The cheapskate next door

This is a guest post from Jeff Yeager, author of the newly-published ">The Cheapskate Next Door. Yeager calls himself the Ultimate Cheapskate — and his wife agrees. Yeager is also a contributor at Wise Bread and on the Early Retirement forums.

“Sure, we could afford to spend more, but why would we? It wouldn’t make us any happier.” — Those are the words I’ve spent the last two-and-a-half years traveling the country to hear. It’s a simple but rare statement, given that nearly half of all Americans say that they literally live paycheck-to-paycheck and have little if any savings.

How can some people live not only within their means, but substantially below their means — even when their incomes are often less than the national average? And here’s the biggest question of all: How can some of those same people insist that they’re happier — joyous, really — because of their thrift and frugality?

Some of what I found may not surprise you. These frugal folks:

• Despise debt and have found creative ways to eliminate it from their lives.
• Differentiate between “needs” and “wants,” and between “affordability” and “borrow-ability”.
• And, yes, most own and still wear at least one article of clothing dating back to the Carter administration (or earlier).

These aren’t your miserable, Scrooge-like cheapskates. These are folks who know what’s important in life, and they skip the rest. Here’s a glimpse inside the mind of the Cheapskates Next Door:

• Cheapskates say, “The Joneses can kiss our assets.” Cheapskates are highly self-confident and proud of their frugal lifestyles, caring very little about what others think of them and even less about things like buying designer brand names and keeping up appearances with the Joneses.
• Cheapskates are immune from buyer’s remorse. Most shoppers eventually regret nearly 80% of the discretionary items they buy; but cheapskates are “premeditated shoppers” and, because of it, are largely immune from buyer’s remorse. Nearly 90% of the cheapskates surveyed say they “never” or “rarely” regret a purchase. And they don’t shop for “recreation” or “therapy,” which is one reason they prefer shopping at thrift stores (with a more certain selection of merchandise) than wasting time shopping at yard sales.
• Cheapskates appreciate appreciation (and depreciation, too). Other than when buying a house, most people usually don’t think about whether something will increase or decrease in value after they buy it. Cheapskates are tuned into appreciation/depreciation, often preferring to buy antique furniture (like the Amish do) that will retain/increase in value, and buying everything from cars to computers to clothing used, rather than new, so that the first owner pays for most of the depreciation.
• Cheapskates know that the best Things in life aren’t things. Social science has shown that Stuff tends to disappoint us over time, but experiences — how we spend our time — is what adds true value and meaning to life. Cheapskates value their time, and the things they can do with it, more than money, and the things they can buy with it.
• Cheapskates answer to a higher authority. For most of the cheapskates polled, it’s truly not about the money. Nine out of ten cheapskates say that their decision to live a more frugal life isn’t about trying to amass a big savings account; rather it’s primarily grounded in some higher ideals, such as religious beliefs or environmentalism. That’s why, of the cheapskates polled, they donate nearly twice as much to charity as the average American.