Why 'Cheap' Doesn't Always Mean 'Inexpensive'

Saving money never goes out of style.

Having money for emergencies, retirement, rainy days, and other future needs will always be vital. By refraining from frivolous spending and resisting spontaneous purchases, we are better equipped to save for the unknown.

“Unless you control your money, making more won't help. You'll just have bigger payments.” – Dave Ramsey

But along your money-saving journey, you should ask yourself if an item’s price point is its only cost.

Saving money in the short term doesn’t always mean you’re saving in the long run. This misunderstanding happens when you choose not to purchase an essential item or service. You can incur “invisible costs” that you don’t see until much later.

For example, if you decide not to purchase new tires for your car when they are needed, several costly problems can occur. You could get a flat tire, do damage to your wheels, or even lose control and get in a wreck. Buying new tires increases your safety and helps prevent invisible costs down the road.

Keep reading to find out the difference between cheap and inexpensive. And learn how to get the most value out of purchases while remaining frugal.

Cheap vs. Frugal

You’ve heard people say, “I’m not cheap, I’m frugal!” But many people don’t understand the difference.

It’s all about short-term cost vs. long-term value.

A cheap item with a low purchase price might cost more in the long run when it prematurely needs replacing. Cheap people only look at price, while frugal people also consider long-term value.

Cheap vs. Frugal: Fast Food or Home-Cooked Meals?

A cheap person will say healthy food is more costly to purchase and will eat fast food instead.

Meanwhile, the frugal person knows that over the long term, a fast-food diet is bad for their health. And since medical care is far more expensive than buying healthy food, they opt for home-cooked meals instead.

Fast food may be cheaper in the short term, but over time, the cost of fast food – which includes medical care for poor health – surpasses the cost of healthy, home-cooked meals.

Eating healthy at home doesn’t have to be boring, either. Many frugal people eat incredibly well.

Cheap vs. Frugal: Fast Fashion or Durable Clothes?

The debate over fashion costs is a long-standing one. People might look at two shirts – both similar in appearance but with very different price tags – and wonder why anyone would buy the more expensive one.

“The bitterness of poor quality remains long after the sweetness of low price is forgotten.” – attributed to Benjamin Franklin.

The cheap person will look at fashion and focus on the lower purchase price. The frugal shopper will focus on the higher quality of an expensive item. That’s because items that are better made usually last longer.

Let’s look at an example:

Suppose you spend $20 on a blouse, while your frugal friend spends $40 on a similar, but higher-quality item. In two years, you may need to replace the cheap blouse twice, at a long-term cost of $60. Your frugal friend may still have the original shirt purchased for $40.

While cheaper fashion items might cost less upfront, they could cost more in the long run.

How to Be Frugal

Frugality is about remembering the big picture and focusing on the long term. The point of saving money is to have enough to live comfortably in the future. However, this doesn’t mean you can’t live comfortably today, too.

“I love to go and see all the things I am happy without.” – Socrates, on why he enjoyed going to the market.

If an item or service is more expensive but may improve the quality of your life, it might be a cost worth considering. Never purchase spontaneously – give yourself a week to decide if it’s truly worth buying. You may even have the opportunity to buy it on sale or at a discount.

Look at more than just an item’s immediate cost. Ask yourself what other possible costs you might incur if you don’t buy the item now.

'Cheap' Isn’t Always a Value

An old proverb says, “The art is not in making money but in keeping it.” As you become smarter with your purchases, it’s important to be smart in your savings too. At UFB Direct, we are here to help. Consider opening a high-yield savings account from UFB Direct to earn the most value from your hard-earned money.