There has been a lot of buzz in the news lately about my story of paying off my mortgage by age 30. I’m not going to lie – paying off my mortgage in only three years required a lot of financial and personal sacrifice. I lived a super-frugal lifestyle – I rode my bike to work, packed my lunch and rarely ate out.
While there are benefits to being frugal, there’s also being cheap - and contrary to popular belief, there’s a difference between the two. Have you ever heard of the saying, “penny wise, pound foolish”? Being cheap is about choosing the least expensive option (ignoring quality), while being frugal means choosing the option that offers the best value in the long-run. Being cheap can actually cost you more over the long-term; an ongoing survey by Capital One and Canada Credit Debt Solutions brings to light Canadians' stories of cheap regret - one woman said she has replaced her kitchen chairs several times (she was especially embarrassed when a chair broke when one of her guests sat down).
So, what items should you open your wallet for? Here are five items that are worth spending more for.
One of the most costly aspects of homeownership is renovations. I know this first-hand – a couple of years ago I spent $25,000 in home renovations. In this blog post I wrote about how the lowest quote isn’t always the best. When you’re getting major work done, always get a few quotes in writing and do your homework before choosing a contractor. If a quote comes in a lot lower than the others, it’s a red flag that the contractor may be cutting corners, which often ends up costing you more money in the long run.
The easiest way to insult loved ones and lose friends is to show up empty-handed at a birthday party or wedding. I’m not saying you should go into debt to buy gifts. To avoid being the least popular person at the party, you can set a spending limit with guests beforehand. The best gift doesn’t always have the highest price tag – often it’s the thought that counts. A self-portrait in pastels can mean a lot more than a retailer gift card.
The saying “you get what you pay for” is especially true with clothing. And investing in your appearance can have a tangible payoff - it can help boost your self-confidence, and even help you get promoted at work. You don't have to go out and buy an Armani suit, but showing you care about your appearance and are willing to make an effort is a sign of respect.
If you buy the cheapest set of earbuds from the dollar store and they break a week later, are you really saving money? Electronics is something you don’t want to be cheap on. Do your homework – read customer reviews to help decide on the best product. Think twice before buying refurbished products (they’ve already broken once, after all).
Although you may save a lot of money by eating Kraft Diner at every meal, it’s not the healthiest long-term meal choice. Your health is your greatest asset – by eating poorly, it can lead to health complications later on in life and end up costing you a bundle. And, you don't have to blow your budget in order to eat well - with a little forward planning, you can have the best of both worlds. Check out how I spend only $100 a month on my grocery budget.
Investing in fitness is also crucial to your overall well-being. Whether you prefer to join a gym (ensuring you shop around and read the fine print on that contract), take up a sport, or pursue at-home or outdoor activities such as running, it's money well spent.
What items do you take a frugal approach to?