How to Stop Being Cheap

Hey everyone! Today, I want to talk about being too cheap. This is a bit unusual because being cheap gives you a huge advantage in achieving financial independence. However, we are all at a different point in our journey. Being cheap was very useful for me when I was young. However, we are older and wealthier now. The time to be cheap is long gone. Why deprive yourself? You can’t take it with you, right?

This year, we are on track to spend about $65,000. That’s much less than 3% of our net worth. At this rate, we’ll have plenty of money left when we check out. Actually, I don’t think this is a big problem. If we have extra money left at the end, we can give it to our son and support some charities. But we also want to enjoy spending some money while we can.

Delayed gratification

I practiced delayed gratification and preached its virtues for many years. If you can invest your income instead of spending it frivolously, you’ll be a lot more secure financially. After years of practice, delayed gratification has become a deeply ingrained habit. My first instinct is to put off purchases or buy something cheap. This served me well and we grew our net worth steadily over the last 30 years.

Recently, Mrs. RB40 complained that we’re too cheap and I agree. She has been cheap since she was little as well. It’s hard for her to spend money on herself. (Yes, I know I’m extremely lucky.) But we are very comfortable financially now. We should spend more and help the economy. So how can we overcome our cheapness?

Inflation

Fortunately, I found being cheap is an easy problem to overcome. It only took the election to move us toward instant gratification. President Trump promised massive tariffs on imports. Next year, everything will be 10-25% more expensive. If we delay purchasing, we’ll pay a lot more. It’s better to buy now because inflation is coming back.

That’s why we got a new laptop, a soundbar, a fancy chef knife, a bass ukulele, a hair regrow kit, workout dumbbells, elbow braces, rechargeable batteries, multivitamins, gloves, and some nice ceramic cups. Spending more turns out to be damn easy. However, I still gravitate toward the cheaper end of the price spectrum.

The only top-shelf item on this list is the chef knife from Acre Forge. We probably could have paid less for a comparable knife, but we want to support the local craftspeople. This knife cuts like a dream. It’s a huge upgrade from the Calphalon chef knife we used for the last 25 years. Mrs. RB40 loves it. I’m keeping the Calphalon, though. It has its uses.

We got this knife at the Holiday Market at NW Marine Art Works. There were many interesting arts and crafts items for sale. Mrs. RB40 saw a ceramic plate she liked for $90, but the color was just a little off. I promised I’d make one for her next quarter. I guess I’m not that frivolous yet.

First World Problem

Anyway, this is a First World problem. It’s easy to ramp up spending. Now that we are comfortable financially, I don’t mind spending more on things we use daily. A good chef knife will last a lifetime and we use it multiple times per day. It already improved my life by making Mrs. RB40 happy. Hahaha…

The other stuff I purchased was on my list for a long time. There is no point in delaying gratification if the price will increase significantly next year. I think a lot of people feel this way. The line at Best Buy was nuts.

Anyway, if you have difficulties spending money, just think about the upcoming tariffs. Next year, it’ll cost more. If you want something, get it now.

Do you have a problem with being too cheap? It’s hard to change your habits.

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.