When many people think about becoming budget-conscious, they cringe because they associate living on a budget with being cheap. They don’t want to be known as, “That cheap SOB.”What they don’t understand is that the two terms are very different. You can live on/within a budget without being cheap.
Living on or within a budget means that you know how much money is coming in and how much you have available to spend on things like housing, food, utilities, and extras. A budget keeps you from overspending because you know exactly what you have and where it’s going. You’re saving money, but you’re doing it by spending wisely (or not at all). Being cheap, on the other hand, means being stingy or miserly. It means sometimes resorting to questionable or unethical means to save money, or doing things that hurt others in the process. Here are some examples of the differences between budget and cheap.
- Someone on a budget either doesn’t go out to eat at all if it isn’t in the budget, goes to restaurants that offer coupons or special deals, or they simply go to restaurants that have prices that fit into their budget. The cheap person goes to eat somewhere that they can’t really afford but cuts the bill down by skipping the gratuity, bringing in their own drinks, or lying about their kids’ ages so the “older” kids can qualify for the children’s menu.
- The person on a budget does what they can to save on pet expenses by looking for low-cost veterinary clinics. The cheap person opts to forego routine vaccinations so he can dodge the pet ownership tax and then gets upset when the pet gets rabies.
- The person on a budget returns things with a receipt or accepts store credit/less money back if they no longer have the receipt. The cheap person tries to “game the system” by returning things to the stores with be laxest return policies, even if the item wasn’t purchased there.
- The person on a budget uses coupons in accordance with the rules of the retailer and the coupon. The cheap person exploits loopholes in the system and engages in coupon fraud, not caring that getting away with it doesn’t make it right.
- The person on a budget has a budget for travel or other recreational activities and spends accordingly. If the activity can’t be paid for, it isn’t done. The cheap person, on the other hand, lies about the kids’ (or adults) ages to get discounted admissions to movies or theme parks.
- Someone who is on a budget goes to a restaurant on their birthday to get the free dessert or appetizer. The cheap person lies and says that it’s their birthday several times per year to get the freebie.
- The person on a budget knows how much they can spend on utilities and does their best to keep everyone comfortable within that range. The cheap person is willing to freeze or roast everyone else in the house just to save a few pennies.
- The person on a budget will research the best deal on an item and get it without hurting anyone else. If the item cannot be had without a Black Friday beat down, the person on a budget will often find another way to get the item knowing that good deals come around all the time. The cheap person will trample others or push them out of the way to get a deal. The deal is more important than safety or sense to a cheap person.
- The person on a budget goes out to dinner with friends and orders only what they can pay for. The cheap person goes out to dinner with friends and orders appetizers, alcoholic drinks and an entree and then demands that the bill be split equally with everyone else at the table.
- A person on a budget rents DVD’s, buys them used, or borrows them from the library to save money. They do much the same with other forms of media such as music or books. The cheap person pirates illegal copies of music, books and movies.
- The person on a budget will ask a neighbor if they can borrow a tool or barter for some labor on a project. They are always careful to repay the favor, or to offer some other compensation. The cheap person will ask for things over and over again and never make a move to return the favor or compensate the other person in any way.
- The person on a budget finds a way to be charitable that is in line with their finances. Maybe they give a little less, reduce the number or organizations to which they contribute, or they give their time instead of money. The cheap person either doesn’t give at all, or gives things like used clothing or furniture so full of stains and holes that it is of no use to anyone. Yet they virtuously claim, “I gave to charity.”
- The budget-conscious person reports all taxes that they owe, including ones they might be able to dodge (such as online sales/use taxes that are now supposed to be reported in many states or hobby income that should be reported). The person on a budget knows that reporting now will save them many headaches down the road. The cheap person either lies and pays too little or simply pays nothing, hoping never to be caught.
See the difference? The budget-conscious person spends in harmony with their means. The cheap person either tries to save money at the expense of others or cheats the system in some way. Think of it this way: Living on a budget is a way of being financially smart and responsible with your money management. Being cheap is a personality defect.
If you decide to live on a budget, don’t get confused and think that you’re being cheap and that you’re now a horrible person. (Of course, it’s possible to take budgeting too far and slide into becoming cheap, but it takes some effort to sink that low.) In our culture spending less than you can is often called being “cheap” and it’s meant in a derogatory way. We’re taught to spend all we have and then some and to live on a budget makes you stand out from the herd. It’s easy for people to label those that are different as “cheap,” but unless you’re putting money above common sense, the law, and the well-being of others, chances are you’re not being cheap but budget smart.
(Photo courtesy of ecastro)