Money Management

You Don’t Have to Be Cheap (Or Even Frugal) to Make Good Money Decisions

By  Karen Banes

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After years of writing about personal finance, I can confirm something important. Many people strongly resist ‘frugality’, and some of them have very good reasons. One thing I’ve noticed is that if you grew up middle-class and secure, frugality can seem attractive and fun. If you grew up poor and deprived, frugality can be triggering and traumatic. Shopping second hand can be a big novelty, and give you a kind of rush if you’ve never done it before. But it can literally make you feel sick if you always had to get everything second-hand your whole life and were judged by your classmates for it.

Being frugal can also be confused with being cheap. Other people may have their own definitions when it comes to this, but for me, I consider I’m being frugal when I limit spending on myself and being cheap when my reluctance to spend money impacts other people. Switching utility suppliers to save money is frugal. Not buying a friend a birthday present is cheap.

The point is, you really don’t have to be frugal or cheap to make good money decisions. Perhaps the most important thing to be, when making money decisions, is mindful, or intentional. I totally get it that people don’t want to deprive themselves of nice things. You only live once. You want to enjoy life. The problem with bad, mindless money decisions is that they don’t actually contribute to your enjoyment of the world. In fact, they tend to bring unnecessary stress into your life.

Here’s how you make good money decisions, without depriving yourself of anything.

Know Yourself

Way too many purchases are made for reasons that have nothing to do with actually wanting the item you’re purchasing. People buy things they don’t want because of peer pressure, clever marketing, or society’s expectations. They buy something they don’t want on impulse, or to impress someone, or to appear more sophisticated than they are. They order expensive wine or a cocktail when they’d genuinely rather have a beer, or book a vacation to Rome when they’d rather spend a week in a wilderness cabin reading a good book.

I saw a social media thread recently that asked people to name a single item they’d spent over $1000 on that was totally worth it. A few people named a designer purse or item of clothing. Most people named an experience or something that was related to experiences. Interestingly, only one person mentioned their car. There were multiple mentions of canoes and paddleboards. Ultimately most people feel that a day on the water is worth a big purchase. That thrill you get when someone notices your shiny new car? Not worth much, as it turns out. Knowing who you are and what you love doing will guide your money decisions better than a messy mixture of impulse and conformity.

Take Yourself Off Automatic

I’m not talking about payments here. I’m actually a fan of automatic payments for things you really need. They simplify your finances and your life. I’m talking about spending. No purchase should be fully automatic. It’s almost always a good idea to think about it. Depending on the item and the circumstances you may need to think for a few seconds or a few months. Just practice the mindfulness needed to delay the purchase long enough to be sure you are making it for the right reasons. This mindfulness can also reassure you that you’re not denying yourself something for the wrong reasons. Healthy money decisions sometimes involve developing the confidence to buy the things that will add genuine value to your life.

Cultivate an Abundance Mindset

This is a mindset where you acknowledge your good fortune (whatever form it may take) and believe there is enough of everything for everyone (including you) to have what you want in life. It involves you focusing on what you have, rather than what you want. That doesn’t mean you’re not allowed to want, save for, and buy nice things. It simply means that you are able to focus on all the good stuff that already exists in your life, which really cuts down the time and energy available to focus on what’s missing.

People who have an abundance mindset tend to be able to happily limit their spending and make sensible money decisions without feeling they’re being cheap, overly frugal, or deprived. The opposite of an abundance mindset is a scarcity mindset, which can result in making mindless spending decisions, especially when clever marketing departments use scarcity tactics to force a quick decision.

Ultimately, good money decisions are usually decisions that make you happy, long-term. Depriving ourselves of things we think we need or want makes us unhappy. But so does purchasing a lot of things we think we need or want, but that actually add no value to our lives. Clutter doesn’t make us happy. Neither do shallow, unnecessary things, if they distract us from other, more important things. Even the taste of good wine doesn’t really make us happy when we’re craving a beer. Making good money decisions isn’t always about being cheap or frugal. More often it’s about being mindful and honest.

Karen Banes

About the Author

Karen Banes

I’m a freelance writer specializing in online business, personal finance, travel and lifestyle. I also work as a content creator for hire, helping brands and businesses tell their stories, grow their audiences, and reach their ideal customers. I’ve lived, worked and studied in six countries, across three continents. Stop by my blog to learn how to run your own (very) small business on your own terms. You can also connect with me at my website or follow me on

Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.

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