of boots kept its owner's feet dry for a decade. The $10 pair of boots had to be constantly replaced. Consequently, the poor man who could only afford cheap boots would have spent almost $100 on boots over the same decade as he kept replacing the inferior quality boots. Can you spot tragic irony? By buying the lowest-priced options, you could end up spending significantly more.

Socialist Frank Owen in the novel, The Ragged-Trousered Philanthropists, sums it up well. Everybody knows that good quality clothes, boots or furniture are really the cheapest in the end, although they cost more money at first. But the working classes can seldom or never afford to buy good things; they have to buy cheap rubbish; the lowest-priced articles. In the end, this is the most expensive.