The Difference Between Thrifty and Cheap

February 11, 2011

There is a difference between being thrifty; and being cheap. Being thrifty takes into account time and money, and occasionally payback time. Being cheap only counts the amount of money spent.

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Being thrifty means that you can purchase more of the things you need or save more money in the future, with your existing dollars.

So always put a dollar value on your time equal to what you get paid at work. I use a value of $20 per hour for my time (1/3 of what the experts say I am worth as a housewife). Then calculate all the costs of making something yourself, especially your time.

For example, making your own laundry soap. Add the cost of ingredients, the amount of time it takes to make it times the value of your time, then add the cost of anything else "used" like electricity for hot water, or heating the mixture.

Then compare it to the regular price of the item. If you are "spending" less by making it yourself, you are being thrifty.

When doing upgrades to a house, you have to consider how long will it take the savings to pay you back for the money you spend or how much value it adds to the resale value of your house. (This is the payback). Always consider the value of professional work done. Any job that you tackle for the first time is going to take you twice or three times as long as it would take a professional to do it. Do you want a job done, or do you want it done properly?

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Sometimes, being thrifty means spending more dollars, now to save more in the future.

As for freecycling, I am an avid freecycler. However, there are just some items that I can purchase for less than the total of my time, the cost of gas and the wear and tear on my vehicle. There is one additional thing to consider - the intrinsic value the item has to you. Is the item so unusual that you cannot purchase it in a store? Even when picking up an item for "free", you still have to do the comparison.

There is one thing though that is priceless, and that is doing something because you enjoy doing it. So even if you spend more to make something yourself, but you enjoy making it - that is the best of thrifty living!

By Mary from Hamilton, Ontario

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