I don't think that being frugal has ever been about going cheap.
Frugality is not about consuming but investing in your life: that often contradicts with cheap.
Frugality is about not buying things you don't need but buying things you can't live without. A frugal person will typically invest in quality because he knows he'll be using the item for years and doesn't want to replace it every few.
I wouldn't consider myself extremely frugal but my favorite shoes I'm wearing today I bought in the year 2000. They feel great, they have never had to been repaired, they resist water enough, the leather is in good condition and actually they didn't cost much (guesstimate in today's currency: 100-150€). But I have this mindset that I don't need new shoes just for the sake of new shoes. That's frugality. I will wear mine for another ten years if only they'll hold together and still look tidy enough to walk into the public. (They look used of course, but still tidy.) If they don't, I'll have to buy a replacement pair.
Frugality is also sometimes buying the cheapest thing. Buying a cheap electric drill is frugal if you only drill a few times a year, which makes the drill last for decades. Buying the best that money can buy would be frugal if you're a carpenter or do renovations every week and need a professional grade durability; however, if you're not doing that you're not frugal but rather just going on the hifi tangent and in reality you want to buy the expensive model because of your ego only.
Frugality also brings focus to—I was going to say consumption but I'll say personal investment instead. It makes sense to buy quality items for what you love: if you love riding a bike then investing in a quality bike is frugal because it saves you and the environment from unneeded consumption and hair-pulling. But you can't love everything either. You can't have the top of the line computer, screen, home theater, coffee grinder, washing machine, mattress, toilet seat, motorcycle, car, bike, camera, video camera, clothes, shoes, accessories and consider yourself frugal. You can have one or two because you simply can't be spending all of your time only grinding coffee, coding, washing laundry, riding a motorbike, and shooting photos.
And yes, being frugal inevitably does make me look like a loser in the eyes of some people. But then what?
Other people's opinions about me are none of my business anyway.
Indeed, and I think that's what the author was saying too.
One example: Craftsman Hand Tools. They have a lifetime guarantee, so provided you don't lose them, you're done buying screwdrivers and wrenches for life.
True story. I walked into Sears with a broken socket wrench.
Sears guy: "Wow. What happened to that?"
Me: "Well, I had a bolt that really didn't want to come loose, so I had a six foot cheater bar and I was bouncing my whole weight on it when suddenly it exploded."
Sears guy: "Yeah, that would do it. Let me see what I can do..."
[check in the back]
"Well, we don't have that model in stock, so here's a new one from our Pro line. It's a bit more expensive, but it's probably a bit stronger too. Good luck with that bolt."
I've had that same conversation on 3 different occasions, each with ludicrously mis-used tools broken entirely through my foolishness. All replaced for free with a smile.
Yes, but when the original author said it he was rude and condescending. Rude because there is simply no polite way to call someone a loser. Condescending because he assumed that ignorance was the only reason someone would buy something of low quality and that everyone reading the article would have money to buy high quality things.
Almost everyone in the U.S. has access to an internet connection. If not in their home, in their local library. The median household income in the U.S. is around $50k. Many people earn much less than that, and they still manage to get access to the internet. If you are used to living with above-median income, you should be humble when saying what people earning much less than median can and can't afford.
And that's just considering the U.S., which is easily in the top 10 of median income.
By contrast, yason did not assume anything about the readers ability to afford things and he or she did not put anyone down, except maybe people who buy the best of absolutely everything and still claim to be frugal, and even then, yason only addressed their behavior, not them as people.
There is a right and a wrong way to say things. The original author went with the wrong way.
I've actually found ancient Craftsman tools in the yard, left over from the workers who built my house decades before, and Sears happily replaced them.
Of course, if Sears tanks in a few years, then those tools aren't such a good deal anymore.
Along those lines, one of the purchases I am most happy with is notebook insurance -- the kind that covers me being a bonehead.
My notebook computer is my main tool, without it I couldn't work. So when something happens, it's critical to be able to pick up the phone, dial a toll-free number, and have a new part or computer arriving very quickly by an overnight carrier. Saved my bacon many times.
I've had that same conversation on 3 different occasions,
each with ludicrously mis-used tools broken entirely
through my foolishness. All replaced for free with a
smile.
Uh, sure. You're right. Sears are thin on the ground over here.
In case I wasn't clear, all the abovementioned conversations happened at Sears department store, the sole distributor of Craftsman hand tools. They have an explicit policy of replacing any broken tool, regardless of how you broke it.
So if you rock up with the snapped-off handle of one of those tiny little flathead screwdrivers (complete with a little clip so that you can keep it in your shirt pocket), and a story about how you were trying to pry off a rusted-on cylinder head using it and a large hammer, they'll replace it.
(as I have personally verified)
And yeah, you're right about the European version of customer service (at least the English variant). Since moving here, I've never once come across a merchant who was familiar with the concept of "the customer is always right". Rather, "It's my shop, so by definition I'm right. And why are there so many customers in here, anyway? I think I'll start closing at 5:30 so I don't have to deal with them."
Spending a month in France made me realize just how great customer service is in North America. (Luckily France has other features.)
The one HUGE exception was the French national rail service. They must get great compensation, or have good hiring policies, because everyone I dealt with was spontaneously helpful and didn't mind spending extra time with me, even to the point of extending their work hours.
Yep, UK customer service is pretty mixed. At it's best it's pretty good but at it's worst it's absolutely shocking. Sadly good customer service is still enough of a rarity that it's genuinely noteworthy when you do come across it.
I think the disconnect here is your use of the term frugal. In the US (at least the south) every time I've ever heard anyone say they were frugal they meant they were cheap. They would buy the cheapest possible thing and use it well past the point it was presentable. I've even heard such people claim the cheaper thing must be better quality because it's cheaper. Sadly, I'm not even exaggerating.
I'm from the NE, and the word "frugal" does not mean the same thing here as it does in the South. As someone above said about New England, frugal is an art form here. Frugal is spending more on Calphalon cookware because you don't waste a ton of money eating out 3x a week, and want cooking gear that lasts a lifetime so you don't have to spend more money re-buying cheap stuff later.
I can concur, being from New England myself frugal is looked at as a desirable trait. In fact, I'd say its synonymous with the term "thrifty" which is another positive association for us.
Sure, I've heard people use it this way down South, it's part of the politeness culture there, where using "cheap" would be perceived as insulting or pejorative.
It's an intentional rhetorical device. For the opposite take on frugality, you can read In Cheap We Trust: The Story of a Misunderstood American Virtue.
There are people who take consumption too far, and there are people who take frugality to the point of miserliness. I don't think it's fair to peg the definition of frugality to either of these extremes.
Furthermore, I take issue with the author's (or anyone's) attempts to stake out objective ground on what does or does not constitute "the right place" to spend money. Everyone lives differently. "The right places" are subjective. If I derive a ton of personal utility and happiness from splurging on something someone else considers worthless, while saving on something someone else considers vital, then that's my prerogative. So long as my overall strategy is sound, and I'm living within or under my means, I'm fine with my choices.
Agreed. Another good way of looking at it is that managing your spending should be like managing any other finite resource, like time.
No one really thinks it makes sense to save your time by not spending time on anything at all. You want to be frugal with your time -- you save it in order to splurge on the things that matter and will give you the most benefit/productivity. I think it's the same with money -- cheapness is a mentally lazy way to save money, frugality is a smarter way.
As a side note, I've never understood the obsession with making food purchases your main source of money-saving. The idea of "cheap calories" seems so misguided when you take into account that, down the line, those diabetes and heart disease treatments will be anything but cheap. Not to mention what you lose in productivity with the mental and physical sluggishness that comes from eating crappy, fake food.
I'm all for ramen-profitable, but I'll pass on the ramen. If only "3 year old shoes and grass-fed steak profitable" had a better ring to it.
On one hand I kind of agree with this, there certainly is something to be said for buying nice stuff now and then, especially when it is stuff you love doing.
For play, I use a ratio I call the Fun Factor. Essentially, that's the $/hr of fun I get out of something. So if you go see a movie and it is $10, and it is the rare money that is actually fun to watch, then the fun factor is roughly $5.
So then you apply it to other things. Sure, $2,000 is a lot to spend a mountain bike, but divided out by the number of hours I've had on it, I'm way below $5 these days, so I consider it a fair deal.
A smartphone and laptop I love is always worth it in fun factor dollars.
That said, I do take issue on the 'lasting forever' bit, because wow, stuff just isn't made to last forever anymore and nor would you want to. I think it is a clever trick that we play on ourselves, oh, "This will be the last [blank] I ever have to buy", but how often is that really the case?
I can think of a few things I have that qualify, but they are few. I bought a $100 chef knife about a decade ago, still use it daily, still love it. I don't see my Ortlieb messenger bag ever breaking down, so maybe that's another. A few hand tools, but most hand tools last forever regardless of quality.
What are yours, what have you bought that you think you might keep forever?
I use the Fun Factor rationalization too, but I find it can be problematic in many cases. Mainly with bigger purchases. When you amortize that $2000 bike out per use, the difference between it and the $1500 bike can seem rather insignificant. "$1.5 v. $2 per use? Hell, I might as well get the better one." But, it's still $500. That's real money that could be used to earn more money somewhere else. Ratchet that up if we're talking about cars or boats or houses. So, I like the Fun Factor rationalization, but it can be dangerous.
As to the "lasting forever bit", I don't think it's necessary that things last literally forever; the point is more that making very long term purchases is a worthy goal. 15-20 years maybe. That said, I do try to buy things that literally will last me forever, though the list isn't very long, yet:
I try to buy tools that will last forever, or close to. With things like digital cameras (or any consumer electronics), it's silly to expect anything to last more than 10 years, on the very long end.
But, with power tools, I buy things expecting them to last forever (with routine maintenance and not heavy duty use).
I more or less expect my nice knives to last forever.
I expect most of my furniture to last forever.
I expect my weight set to last forever.
> But, it's still $500. That's real money that could be used to earn more money somewhere else.
On the other hand the 2000$ bike is perhaps so much nicer that you ride it more often and have more fun doing it. It might last longer as well lowering the fun factor even more.
> With things like digital cameras (or any consumer electronics), it's silly to expect anything to last more than 10 years, on the very long end.
I think that's an unreasonable assumption. I had a Kyocera camera (designed in 1999) but even though I would call myself frugal (some people would call me cheap) and I didn't have much money I basically had to replace it around 2006 because of technology progress and lack of batteries, replacement parts.
Only if it is taken care of. I have seen anvils with broken horns, chipped edges, and deep rust pits that were no more than a hundred years old. I even saw one anvil (don't know its age) that had been broken almost in half AND was seriously rust damaged.
My 2001 Z06 Corvette that I bought new in 2000. Hand tools only last forever if you don't use them; I beat the heck out of mine. I buy craftsman tools at sears, at least the basic hand tools. They replace them free when they break/wear out, no questions asked. For more complex tools (torque wrenches and the like), I spend the money and buy Snap-On (or equivalent).
Other things I've spent money on (that I'm happy with): heated slate floors for my bathroom - nothing like 85deg toasty floors when you get up in the morning; Benchmade knives; our latex foam mattress. Probably more things I can't think of at the moment.
Other things I've spent money on (that I'm happy with): heated slate floors for my bathroom - nothing like 85deg toasty floors when you get up in the morning; Benchmade knives; our latex foam mattress. Probably more things I can't think of at the moment.
If a person does any amount of cooking a nice set of knives is one of the best things a person can spend money on. They make preparing meals easier, faster and safer.
One thing that I have spent good money on is sheets. I spend 6-8 hours/day in bed sleeping so why not be as comfortable as possible?
I think frugal people also recognize the importance of good enough. One of the easiest places to see this in action is when buying wine. Going from the $5 bottle of wine to the $10-$20 bottle of wine often yields huge quality increases. When you start going from the $20 to $50 and $100+ the changes are often barely noticeable if at all. Most things that we buy have a similar scale and the key is finding that spot that is good enough for the best price.
In the kitchen alone: A good set of stainless pans (even the best nonstick will need replaceed eventually), A couple cast-iron skillets, enameled cast-iron (le cruset). Good knives, like yourself. Good steak knives as well.
In the garage: Any cars you're committed to taking care of. For me, my passion, is Mercedes. I see somebody slse mention Vette's. But there's all the tools I have. Spend a little more and they'll truly last.
I have a small knife for in the kitchen that costs €8.95. This is relatively expensive for that kind of knife, you can get a similar one for €0.75. I have used it nearly every day for 3 years (that's about 2 cents per day) and people are still amazed how sharp it is when they cook at my place. The problem with the very cheap knives is that they bend and they get blunt quickly.
This is the best knife I've owned, better than much more expensive chef's knives. Sometimes the best things are not the cheapest nor the most expensive.
As a rule I've found things that look cheap but are expensive for how they look are the best. You can buy good looking expensive "design" scissors that are likely to be bad in every other department, or you can buy relatively expensive cheap looking scissors that stay sharp forever.
The one thing that I'm still looking for are quality bicycle lights on batteries.
I agree. Personally, I'm more sick of the culture of bargaining and haggling over increasingly small, pedestrian items that has gained a lot of fashion in the recession, even among people for whom it is not a financial imperative. It was a movement with a lot of momentum even before the recession, though, so there must be some other more enduring dynamics at play, too, not just cyclical stuff.
There's a social cost to making an ass of yourself arguing +/- $0.30 on a loaf of bread, so I don't do it. And--I jest not--I get chided by "frugal" people for not spending a half hour going through my pile of 50+ coupon clippings in front of the register in the express lane, ten people waiting in line behind me be damned.
Nobody in the startup scene here likes a customer that rides them about price no matter the discount, and appears to be fixated solely on price and not on value. Nobody likes the message that sends about the customer's priorities, their character, or the value they attach to the product or service. There is a moral and a psychological valence to the whole thing. It's off-putting, because it says that you don't realise that sometimes there is more to life than cold, rational economic calculus. So why do it to others?
Negotiating big-ticket items like salaries, houses and cars has always been okay in this culture, and there are considerable practical reasons to do it; thousands of dollars are on the line, and the people on the other end of the table have a pricing structure and a sales methodology designed specifically to maximise gains on people reluctant or unable to negotiate. Obviously, I'm not saying you should allow yourself to be screwed for the sake of eschewing confrontation.
However, at the risk of sounding culturally chauvinist, as a Soviet immigrant, one of the things I have always liked about the US and for which I have taken pride in my adopted homeland is the fact that we're above petty bazaar culture here--haggling for the sake of haggling, or being obscenely preoccupied with price. Let's not lose that. Those of us from other cultures that have fewer compunctions about wheel-dealing in petty crap know where that leads, and it's a really detestable trait when not mandated by the necessities of poverty.
There's so much I find wrong here I don't know where to begin. I'm not the type to line-by-line somebodies post, but I'm tempted here.
Remember what Einstein called "The most powerful force in the universe" -- compound interest.
Small savings, done consistently, can grow into fortunes. Haggling; Couponing; Finding the best cash-back credit offers (and changing regularly to the currently-best credit card), the best APYs, the best coupon codes for websites;
Three general things I listed. In my own personal experience, you can very easily save $1000 a year from each of those 3, so in total, $3000 a year. (In fact, we save that from couponing alone.)
At a fair, 5% APY, when I retire in 40 years, that has grown to nearly $400,000. And if you can approach a historically-avergae 8%... wow: That's now $840,000.
There's no "social cost" to that. There's certainly pressure to conform: Pay the asking price, don't waste the time using coupons to full-effectiveness which often requires doing more than one transaction when you checkout, don't have the audacity to use the best deals possible from every bank you can find. But "cost"? No. There's no cost. Having strangers like you upset at us doesn't cost me a thing.
I've noticed that others with your POV dismiss the potential, they think they have it figured out. That coupons waste hours to save pennies and even then only on things you may not want or need anyway. That there's no way to "win" when you game the banking systems rewards. That haggling just doesn't work unless you're buying a car or a house.
But an additional $840k at retirement should illustrate to anybody that discounts the potential that they're just wrong on this one.
I think you've severely hyperbolised my comment. I didn't say you shouldn't be smart with your money, most especially when the cost of doing so in resources or obnoxiousness is small. I didn't say you should always pay sticker price, and never seek a good deal.
I merely encourage judiciousness about the wisdom and worth-it-ness of bargain-hunting in a given situation, and the recognition that doing it in every situation is not necessarily the best thing ipso facto.
Also, left unsaid is that I am coming from the perspective of someone who started a business from cash, with nothing, in a high-cost area. Having had to tenaciously brute force my way through every step of of the process without the benefit of 5% APY offers or anything of the sort has taught me important lessons in when it's worth it to pursue a discount.
To be fair, the example you used was haggling over a loaf of bread.
You thought I was kidding? I wish I were. I ran into a woman the day before yesterday who was at Publix (www.publix.com) here in Atlanta, asserting that the identical multigrain rye was 30c cheaper at Kroger down the street and she was taking her business elsewhere.
She didn't exactly look indigent, either; I'd take pity upon someone who managed to panhandle $2 but not $2.30. She was in a smart business suit.
It's not the first, second or third time I've seen something this ridiculous lately. I can only conclude it's a trend.
It's not Publix's policy to price-match across the board but often will. They'll also accept competitors coupons. They also accept B1G1 Manufacturer coupons when they themselves are running a B1G1 free sale, getting you both items free.
Joke all you want, she's the smart one here. You crowing about her here has no "social cost." And you say that your POV comes from running a business. So does mine. In my case, I contract myself out. I've grown into a very high hourly rate. I have an assistant to help with things so I can add more billable hours.
But what I've learned from running a business is to guard every damn cent that goes out the door. Not spending dollars to save dimes, but spending one dime to save 2.
Dude, 30 cents is a huge, HUGE deal. Dealbreaker even. And you don't have to be indigent to realize that. On wall street, IBs routinely send out managers who make seven figures to the exchanges to negotiate a 0.0001$ per share instead of 0.0002$. Entire trading platforms are swapped because some bean counter in the settlements desk thinks you can squeeze an extra penny out of the other platform. When your trading volume averages 100m$ per DAY, these point one-thousandth of a cent add up very quickly.
But your time has a cost. How much time do you spend cutting coupons, seeking discounts, finding, and then pursuing rebates, cash back offers, etc? Could you spend it doing something else? Would that time expenditure make more money than $3k/yr? The last calculations I saw, you were almost always better off picking up a part-time job or a hobby that makes stuff you can sell.
Not nearly as much time as you think. And $3000 is the low-end that I used to make a point.
In truth, last year, using those things I mentioned, I received slightly over $25,000 in extra perks and bonuses. That's not an exaggeration. The bulk of that is 2 free first class tickets to Europe. After that, about $3k in coupon savings, and $2k in cashback on my credit card, and a few hundred dollars in the "open this checking account and get a $100 bonus" type of rewards.
This is in addition to 50-60 hour weeks billing hourly and working from my home office.
Next year I probably won't be able to repeat that: it looks like I'll only be scoring _one_ free first class ticket to CDG. Even still, that's an estimated $16k this year
I have learned over the years that not spending 'enough' on tools is always a bad choice. Like mgarfias I buy Craftsman hand tools from Sears because they really do replace them no questions asked. I know a guy that would buy beat up, nicked and dingy craftsman screw drivers or socket wrenches at garage sales for a dollar and then go to Sears and get a replacement that they would put in their toolbox.
My experience of wearing out shoes was interesting. I used to buy 'cross trainers' or whatever the 'general use' canvas/plastic tennis shoe was at Big-5 when they went on sale every year. Every year I'd get a new pair of shoes for $10 to $15 and think "Wow look how much I'm saving over buying leather shoes for like $100 - $150." And then someone pointed out that they had leather shoes that they hadn't replaced in 10 years and it occurred to me that maybe I was looking at acquisition cost and not lifetime cost.
I did the math and bought my first pair of Clark's. They lasted 7 years and came out costing roughly $11/year for those 7 years. I replaced them with the same exact model that was on sale for $75. Not only did they look better than tennis shoes, they fit better, and 'wore' better. If I added the time spent shopping, the cost to get the car to/from the Big5 every year, the Clarks were 'cheaper' by being more expensive but of better durability.
So it was still being 'Frugal' but it was being a bit more intelligent about going about calculating the costs. I've long since learned to value my time more reasonably than 'free.'
I find this ode to consumerism quite distasteful. Sure, buy quality items if you can afford them, they'll often be worth the investment - but choosing to be frugal because of difficult financial circumstances is a good thing.
Most people don't need half of what they buy.
As for 'being fugal makes you a loser'; I think if the choice is being seen as a loser by the author of the article, and being broke and / or in debt - I'd definitely choose the former.
I'd possibly understand if this kind of rationalisation came from a government wanting its citizens to spend their way out of recession. Coming from a free thinking individual, it leaves a bad taste in my mouth.
I think you misunderstood the intent of the author. He doesn't advocate buying things that you don't need, he wants you to save that money so that you can buy quality where quality matters.
I agree, but for a different reason. I really broke from his thesis when he said, "It also reinforces the mindset that you’re cheap. “Stuff is cheap, so I don’t need a lot of money.” “I’m happy with mediocrity.”"
Really? "Buy more expensive stuff, so you'll require a higher salary"? This is ridiculous.
I think he's (doing a bad job of) saying that you should buy quality items to improve your day to day living and not fall into the trap of buying cheap items and then artificially limiting your earning power accordingly.
The OP is arguing mostly for _better_ stuff, not _more_ stuff. It doesn't argue for credit. It does argue for conservation of time and attention, rather than cash. I'd say reading comprehension is step one for free thought.
And you overlook the point that "better" == "more functional". Good shoes will walk much farther, in better comfort and health, than bad ones. If you choose bad shoes, everyone who understands this will see that you do not.
I tend to buy in two strategies. Either so cheap but functional I don't mind throwing it out later (as eco bad as that might be), or buying good quality wares. I believe that if you can afford good quality wares, that that will both make you happier and leave you with something of substantial resale value. So it may be a better financial strategy. Compare cheap Target cabinet with "Handmade Amish Furniture."
That said, the tone of the article is well, smug and obnoxious, and makes no effort to understand that many people cannot afford the quality goods the author can, or just have different values.
For example, I use to drive sports cars and convertibles, but now I drive cheap econo-boxes. Why? They tend to be more reliable, less expensive per mile to maintain, and I drive too damn much and drive them into the ground. (And I have a poor resales strategy -- I don't get rid of the cars fast enough.) I sure do miss my convertibles. Really miss them too at this time of year. But they just had accelerated decrepitude in my hands.
> and makes no effort to understand that many people cannot afford the quality goods the author can
A study done years ago found that the reason poor people stay poor is because they always buy the cheapest option so any money they save up ends up getting used right away to replace something. A never ending cycle of buy cheap/replace broken cheap stuff.
>For example, I use to drive sports cars and convertibles, but now I drive cheap econo-boxes. Why? They tend to be more reliable, less expensive per mile to maintain,
The point of buying quality is that it is cheaper to use and maintain. I think you're doing an apple/orange comparison here. Your sports cars were probably on the low end (and the quality end is probably just not attainable by working class people) while your "cheap econo-boxes" are probably higher on the quality scale for their class. You weren't being cheap here.
I know plenty of people who do go cheap with cars: they buy old used cars so they can do the repairs themselves. And every weekend that's exactly what they're doing: repairs. If they ever stopped and counted up their costs in time, parts and eventually replacing with another clunker they could probably lease a BMW cheaper.
You can eat your cake and have it, too. I have never spent more than $5000 on a vehicle, and I have only ended up with one lemon. Sometimes I do mechanical work myself, but only because I enjoy it. The rest of the time, I spend the money on a decent mechanic. I still come out ahead cost wise, even if you count my time, trouble, and other intangibles. Even better when you realize that my vehicles suffer virtually no depreciation.
A few hours of research and a $100 inspection prior to purchase will ensure you good odds of buying a reliable vehicle. There are no guarantees, but you can get pretty damn close. If you aren't comfortable with your own judgment, I'm sure you know someone who can advise you.
If you do choose to buy new (or relatively new), an 8-10 year ownership should be your goal. It usually takes that long to get real value for your money.
Considering that a new car loses a huge chunk of its "value" the second you drive it out of the car dealer's, if you're buying new the only sensible strategy is to drive it nearly into the ground. If you have to pay a wrecker to take it away, I agree, you may have taken it too far. But unless there are obscure tax reasons, I can't see any benefit to flipping cars regularly.
I once read about a strategy that made a great deal of sense to me, and that was to buy a 2-3 year old used car from a new car dealer, and sell it after 2-3 years to a private party.
There were all sorts of good reasons for that, some of which may no longer be valid, but some of the reasons were that a 2-3 year old car still had a lot of value but was at the end of it's steep price depreciation curve, and that the new car dealer didn't actually know how much the car was worth, they just knew that every day it sat there was another day of insurance they had to pay for, and sort of more proof to them that the car was not worth much. Also, by buying from a new car dealer, the car was probably in pretty good shape, the worse cars they had gotten rid of, the rest they had fixed up and cleaned up at rates that you or I couldn't get.
Because of that, with good negotiation, you could, in a sense, capture much of the profit the dealer had just made by giving the former owner of the used car a terribly low resale price followed by selling them a high priced new car.
They just made 20,000 by cheating the former owner on both ends of his deal. They don't know how much the used car is worth, but they are scared of it sitting there, and if you know how to price it, value it, and negotiate for it, you can get them to go very low on the price just so they can move it off the lot. You could in fact buy it for far below market rate. That was the theory then. And my own used car purchases showed that to be reasonable.
The claim was that by buying so cheaply a good used car from a dealer, you could sell it in 2-3 years to a private party at a good market rate, but probably very close to what you had paid for the used car 2-3 years earlier.
So... This strategy has actually worked out very well for me. And kept me in some very fun, relatively high end convertibles, starting with a Saab Turbo 900. Buying used cars from new car dealers seems to be a winning strategy.
But you have to remember to flip them. And that's been hard for me to do, in part because like an idiot, I drive too many miles to work, and have no time for selling cars to private parties. But if you're going to put a lot of miles on cars, I think you do need to either flip them or drive them to death, which is one reason I recently bought a low end econobox.
the new car dealer didn't actually know how much the car was worth
This statement confuses me. When I talk to car dealers, I notice that they always refer to the NADA guide to determine the worth -- even if you think that the blue book is too high, the sales guy certainly knows exactly what the car is worth, and would rather lose the sale than drop significantly below that price. I conclude that insurance and lot space must not be major costs per car.
Dealers make far more profit on used cars than they do new. Because of that, they are often much more willing to negotiate down if it's a tough-to-sell car that has been on their lot for an extended period of time.
The warranty. Every time I've tried to follow your intuitive logic here I've ended up spending more per month to keep the car usable. Personally I view cars as a tax that I just have to pay, so I get the (long term) cheapest I can that uses as little gas as possible.
There have been some amazing improvements in car safety and crash worthiness just in the past few years (at least at the higher end of the market). This has been driven by stricter government standards and widespread publication of safety data.
The thing is, it's really hard to quantify how much that extra safety is actually worth in terms of reduced risk of injury or death for a typical driver. If a QALY is worth, let's say $200K to me, then how many QALYs am I theoretically saving by trading in a 10 year old car for a new one? I would love to see a web application for this.
The way I see it there is a price/value curve where it's worth buying things at both ends.
At the high end you're paying a premium but you're getting a well designed and constructed item, which should last you a long time.
At the low end you're buying cheap crap but you're paying peanuts. You know there's no high end features, that it's not well made and if it breaks you just throw it out.
But in the middle you're paying more than the cheap stuff but you're mostly still getting crap, although here's it's likely to be 'branded' crap. Same thing as the cheap stuff, just more expensive.
So buy at both ends of the scale, not in the middle: buy cheap and get what value you can out of it, buy expensive and appreciate its value for a long time.
eh, several comments have gone on about the sears brand 'craftsman' wrenches. I like them too, but they are solidly in the middle of the price curve for tools. I also like kingston ram for my servers; Much like Craftsman tools, the stuff is good enough to get the job done and has an excellent warranty, but it's far from the best money can buy.
I think the top end usually has a huge 'you must be rich' price premium that doesn't usually make sense unless you use this tool all the time.
(Of course, we're both falling in to the trap of evaluating a product based on it's price positioning, which, I think, is quite often a mistake. The evaluation should be based on what you are paying for what you are getting, not based on where in the price curve your particular tool lies, I think.)
There is a cost to just throwing things out, even if its externalized. This cheap stuff has to be landfilled and much of it doesn't break down for thousands or millions of years. Many of it is also harmful to the environment, impacting and shortening human lives, including yours.
There is a hidden cost to owning "lifetime" stuff- you have to keep track of it, maintain it, and ensure it doesn't get damaged or stolen. sure, having a nice tool is nice, but it is also /more work/ for as long as I keep it. The $150 'paladin tools' brand cable tracer? it's pretty nice, but I've got to spend effort keeping track of it. I've ended up buying a bunch generic of $5 'continuity testers' and leaving one at each data center and one in my car. the nicer tool doesn't do me any good if it's across town. Also, if I drop something heavy on one of these or if someone steals it? who cares.
I mean, sometimes you need the quality part to do the job, and sometimes maintaining quality tools can even be a pleasurable experience, but recognize that there is a cost to owning stuff you can't just walk away from.
This. The peace of mind that comes with owning disposable or easily replaceable stuff is priceless. Every item I have to spend time and effort maintaining and worry about losing or damaging it is another golden ball and chain around my carefreeness.
But do you not see the externality there? Every "disposable" thing you own started life in a sweatshop and is destined for a landfill. Beyond a certain point, deliberately buying disposable instead of lifetime is just plain irresponsible.
I am thinking more of cheap consumer electronics, gadgets, etc, even clothes, that only last a year. In the case of the car, you've saved it from being disposed of by someone else, at least for a while.
My experience has been that cheaper clothing, on average, actually lasts longer than the more expensive stuff. The cheap stuff is designed for people who do physical work. even if you don't, the more durable fabric and stitching will stand up to more runs through the washing machine.
The jeans I'm wearing right now are the costco store brand; I bought a bunch during the first .com boom for $12 a pair and used them for quite some time.
My experience has been that more expensive jeans are usually made of thinner, weaker material. I bought a bunch of fairly nice calvin klein brand jeans which cost 3x as much as these jeans and they all suffered catastrophic failures within the first year or so of use. (nearly all of them, I'd go to lift something fairly heavy, I'd hear a tearing noise and feel a draft. Irritating, as I'd have to interrupt the work day to change pants. The costco brand jeans? when they fail it's usually that the knees or the seat would wear through.)
I'm just saying, expense does not correlate very well with durability. Have you ever owned a 10 year old BMW? I can tell you from experience that a 10 year old toyota is going to be more reliable.
I'm sure you can find many counterexamples; I mean, certainly a nice pair of vibram-soled leather boots is going to last longer than any athletic shoe; probably longer enough to make them cheaper over the long-term. Hell, if you want to look "professional" there are specialized work-slacks and button-down shirts made by companies like Dickies that are very durable but also fairly expensive.
But my point is that more expensive is usually not a very good heuristic for more durable, especially when dealing with fashion items.
The strange hate for people who are "cheap" is one of the more bizarre about Americans. I don't think I've ever heard of frugality used as a pejorative anywhere else in the English-speaking world.
I'm not at American, but what I see about your country is that it's huge and varied. Given this, it's hard to think of things as American qualities.
I generally disagree with the post. I think fountain pens and fancy notebooks are are a waste of time, though I've been through phases with both. For me - cheap pencils, cheap graph-paper, cheap folders, and a system to keep order.
There are often ways to be smart that don't involve spending money. There's an idea of people who have more money than sense who go with an expensive option because they're hoping that this increases their chance of getting the thing they will want/need.
I have a digital watch. It has a lap timer in it, and shows the full date, cost less than USD100 and far more reliable than the swiss watch I have.
But there is some truth in the article - if you're just frugal all the time out of principle it sends bad signals.
I think the moral of the story with this post is, "buy nice things for stuff that matters." I don't think $100 pens are important to most people who post here, but $2,000 mac laptops or cinema displays are. I spent $100 on a Timbuk2 bag because I use it nearly every day when I go to work and don't want to buy a $40 Swatch laptop bag from Target that will last me 6 months to a year before it breaks while going through security at Seatac. It's just not worth it.
"Frugal", almost by definition, cannot be used as a pejorative. When it's taken to excess, like the author is complaining about, the noun is "cheapskate" or "miser" and the adjective is "cheap" or "penny-pinching".
You're missing the point. The author has nothing against saving money or being frugal. He is just pointing out that for a variety of reasons, people who can afford better alternatives that would make them substantially happier/healthier/more productive choose cheaper alternatives for cheapness' sake.
It's a word trick. He's using a word that's most commonly a pejorative to draw people in, and then as people read the article they see that he just means that someone's exhibiting the literal meaning of loser (as in a 2 player game when there isn't a draw and there's a winner and a loser).
I think this depends on the definition. If you define it as "Given any competition with n competitors, where n>1, then n-1 of the competitors are losers", and you find 0 persons who have won all the competitions they participated in (which I think is a likely result), then everybody is a loser. Why should I think this is "bad"?
Besides the incredibly aggravating link-bait title—frugal is not equivalent to cheap. I consider myself to be quite frugal, but for the stuff that I do own, I have no objection to spending extra for the quality, luxury version—I couldn't agree more with the post's message.
I try to live my life in the most minimalistic fashion (see my apartment[1]), and am constantly looking to throw away things that add no value to my experiences. I strive to keep my desktop and mailbox empty. But by no means does that make me cheap: I pay for music, video streaming services. I buy premium items and food, because I know that improving my quality of life is the purpose of having money in the first place.
The cliche but somewhat true statement is: what good is all the money in my bank account going to do me when or if I'm not around to spend them. I'd rather live a good life now than the possibility of a better one in the future.
The privilege of spending extra on "nice things" is almost purely in the realm of the well-to-do. This is the rationale Rich White People™ use when buying L.L. Bean backpacks (LIFETIME WARRANTY GUYS) that end up piled in attics and covered in dust from neglect. Also, a downside of 'nice stuff' is you have to lug it everywhere. If you lead even a moderately itinerant lifestyle, this totally blows. Don't listen to some guy on the internet telling you your stuff sucks, just buy what you damn well please and what you think will do the job. Your tools don't make you great, your skills do.
You don't have to be well-to-do to afford something a little better than the absolute cheapest possible sh*t every now and again. What this article is really about is electing to allocate more money to important items if possible, rather than being pennywise and pound foolish.
Sounds like you're a "frugal" person who got offended at this (correct) message.
>Also, a downside of 'nice stuff' is you have to lug it everywhere.
What on earth are you talking about? If you buy a cheap generic $200 17" laptop you'll have to lug it around just as much as a nice MBP. The difference is; you'll have to replace the cheapy about 10 times in the lifetime of my MBP.
>I can throw out or resell a 400$ laptop with some ease; not so easy with a more expensive model.
I disagree here. If you pay $400 for it what is your resale value after a year? I wouldn't even pay $50 for a year old $400 laptop since it's nearing end of life. A good MBP, however could be sold three years later for half value or a little less. This is not a bad option for people who want the quality but can't afford a new one (and unless something big changes in the line it's not always so compelling to get the newest model anyway).
>I can't invest too much on a bed as I can't lug it around with my bedouin lifestyle.
Sounds sensible.
>I can imagine that is the case for quite a few people.
I can't imagine this being a very high % of people.
>It's great that you have stability of location but that isn't true for us all.
For me the key is to be sensible with money. If you're getting the cheapest thing because you've actually thought it out and it doesn't make sense to go for the long term (e.g. because there wont be one) then fair enough. Most of the people I know who go cheap do it because they're too intellectually lazy to work out that they're actually spending more in the long term (and conversations confirm this, I'm not being cynical).
It's hard to find a buyer for an expensive laptop. Furthermore, you can find people who buy Pentium 4 laptops for more than 50$ if the battery is working properly. Point being, a one-year old 400$ laptop selling for 200-300$ is not utterly unheard of, especially if you have kept good care of it. I understand that it may be different in other parts of the world. The additional liquidity of a cheaper asset shouldn't be underestimated.
I do think that we "computer people" are far more mobile than someone in more traditional fields; it's part and parcel of online / startup life. I used to shuttle between Montreal, Tokyo and Singapore all the time, and for a time I expected I would wind up in Singapore. Instead, I ended up in Tokyo. Who could have known? Thank God I didn't drop 2gs on a bed. (I wound up buying one on Craigslist for about $450)
I do agree with you for the most part about the disgusting low quality crap that people buy to save a dollar. However, I do feel the need to express why some people may come to different value propositions.
> It's hard to find a buyer for an expensive laptop.
Not to mention selling stuff is a pain in the ass. I'm a programmer, not a professional craigslist haggler. Buying things "because I can sell them later" has always burned me in the end.
You're experience is totally different to mine here in Europe. I don't know anyone who would even consider buying a cheap windows laptop online. You might be able to sell it to a family member or friend directly but that's it. Used macs, however, are an active market.
> Sounds like you're a "frugal" person who got offended at this (correct) message.
Sweet ad hominem attack, bro.
> The difference is; you'll have to replace the cheapy about 10 times in the lifetime of my MBP.
And when that sweet MBP gets stolen or you spill tea all over it rendering it useless, you have to spend a ton more to get it back/working again.
People keep saying "I never have to think about it again!!!" but the opposite happens: you turn into a little gollum thinking about and protecting your stuff whenever it's in danger. Again, I'm not advocating one or the other, just be aware that expensive stuff has downsides and making fun of people who choose not to have that is a shitty move.
I protect my laptop whether it's a $3k top-of-the-line MBP of a $200 Aldi special. The valuable part of my laptop is what's stored on it, not the eq itself which I have insured against theft.
The number of Tony Robbins-esque rah-rah lifestyle articles here has gotten entirely out of hand lately. Seeing this at #1 on the site today makes me want to delete my HN bookmark and be done with it.
I think a lot of people read its title and dismissed the article out-right because they didn't want to be called a loser because they considered themselves "frugal." The author of the article actually describes real frugalness, by getting what you pay for instead of just buying the cheapest thing possible.
I'm in a state of disbelief that this is the top article on HN right now.
Reading this article made me feel like I was shopping in the discount aisle of the pop-psych megalo-mart. This article is cheap shoes. It is poorly written, contains numerous abuses of the English language, and aims low at an obvious insight; the comments have been an order of magnitude more insightful. The author utterly misunderstands the meaning of the main thing he impugns: Frugality. Sorry, but this is a cheap knife with a flimsy blade.
Yes, it is a really awful article. I'm sure it's not the worst thing to ever be #1 though. Some of the specific advice is interesting, even if oddly wrong on specifics. Box springs aren't really important unless the design of your frame or style of mattress requires one. There is way more to buying shoes than getting the most comfortable ones for <$100.
Maybe I should write some call-out in overly emotional language about how you, Hacker News reader, should do ergonomics better. Probably I should just write it in earnest, but then it probably won't be interesting enough to capture the wisdom of the mob.
I'm not sure if the author of this piece even realized his own thesis, which was basically "spend money on ergonomics" and instead he linked it together under the guise of being frugal, where frugality is a great attribute that is in reality divorced from the logic of this article.
You're absolutely correct. It's a pity I can't upvote only the comment thread without upvoting the article.
I find the discussion here so good it reminds me of the "old HN" days :)
For mattresses buy pocket spring or latex foam. When me and my girlfriend switched to pocket springs we literally felled asleep the first time our heads touched the mattresses ... in the middle of the day, right after we set it up in our apartment. It's incredibly comfortable.
For shoes buy some trekking shoes with goretex membrane. You'll never have wet feet in your life again. My Garmont's served me well for last 8 ears. I just had to do minor adjustment year ago because soles have rubbed off not evenly. And I am yet to find shoelaces that don't break. I think about the ones made of kevlar. Before that I was buying sneakers and leather shoes that fell apart after 0.5-1 year and had to watch out for every puddle.
For your torso buy something from Polartec, as thick as you can find. And something thin, light breathable, waterproof and windstopping to wear it when it rains. Again you'll not get wet from the rain and dry up as fast as if you were wearing only t-shirt.
Always spend money on things that make you life easier or the things you have to do more comfortable. But when you don't have idea how good are the things you consider buying are always pick cheaper ones. High price never guarantees quality. It's often even strong indicator that seller is dishonest.
Oh. And don't make stuff up and don't buy things that will require from you doing additional things.
I also almost never bring damaged things to the store to have them replaced. It's easier to toss it away and buy something else. Much less unpleasant social interaction.
I personally went with the Tempurpedic Cloud memory foam. Very soft, but supportive. I'm tall (and therefore heavy), so I appreciate the lack of pressure points memory foam has going for it. The most importing thing, though, is to bargain them down to at least 40% off the original sticker price.
Goretex membrane shoes can be quite hot; often the non goretex versions of the same shoes are quite water resistant anyways, I never had a problem with my non-goretex hiking shoes until I wore them so much several holes appeared.
Just count the number of hours you use an item in a week. Anything you use for a large part of the week should be of high quality.
Bed, office chair, desk, computer screen, computer, cooking utensils if you cook a lot, phone - in my case.
My car is 10 years old and doesn't have an a/c but I use it irregularly for Kiteboarding purposes and don't care.
In essence, it's much harder to bear a small pain for a long time than it is to bear a big pain for a small amount of time. And the mental stress from the smaller and longer pain is much much more IMHO.
That's not a good metric. Everyone sleeps in their bed for a lot of hours per week but only a subset of people are sensitive to discomfort or back issues.
Why does anyone spend their time coming up with rules for what other people should do in situations that are inherently based on personal values?
If you don't buy a good bed you'll develop back issues.
And actually the majority of sedentary workers will have back issues in their lives so it's even more important.
This rule works for me and since it's not actually straight forward to figure out, I thought it would help others.
...or you could put a lightly padded mat on the floor. The cost is minimal and it makes my back feel healthier than a bed. As far as I can tell, beds are for comfort not health.
I kind of agree with the author about willing to spend big money on things that matter. Mattresses, computers, chairs, desks, things like that are all things that you use regularly.
Though that's now that I consider being Frugal. Being frugal is not only being practical with my money (buying what I need and knowing what I won't use). I had a strong desire of buying an iPad, but really I know I won't use it. It also involves making sure I take care of my things, I check my tires and oil on my car regularly. Doing the little things to keep your stuff going and not spending frivolously is being frugal.
These days, more and more I find that the sensible option is unfashionable. Fashion seems to disregard the practical and applaud foolishness.
I'm not talking haute couture, mind - but everyday people. Didn't get a new car? Weird. Still wearing your old shoes? Weird.
I seriously expect this trend to continue, Idiocracy-style, until utterly stupid is fashionable, like back in high school. Diesel has made a strong start.
Being cheap just for the sake of being cheap/frugal if the cost is not a constraint is not wise and often times produces little to negative return. Additionally, if the price tag is the only thing you are looking at and considering when buying something, you are most likely overlooking equally important costs down the road.
It seems people who are frugal/cheap fall in to a few categories:
* Little income and need to maximize runway
The best way to maximize your runway in this case is to reduce monthly/repeated expenditures, especially food and housing. Being frugal here is not only logical, it's a must.
* Saving for the long-term
Although you will net a bit of money this way over the really long-term, it's far more efficient and gratifying to figure out a way to disconnect your income from the the amount of time that you put in to making that income (e.g. making a smart investment with a high rate of return) in order to maximize your savings. Most people simply do not spend enough to see large savings through being frugal, at least not enough to significantly change their economic standing.
* Gaming factor
Some people just like the gratification of having gamed the system, which is understandable.
* Mental cobwebs
It's often the case that people who grow up poor are far more price conscious despite their current economic standing.
One thing I do is to allocate a bit of money each week to "lifestyle", This is the amount of money you allow yourself to waste every week. In my case it's around $25.
Situations to use it:
* Treat myself to a $10 lunch instead of a $5 one once a week
* Just pay for parking instead of driving around of 10 minutes looking for a free park.
* Catch a Taxi instead of walking or waiting for a bus
* Want a coke and the nearest store charges $4/can? just pay it rather than spending 10 minutes looking for a more reasonable price.
* See a cheap toy or a book that looks interesting. Just buy it.
Depending on how rich you are it could be more or less than $25/week. Somewhere between 0.1% and 1% of your income perhaps.
I think I may already practice everything this blog post tells me to, but I still feel insulted, both on my behalf and on behalf of people I know. The author comes off as a real dick. I can't point to any recommendation in the post I specifically disagree with, but I'm pretty confident if he met me he'd find some reason to think I'm a loser. And my whole family. And most of my friends.
Maybe it's because I don't take the same snotty attitude toward the "mediocrity" of consumer purchases. Maybe it's because I recognize that the "draining" and "grating" experience of using "piece of shit" stuff is, in many cases, entirely relative. My car is less a draining piece of shit than a $15,000 car and more a draining piece of shit than a $30,000 car. My television is less a piece of shit than a $1000 television and more a piece of shit than a $2000 television.
There's no magical way to get beyond "piece of shit" when there's always a better, more expensive item available. The shirts I buy are not as nice as the $200 shirts I'd buy if I were not paying careful attention to my spending. I tried to buy a sport coat a few months ago. I'm not really comfortable buying fancy clothes, so I just wandered around randomly for a week before giving up, but what do you know, the perfect jacket I found (not in my size, but perfect fabric) at Armani Exchange cost $2000 marked way down. Apparently I will not be buying a sport coat that makes me feel "quality" and "worth it." My favorite restaurants in town easily run into triple digits for two people or even for one -- I go occasionally and watch what I spend, and on rare occasions I have whatever I want. I don't feel like I'm eating shit and reinforcing the mentality that I'm a cheap piece of crap when I spend $15 on a meal, even if I usually would prefer the $50 meal.
There's no way I can escape those compromises. There's a hell of a lot of better stuff I would buy if I made twice the money I make now. There's no way I can escape consciousness of that better stuff, and there's no way I can escape the fact that there are plenty of people in town who don't have to make the same compromises I do. There's no way I can escape the fact that the fabrics I wear do not feel as nice as the fabrics they wear. There's no escaping the fact that I chose my apartment as a trade-off between niceness and location. I have a crappy apartment in a perfect location; most of my coworkers have beautiful, new houses in distant, desolate suburbs; and a few blocks away from me there are beautiful high-rise condos that are nicer than my coworkers' houses and more centrally located than my crappy apartment. I could afford one of those condos if I stopped contributing to my 401k and stopped saving for a down payment on a house.
Does my choice of apartment make me frugal? I pay more for a central location, which is what I want, so maybe I am following his advice. On the other hand, I pay less by accepting a crappier apartment, so maybe I am not following his advice. Actually, now that I think about it, I cannot be following his advice, because my apartment does not fill me with gratification and self-esteem. Even when I make the right decisions for myself, I never think "Damn, this is great, I am so totally worth this." Instead, I think, "This isn't the best or the worst, but it's the best trade-off for me. Some people who make the same money as me will spend more and have something better, and others will spend less and have something not as good."
I really don't feel bad about it until I run into people like this who ram it down my throat that not having the stuff I really want is supposed to make me feel cheap and unworthy compared to the people who can afford it.
And finally, not that anybody gives a shit anymore, it's just morally wrong to equate possession of higher quality stuff with a higher level of worthiness. If you indulge in the gratifying thought that your nice stuff reflects your superior worthiness, that generalizes to the perception that people with higher quality stuff are higher quality people. It's an inescapable mentality, you can't not think that way, but shouldn't we be working to moderate that prejudice instead of intentionally aggravating it?
I couldn't read past "I'm not worth it". Based on that and your reply here it just seems as though the author is materialistic. They're defining their worth by the quantity and quality of the goods they possess.
I don't see how that's a healthy attitude. I'm probably on an extreme end of the spectrum as I'm pretty minimalistic and don't have many possessions but those I do have are typically of higher quality. I don't buy those things because they make me feel like a better person, that I'm worthy of the higher quality things, or that I deserve them but rather because they generally don't cause me pain. Isn't that why we here on HN try to build high quality software? To solve and cure some kind of pain? I appreciate when a product does that so I'm willing to pay for it.
Qualifying your worth based on what you choose to purchase is short-sighted, physical goods no matter their quality deteriorate in usefulness and lustre with time. Experience, knowledge, and human relationships are enduring. Therefore I reject any notion that a person's worth is valued by the quantity and quality of their possessions.
I read the piece through to the end, and while I don't really like the way he presented it -- there's no need to call anyone a loser -- there is an important message to be shared. That is: care about the experience you give yourself. You clearly get this. Sometimes having fewer possessions results in the experience that we value more. Your views might share more with the author than it appears on the surface.
Where the author and I differ is that I don't always believe "spending more" is the key. More appropriately, spend where it matters. As a corollary, don't spend where it matters as well.
"1. Chasing more and more money is not a route to happiness. You shouldn't try specifically to acquire more money in the hopes that it will make you happy but rather, once you have money, think carefully about how you can use it to increase your happiness.
2. Using money to buy the wrong things (often: things which are popular, things which other people desire, things which require much manual upkeep or worry - see #3) does not result in happiness.
3. People often use money to buy things which they then spend time worrying about, rather than purchasing things which allow them to worry less."
The main argument is that it's not a good idea to be frugal just for the sake of being frugal - both extremes of materialism and the opposite are an unhealthy relationship with money or possessions. Buying better things isn't because "you're worth it", but because in some areas it will genuinely make your life a better experience. It's about evaluating all the circumstances and making the best decision rather than applying one credo constantly and repeatedly.
> That is: care about the experience you give yourself.
The key thing is, if you care about the experience you give yourself, it will be easier for you to give the same level of experience to others -- and they more likely than not will appreciate it.
No, he did point out some false economies, but the main thrust was the psychological effect of feeling that you've bought nice things for yourself. Buy yourself nice things, then you feel like a princess, and that feeling of self-worth rubs off on the rest of your life. The problem with it is that there's an ugly logic that you can't avoid. If getting what I want makes me worthy, what does it mean when I don't get what I want?
If getting what I want makes me worthy, what does it mean when I want something I can never have?
If getting what I want makes me worthy, what does it mean when others have more than me?
If getting what I want makes me worthy, what does it mean when others have less than me?
If you could isolate the positive, useful aspect -- "I got what I want, and therefore I'm a worthy person" -- then there would be nothing wrong with it. It's good and useful to believe you're a worthy person. Unfortunately, your brain has a certain capacity for logic (even if you're not an engineer or programmer type of person :-P) and you can't prevent it proceeding from that benign intention to its ugly logical reflection. It's logically a zero-sum game, and some of the logically "neutral" effects (assuming a rich person is more worthy than a poor person could be seen as logically neutral) are not really neutral because they are unjust.
Come on, every time I Don't get a piece of candy, I don't think "I must be a bad person". That logic is flawed. It is definitely NOT a zero-sum game. We're talking emotional logic here. Having something nice, for once, can make you feel good. And Not having nice things most of the time, for emotionally well-adjusted people, does not destroy our selfimage. Maybe just the opposite for some.
There's even the spite angle - I buy a crappy screwdriver, it breaks, I swear at it, I feel better. That's a payoff too. So its complicated.
Really? It's a poorly framed one with questionable premises (better quality stuff doesn't always mean the higher priced item), as well as extrapolating his utility function onto that of any reader. For example:
> So what if they’re $100. Unless you’re some sort of foot messenger, you only need to buy one pair a year.
Or buy $30 shoes that last 2 years and are subjectively just as comfortable. Maybe if you're a foot messenger you need better shoes (or go shoeless), maybe if you have bad feet or a bad back you need expensive shoes with Dr. Shoels. Another example?
> Buy scented candle or some potpourri and a stack of washcloths for your bathroom counter. It smells awesome and you feel great when you grab a fresh towel to wash your face every day.
I hate that crap. My point is that people have different utility functions.
I think I can do that too.
I think he never really implied that the highest price meant better quality. If you try, you can read that from the article, but there is something else you can read from it.
I think what he was saying was more like: if the difference in costs is smaller than the appreciated gaining in life comfort, then do it, spend the money in the expensive one.
The point being, don't be cheap if not being cheap can make your life better.
Interesting points. (I'm the original author, btw). Some thoughts:
The "loser" word choice, as someone pointed out below, was a double entendre, meant to mean, first, that you're losing in the long run when you make bad/cheap purchases, and second, that I think there is a psychological effect of surrounding yourself with low quality stuff.
Second, I'm really not talking about expensive v. cheap. Most of the stuff I'm talking about, like nail clippers, might be 2-3 times the price of the cheapest you could find, but still well under $10. And, the quality is so much better it makes life easier/more enjoyable.
And, of course there's a way to get beyond "piece of shit" when there's better or more expensive available. There are nail clippers on amazon right now for like $80. That's absurd. And, you can get fantastic meals for $15, or terrible meals for $80. I think that's kind of missing the point. We're talking about quality here, which isn't always synonymous with price.
As to the psychological effect: I don't think anyone literally thinks "damn, I'm worth this" (maybe occasionally as a rationalization?) or "damn, I'm not worth it". But, I really do think that there is some psychological effect of surrounding yourself with cheap, shitty quality stuff that never quite works right. Whether that's morally wrong or not, I think people do this to themselves (I've got no studies to back this one up, btw, just what I've observed). I also think there's a psychological upside to surrounding yourself with well-made and well-designed stuff. If nothing more, it frees up some neurons from getting angry at shit that doesn't work well, but even more so, for me at least, it helps creativity.
My budget which keeps my working on my startup is roughly $10/day. Explain to me why I, using nail clippers once a month, would spend $7 more dollars (my entire food budget for a day) on better nail clippers.
You're either exceptional, or live somewhere where the cost of living is very low compared to America. Even in the scuzzy college dives here in Raleigh, NC, it would be a struggle to live on $10/day ($300/month); my share of a 4-way rent split on a reasonably-decent apartment is >$300/mo.
If you're living on $300/mo in America, or somewhere with a similar cost of living (it sounds like the OP is), realize that (statistically speaking) the majority of the author's audience doesn't share your financial situation.
If you're living somewhere with a considerably lower cost of living, adjust the price of "better than bargain-bin" nail clippers for your locale, then reconsider the point the author is making.
Also, don't use nail clippers if the example doesn't fit your situation. I use nail clippers every week or two, so it's a good example for me. For you? Buy the paper plates that don't get soggy, and aren't so flimsy that you need two hands to keep your food from spilling. Or invest in a nice set of real plates once that you can use forever, instead of buying paper plates every couple of weeks.
Generalize. Don't reject the OP's point just because one specific example doesn't fit your lifestyle.
$10/day ignoring rent, sorry. The thing is, there is no point spending extra money on things you don't care about. None. Thinking otherwise is an unfortunate habit that a lot of people (myself included) pick up. "Oh, I'll buy the middle of the road X because it probably is better than the cheap one." It's a habit I've spent a lot of mental energy trying to unlearn and I apologize if I get a little touchy when people suggest I "don't respect myself" when I attempt to be cost-effective. I would much rather be defined by the stuff I make than the stuff I buy.
It's easy to say "spend $30 extra" when you actually have that money. There were times when I was in debt, and had like $10 on my bank account, and so many personal problems I couldn't handle work. His advice was pointless at the time. That advice is pointless for anyone who doesn't have free $30 to spend around.
My verdict: the author lives in a bubble that he has created and paid for. However, that bubble is also his prison; it suppresses his ability to make sudden changes in life.
I am fairly ok with sleeping on the street, since I've done it a number of times, so when it comes to making a mildly life-changing decision I'll be more confident about taking a risk.
Look, I like sitting here in a nice couch, typing on a Macbook about how hardcore I am, just as much as everyone else does. But ultimately, a nice couch is just that -- a nice couch, and a candle in the bathroom is just a fucking candle. And in a hundred years, no one will care if you had a nice couch or a candle in your bathroom, but they will if you wrote a book or created something beautiful.
"I get as much pleasure watching my bank account grow as I do from buying things or taking trips"
Pleasure from amassing wealth or things is misplaced. It's a dangerous addiction to nothing. Work on that before you lecture the frugal about being cheap.
Wow, I disagree. Starting with expensive shoes. I wear flip-flops, shorts, and a t-shirt to work everyday. I'm pretty comfortable. I don't see the correlation between expensive footwear and comfort.
Beds. Yes, you spend 1/3 your life in bed. And you spend it unconscious. You spend about 0.03% of your conscious life in bed while falling asleep (30 mins a day).
But more importantly: Relax. Just because you make a certain decision doesn't mean everyone else needs to.
> "I don't see the correlation between expensive footwear and comfort."
They often are more comfortable, it all depends on what you're doing. You wouldn't go on a long walk in those flip-flops, but if you did, you'd hope you'd have better shoes than $15 runners (seriously, huge difference).
But it's not just about comfort - it's about perception: how others perceive you, and how you perceive yourself. It's about hacking how others see you, and more importantly knowing yourself well enough to hack around your own behavior with your environment and possessions.
For example: cute girl over there, you want to go talk to her. What do you think will give you more confidence, you in a ratty but comfy t-shirt and shorts, or you dressed to the nines and knowing you look good enough to eat?
Another example: that work laptop you use every single day. They both compile code just as well as one another, but one is plasticky and flimsy, and the keyboard creaks annoyingly when you press a key a little too hard. The other is rock solid and feels like Zeus himself cast it out of Mt. Olympus. Which increases your productivity and general satisfaction while working?
> "Beds. Yes, you spend 1/3 your life in bed. And you spend it unconscious. You spend about 0.03% of your conscious life in bed while falling asleep (30 mins a day)."
Yes, but how rested you feel when you regain consciousness is very much related to the quality of your mattress. If we take your logic to its natural conclusion, we'd all just sleep on cardboard.
I don't see the correlation between expensive footwear and comfort.
For me the difference between good shoes and bad shoes is desperately wanting to sit down after a an hour on my feet and being able to walk for 8-10 hours without really feeling it. And while far from all expensive shoes are comfortable, I've yet to find a pair of comfortable shoes for less than $120, and my $350+ hiking boots are pure magic and somehow make even the hardest hike under the heaviest of loads so much easier.
As for beds, you're not unconscious while you're sleeping, you're sleeping, and not all sleep is equal. Sleeping in a comfortable bed means I wake up far more refreshed and with far less stiffness and muscle pain, than sleeping exactly the same amount of time in an uncomfortable bed.
I hate hiking boots and just use trail running shoes for everything that doesn't require rigid crampons. They're lighter, faster, more comfortable, dry more quickly, and cost around $100. Of course they wear out faster so it's not necessarily cheaper in the long run.
>I don't see the correlation between expensive footwear and comfort.<
There is a close correlation, but only if you buy genuine leather shoes. Good leather gets into shape while you wear it. If the leather is really tough, it takes a while, but afterwards these shoes will fit as if they were made for you. There is nothing that can be as comfortable, IMHO. The feet are always dry, warm and comfortable.
The price is high, of course. Good leather costs a fortune (you want the one without chemicals in them). Repairing these shoes is expensive too. Find the right person who does it well, find the right brands, so you don't buy expensive fake, etc. pp.
I own many hand made pairs, none of them less then 400 Euros worth (some more). This is not frugal, this is luxury. But I have 20 year old pairs that still look great and can easily be worn to the opera or a concert (if that's your kind of occupation). Calculating the price per year is also pretty good value for money.
But I would never dispute that flip flops are cheaper ;o). If you loose them, if they are damaged, no problem. Investment is also always a commitment.
The interesting question would be (to come back to what the original article is about): Do I feel better because I wear expensive shoes?
The answer is: no!
I feel good, because I want to wear nice shoes (sometimes, for reasons I have to discuss with Mr. Freud sometimes) and what makes me feel good is that I can fulfill my wish. Definitely not the fact that some of my shows are expensive.
I don't see the correlation between expensive footwear and comfort.
Neither did I, until I got plantar fasciitis from wearing cheap shoes, and couldn't stand or walk for more than 10 minutes without pain. Cheap shoes tend to skimp on the parts that provide support and impact resistance.
If nothing else, good shoes are worth the money they save you on podiatry.
How young/old are you? Sure, you can sleep on total crap when you're 18; when you are 40+, not so much. You'll damage a lot and might have serious problems later on in life. This goes for a lot of things. If you keep wearing flip-flops into your 40s, you'll probably get serious back, knee and hip problems. Good (and usually they are expensive) footwear is a must if you care about your body. So is a good night sleep on a well developed bed, if probably a medical bed (not sure what the English word is; in Germany tons of hotels have them and that made me buy one, in my 20s, i've never looked back), at any age (and those are expensive).
But if you don't care about the future, then sure; it's your life. But maybe you just never thought about this.
Edit: changed some 'will' into 'might'; some people just are unbreakable. Most of us are not though although we think so when nothing ever happened so far.
Edit: another good example is an office chair or standing table; just SPEND the money on really good desks and chairs; it's just plain stupid not to.
The biggest correlation is between upfront expense and long-term durability. Good shoes can be resoled, which is fairly cheap and can be done quickly. A good pair of leather shoes could last you 10 years. All you'd have to do is get them resoled each year or however often you wear through them.
Flip flops don't provide a lot of ankle support, and for some people that can be an issue. I walk between 5-7 miles a day, and while I find flip flops comfortable for lounging around, I wouldn't want to walk any serious distance in them.
I've found that certain shoes are much more comfortable than others, and they tend to not be on the cheap end of things (not the most expensive either). Because of how much I walk, I'd go through several shoes a year, and now I'm switching to only buying shoes that can be resoled. It will save me a lot of money in the long term.
30 minutes a day is about 2% of your life, not 0.03%.
If a less comfortable bed makes it take longer to fall asleep, then that figure just got bigger and there's an extra cost in time every single day.
If a less comfortable bed means you sleep worse, then again there's an extra cost in happiness and productivity every single day.
Now, whether spending more on your bed always makes it more comfortable, and whether that makes you sleep sooner and better, is a separate question. Got any evidence that bears on it?
I don't know about you, but I also have sex in my bed. And personally I prefer to have sex on a reasonably comfortable surface. Not saying that the floor can't be nice, but carpet burn isn't really my thing ...
There are studies that indicate that runners wearing $100+ shoes are much more prone to injury than runners wearing sub-$50 shoes. In fact, what's initially "comfortable" insulates our feet from important physical signals, leading to a lot of physical pain. (read the recent, excellent book "Born To Run" if you find this interesting)
My point is that not thinking about decisions "makes you a loser", and equating price with quality is often a mistake.
And since when did homo sapiens evolve to need a $600 matress? Folks around the world sleep on a futon, or the floor. Do they all get terrible sleep? Or do they adapt.
...or do they actually, in many circumstances, thrive because we've evolved to live under "thrifty" pre-industrial conditions? In the book I referenced (Born To Run), the author describes an extremely isolated Mexican tribe where 40-50 year old men regularly run 50-mile plus races in bare feet, in good part, many believe, because they've shunned shoes. I wouldn't be surprised if we come to the same conclusion about mattresses.
Again, I'm just throwing this in because I think it's best to think flexibly. I also often argue that it makes perfect sense to splurge on a $60 massage or a $75 per person meal every now and then because memorable experiences are surprisingly valuable and more permanent (in one's mind) than they might appear to the impulsively thrifty consumer.
Bed and chair manufacturers must love this post. While I agree that it's pointless to skimp on things which would make you more productive, it's not necessarily true that the really expensive ones are better.
Yeah, you have to be smart about it really. To me, the quality different between the super cheap mattress and the $500 ones is big. For the $500 to $1000 jump, not so much. Same with chairs, the worst office chairs are terrible and going to leave you with pain. The mid range ones to the top just aren't as big a difference.
A friend's uncle gave some very abrupt advice which has stuck with me. "There are people who figure out ways to save money and there are people who figure out ways to make more money."
I think it's perfectly acceptable to buy a cheap version of something if you're not sure how much you're going to be using it. For instance, if you decide to take up guitar, you'd be an idiot to spend $3000 on a nice Fender Stratocaster, because chances are you're going to play it for a week and then never touch it again. Same goes for a lot of hobbies. If you are going to use something a lot, however, I agree that you should eventually upgrade to the nicest stuff you can afford.
The surest way to be happy is to have a large safety net in all the things you really need.
You can skimp on the things you merely want, and still be happy.
Think of all the things you really need, the things you would be really miserable without. These are the ones you should splurge on. I mean, really, spend 2x as much as you think the average person would spend on them. Totally own it. Then you will always feel like your life is good. Because you don't sweat the small stuff :)
I didn't grow up with a lot of money, and was raised on the 'If it's available Wal-Mart, buy it at Wal-Mart' mentality.
Looking back on this, I wasted so much money on crap that just got replaced.
Now, I spare no expense (within reason....) to buy the nicest of what I want. End result? I'm more picky about what I buy, so I have fewer, but nicer things. and I am rarely left thinking "Well I wish my X could do Y".
I don't disagree with his suggestion that the primary tools you use in life and your trade should be high-quality. He's right about that specific statement. If I must eat a Ramen-equivalent to buy the tools I need, I will. However, most of us cannot afford his tastes in every area of life after paying for crappy health insurance, a mortgage, and children. He reads like a child who has never been forced to live on less and to value the tools we have.
Most normal people are aware that every purchasing decision we make involves trade-offs. We perform a cost-benefit analysis with many purchases. We think, if I cut back on buying fancy coffee over the course of a year, I will save up enough to afford a better laptop or a lower health insurance deductible.
The author has issues that need to be addressed. The whole article reads like someone rationalizing bad choices on luxury-branded products and criticizing in advance anyone who may one day point them out.
Obviously this article has hit a nerve. Its true, the tone is somewhat rude and I don't agree with all he says, but I'm happy about the discussions. I'm a cheap bastard and so are most of my friends. But I used to be the cheapest. Hell, in my climbing bum days before Uni, I even got called "cheap bastard" by fellow climbers on the campsite!
However, I'm changing. More into the direction that the author proposes. This year, I got a Mac. It was almost forced on me by a friend. I always liked Apple products but thought the price/value was just not good enough for a poor student. I think I was wrong. I never want to go back. I would probably clean toilets to afford a Mac if I have to.
The author touches an important point, especially for aspring entrepreneurs, when he says:
"Using well designed stuff reinforces the mindset of earning and creating. “Man, the world needs more well designed and well made stuff like this.” “Man, I’m going to earn more so I can have more well designed and well made stuff like this.”"
I couldn't agree more. How can you get costumers to buy quality from you if you don't choose quality over price in your daily life? Its hard to build something, that you have no experience with.
One advantage of buying cheap, though, is that its easier to get rid of them later. Hence, you might feel more freedom and flexibility. However, I'm starting to pay attention to aspects like weight and robustness so I don't have to leave them behind when I leave. What I really want to get rid of the next time I move is all the cheap stuff. On the other hand, having lots of cheap stuff is a good reservoir for hacks!
I also agree with the author on "The mental aspect [being cheap] is huge."
I'm trying to get rid of this problem, too. In the last month I've bought two free Apps [1] on online stores. I just felt they were worth the money. Later, when I learned this was actually true, I checked for the license and was pleased to see they where under GPL and Apache 2.0
[1] touch.txt for Android ($2) and Brisk ($15) for the Mac
There are two points here - the practical one (don't buy cheap stuff, you save money but it costs you time because it doesn't work as well, breaks and causes more grief than it's worth) and the mental one (because you're worth it).
The first one is fine and bang on the money, but are people actually getting their sense of self worth from the quality of their nail clippers or having pot pourri in the bathroom? Seriously?
If that's really the case then I'd suggest that people look at the underlying issue of why this is rather than papering over the cracks by buying nice stuff. The idea that your self worth comes down to your stuff is horrible and should only be true in the world of advertising and marketing.
So we have two sides of capitalism here: consumers who want to buy at a cheaper price, and consumers who want to spend more on quality/brand/etc.
I should change my nickname to "socialist_commentary" or something. Why not argue about why you need all these things and what you're doing by supporting particular companies (some of which may treat their workers like shit)? You're smart enough to talk about the price of the product, but not smart enough to talk about the companies and our consumerist culture in general? I don't buy that.
The author definitely makes a solid point: quality always wins. But the tone and delivery of this article made me feel like an idiot for ever buying anything on the cheap. Generally, I felt like I was back in high school being put down for buying the wrong pair of shoes. Reiterating that point, the author's delivery makes me feel like I've done something wrong, not put me on the path to being naive about frugality.
What is Frugal is subjective to your income. What makes a person feel good or bad is consequential of his social circle and what his friends/acquaintances have.
For eg: a person making $1 million a year, could buy a $40K car and feel like he was not compromising if all his friends had $30K cars.
However, a guy who is making a similar amount of money might not be too happy if he had to buy a Jag and all his friends had Ferraris.
Ignoring the whole loser argument that the author is making, the one good thing to consider here in the article is, its a good idea to spend proportional to the time you will be spending with the product.
For eg: If you are spending a lot of time on computer, you probably want to get something that is "good" quality and which is good for your eyes and has other benefits.
AJ is saying don't cut spending on things that affect your production. That's absolutely a no-brainer. Buy yourself good tools, ensure you get good sleep, keep your health up, keep your ability to walk.
Always spend more to increase your production by a bigger amount. It pays for itself in the end.
Now, how much should you cut on pure consumption? That's a tricky one. I tend to cut my consumption as low as I can without hurting my production. But do always spend well on tools, on getting your production up, on your health, and on taking good care of people who do right by you. Absolutely don't go cheap on that stuff, you wind up with less in the long run if you do.
Thanks Sebastian :) Some of the things I tried to point out in the post are things we often over look.
If you're a carpenter running a shop, it's a no-brainer to buy tools that help you be more productive and make your life easier. But, there are other tools or things we use every day, whose cumulative effects can be as important as the one big tool we spend most of our time on. Making the same smart decisions on those smaller things as we do on the larger ones isn't going to impact your bottom line in a meaningful way, but can dramatically impact your quality of life.
There is a difference between cheap and frugal. In accepted parlance "cheap" means making purchasing decisions based solely on price. "Frugal" means paying for value, which is what this post is ultimately recommending (despite the title) - a "lean" mentality, where you avoid needless cash burn (or saving) in favor of those things that really matter.
As someone who just voluntarially went from a house, 3 cars, and tons of junk - down to what I can fit in my hatchback (including furniture) and a basic apartment, I can tell you that nothing is more liberating to me than throwing away / selling junk that I didn't need, and being able to live without stuff owning me.
Sure, my backpack has a nice laptop, iPad, etc. - but to me those are true conveniences. I've slept for years on shit mattresses, and I've come to conclude that it's how hard I worked that most affects my sleep.
The cheap vs frugal debate can go on forever. I think it comes down to cost vs. convenience. If you're spending a ton of time and inconveniencing yourself trying to be frugal maybe it's not worth it. When I'm trying to save money on something I just ask myself whether the savings are going to inconvenience me a ton. If so, I just buy a better, more expensive product. If not, hey just get the cheaper product.
A better intelligent article would have address the total cost of ownership and efficiency of the product over its lifetime.
In that sense, buying better quality products which might be more expensive at first is a better deal. In this way I am willing to concede that you shouldn't sell yourself short. But this can honestly be all summoned up by saying, do your research before you buy.
Most of you are dicks. The guy makes sense, don't cheap out on the things that matter. Don't waste 30 minutes looking for nail trimmers every 2 weeks to save an extra $3.85.
Take what he says with a grain of salt and apply to your life what you think is right.
Hacker News comments are created by a bunch of self-righteous, over-generalizing trolls.
I'd just like to point out that true frugality doesn't lower your status. It raises mine because I have a higher standard of living and thus appear to have higher income than I actually do.
Miserly-ness is the result of something I call naive cost benefit analysis, which is an analysis that leaves out important variables.
Another thing not touched on, when you are buying the cheapest you can find you are often buying the product made from the lowest quality materials and assembled by the cheapest workers in the world often in terrible conditions.
A high quality mattress and king size bed, quality (and ALWAYS fresh) bed linen, good duvets etc is the best investment you can make no matter what your income bracket is, everyone needs this. Totally agree.
I can sleep on anything and be comfortable. A mattress salesman even told me that someone who has my body type doesn't need to spend big on a mattress if they're comfortable with a cheaper one. But there are things I put good money into that others wouldn't. Bloviating about what "everyone" needs or should do is pointless and shows a lack of understanding that people have different values.
I've bought $1 screwdrivers and $10 screwdrivers, and I can saw with some assurance that 1) there wasn't a 10x difference in utility and 2) my annoyance at #1 made it a far worse experiencs
A great post that will be misread by most people. Adam Carolla has a similar rant in his book about why your bed should be one of the nicest things you own.
One of the keys in all of this is differentiating between "cheap crap", "cheap crap with a big price tag", and "expensive but worth it". I recently went shoe shopping. I was looking for a pair of comfortable, casual shoes. What I came across were:
$50 bunch-of-choices, made in China
$150 Boss/Diesel/etc, made in China
$225 Mephisto, made in France
$325 Ferragamo, made in Italy.
There is one obvious "wrong" choice here, yet it's the one that many people end up with when they think they're going to "buy something nice".
I don't know about Ferragamo, but I do own several pairs (gasp!) of shoes in that price range from a famous shoe brand here ("van Bommel", for the Dutch reading this, and in case it matters). They will last for decades with proper care and resoling every couple of years, but that's not the reason I bought them; I'm pretty sure that after 15 years I'll want something different, vareity being the spice of life and all. It's because they look super sharp under my (priced to match, second gasp!) suits.
I have no way to measure if the dressing up has ever made a difference in a deal or presentation. Or that the extra confidence has ever been the tipping point. All I know is that the engineers who go on and on about how they're sticking it to The Man by doing their demos in jeans and sneakers stand there looking like just another barely socially adapted dude from the lab, while those who dress to look the part are the ones that people come to afterwards and remember.
Appearance matters. Not understanding this, or trying to be a rebel by breaking rules you don't fully understand, makes you a hacker who is only capable of hacking code (or circuits or whatever); and incapable of understanding and 'hacking' social customs and psychology.
(PS It may be different in the US, around these parts Mephisto is a brand for old people with bad feet; good shoes but not something you'd wear as a (even slightly) fashion-conscious professional. Is Mephisto 'fancy' in the US?).
I was not implying the Ferragamos were the wrong choice. Rather, the Boss/Diesel/etc. "designer" stuff that is probably made in the exact same Chinese factory as the $50 equivalents. I was trying to say "get it cheap, or get it right"
I've heard of an idiom "expensive is cheap" (kinda reminds you of "less is more").
The idea being, or rather my interpretation of it is: something of high quality that's 2x the price of something else of low quality is probably wroth 10x more, so it's actually "cheap" in the sense that you get a lot more than what you pay for.
This is totally a mindfuck designed to get you to buy more expensive stuff and not care. Yes, if you have the money and you've made a vaguely reasoned decision then buy the expensive thing by all means. But don't fork over extra money just because "expensive is cheap."
I understand your skepticism regarding spending extra money, but I do believe that "expensive" can often be "cheap". But it very much depends on your level of usage for the product in question.
To clarify hasenj's point about the more expensive thing being "worth 10x more", imagine that an expensive couch will last you 10 times longer than the cheap one (in addition to being more comfortable), but it will cost you twice as much. If owning a couch is an essential part of your desired lifestyle, then buying the more expensive couch is just the logical choice.
Of course, the real question is whether or not you really need couch? This is obviously a matter personal preference, but your present decision-making should incorporate your future preferences as well. There is often a lot of uncertainty in gauging your future level of need/want for a given product, which makes this a tricky game.
It's not meant to be taken literally. If you take "less is more" literally you'd end up living in a cave; of course that's not the intent of the saying.
It's not a mistake to spend a little extra for something you need. This idiom is designed as a counter-argument to people who buy cheap stuff and boast about how they "saved" money by buying cheap crap that doesn't work well and causes you headaches.
Frugality is not about consuming but investing in your life: that often contradicts with cheap.
Frugality is about not buying things you don't need but buying things you can't live without. A frugal person will typically invest in quality because he knows he'll be using the item for years and doesn't want to replace it every few.
I wouldn't consider myself extremely frugal but my favorite shoes I'm wearing today I bought in the year 2000. They feel great, they have never had to been repaired, they resist water enough, the leather is in good condition and actually they didn't cost much (guesstimate in today's currency: 100-150€). But I have this mindset that I don't need new shoes just for the sake of new shoes. That's frugality. I will wear mine for another ten years if only they'll hold together and still look tidy enough to walk into the public. (They look used of course, but still tidy.) If they don't, I'll have to buy a replacement pair.
Frugality is also sometimes buying the cheapest thing. Buying a cheap electric drill is frugal if you only drill a few times a year, which makes the drill last for decades. Buying the best that money can buy would be frugal if you're a carpenter or do renovations every week and need a professional grade durability; however, if you're not doing that you're not frugal but rather just going on the hifi tangent and in reality you want to buy the expensive model because of your ego only.
Frugality also brings focus to—I was going to say consumption but I'll say personal investment instead. It makes sense to buy quality items for what you love: if you love riding a bike then investing in a quality bike is frugal because it saves you and the environment from unneeded consumption and hair-pulling. But you can't love everything either. You can't have the top of the line computer, screen, home theater, coffee grinder, washing machine, mattress, toilet seat, motorcycle, car, bike, camera, video camera, clothes, shoes, accessories and consider yourself frugal. You can have one or two because you simply can't be spending all of your time only grinding coffee, coding, washing laundry, riding a motorbike, and shooting photos.
And yes, being frugal inevitably does make me look like a loser in the eyes of some people. But then what?
Other people's opinions about me are none of my business anyway.