My personal money journey has been one of extremes. As a kid growing up, my family was pretty thrifty and a lot of that rubbed off on me. I distinctly remember cautioning myself as an 11 year-old to not use too much detergent in the dishwasher because we couldn’t afford to waste it.
Skip ahead to my first year in college and the opposite was true – I was a spending maniac! I chose a super expensive school, ate out quite a bit despite having great dining hall food, bought expensive items like cashmere lined leather gloves (seriously), and went nuts with the detergent. Late teenage rebellion, maybe. In any case, I was in deep.
Once I came to my senses, I did an exaggerated pendulum swing in the opposite direction – overcompensating like a boss. That is the trap I want to help you avoid as you start making decisions to take more control of your money, because the life of a cheapskate tightwad is not a rich life, no matter how much money you have.
My second and third years of school, I was a cost-cutting machine. My wad was so tight, I risked turning my cash into diamonds (didn’t I wish). I thought that the best way to get to a place where I had lots of money was to hold onto as much of it as possible. I read that most wealthy individuals got and kept their wealth by not spending as much, and I wanted to do the same. I didn’t know the difference between being thrifty and being cheap, or that the miserly grip I had on money was not the same as being smart about when and how money left my hands, like most wealthy individuals do. I just thought the Scrooge McDuck strategy was the way to go if I wanted to increase my wealth.
So what did I do? Typical cheapskate stuff – we all know someone like that, right? Reading menus upside down so I could see the prices first, thinking “retail” was synonymous with “satan,” refusing to leave tips, refusing to give at church or to charity, skimping on gifts for even my closest friends and family, perfecting the art of mooching and otherwise being the biggest tool in the box about everything that had dollar signs associated with it.
Luckily, my friends called me on my shenanigans in a loving way, and it changed my life and the way I looked at money. This time, I didn’t overcompensate. I realized that my stingy attitude was affecting the people I loved, the way I treated other people, and even my outlook on the world and on life. Being a cheapskate is a depressing way to live, really. Constantly living with a parsimonious mindset is a kind of paranoia that makes you think everyone is out to rip you off. It soured the way I thought of others, like generosity was irresponsible or weak, or like people who were not as tight with their money were somehow less disciplined than I was and were therefore less cool than I was. I finally realized this was happening and that I sounded like a movie villain, even cackling as I tallied up the money I had “liberated” from the evil folks trying to take it from me.
Wow! Sounds pretty bleak, right?
Well, it doesn’t have to be so extreme. You don’t have to have a black heart full of mistrust or a crocodile death grip on your cash in order to spend less than you make and be smart with the rest, saving, planning, and giving in a balanced way that will increase your net worth and overall ability to do more with your money. You only have to be smart, sticking to your plan, thinking ahead, and building little by little to the place where you want to be.
Now that I’m debt free, make and stick to budgets, track my spending wisely, and making it a priority to be generous, I get a real kick out of the way I used to think. The pendulum is in a healthy spot now where I can give without guilt or mistrust. My wife and I actually have a budget category for random acts of kindness, because its just awesome to be able to make someone’s day by buying their coffee or groceries or giving a hot footlong sandwich to a homeless dude on a cold day. I still don’t pay full retail price for anything if I can help it, but that’s just good sense. What’s really changed is the attitude of my mind and heart where it comes to money.
I want to encourage you as you start taking control of your money to keep your attitude in a good place. Spendthrifts and Cheapskates alike are obsessed with their money in a similar way – it still dominates them and their attitude, whether entitled or miserly, is still sour and stinky. Don’t be like I was, because I didn’t enjoy life or really even save that much by acting like a toolbag, and I ended up hurting more people than I helped. When you are in control of your money, you are free from these kinds of pitfalls.
So, please: be smart, be thrifty, be generous when you’re able, and work hard and live free.