When It Pays To Be Cheap
I consider myself frugal in most ways, but not really “cheap”. Sometimes I approach that thinly drawn line between frugal and cheap and dip my toe over the line to the dark side of cheapdom. Last week an editor from Business Insider contacted me and asked me to highlight a few specific items where it makes sense to be downright cheap.
The question was specific enough that I knew they weren’t looking for advice on saving money generally, otherwise I would have mentioned buying only the house that you need, keeping auto costs low, and being your own insurance company to slash insurance costs. Those categories can be big budget killers without necessarily enhancing your quality of life or happiness.
The editor was looking for tips to save money in areas where it pays to be cheap. I took this to include areas that were personal to me, but might not apply to everyone.
Here is the original “interview” response I sent by email:
Toothpaste – Buy the cheap stuff unless your dentist recommends a specific brand or Sensodyne for sensitive teeth. Fluoride (the active ingredient) is what you need and the under-a-buck toothpaste is full of it just like the $5/tube Ultra-whitening-fresh-breath-minty-with-baking-soda kind.
Store brand foods – No coupons required, sometimes half the cost of name brand, 100% money back guarantees are common (but rarely used)
Generics for medicine – Same active ingredients, half the cost. If I can find a $4 bottle of cough syrup at the $1 store, I’m buying a couple of bottles.
Toilet paper – Skip the ultra-thin Scott’s but get the next least expensive kind. You only use it once.
Coffee – I get zero value out of “fancy coffee” so I tend to go for the $5-6 big cans (~2 lb) of store brand or whatever is on sale.
Wine – Same thing – the $3-4 stuff tastes as good as the $10 stuff (to me)
Electronics – I tend to go for the low end stuff. Most tech toys are obsolete after a few years anyway, so longevity or durability isn’t too important since you’ll likely want to upgrade before your device dies. Who’s using an iphone 1 today (even though it’s only six years old)? Low end tech today was high end tech 2 years ago.
Closing thoughts – It’s really about finding “enough” quality at a very low price. Take what you save and spend it on something fun (or save it to fund your eventual financial independence/retirement).
The Business Insider editor had one follow up request. ”Electronics” are apparently the sacred cows of their readers and she preferred not to include electronics in the list of things to buy on the cheap (per the editor above her). I offered “tools” as a substitute:
Tools – For most infrequent users of tools, going cheap makes sense. The end goal is to fix something yourself, and if a $2 screwdriver set gets the job done as well as a $20 set, why pay more? Power tools with batteries might be an exception (and an area where I might choose to spend more on a mid-range cordless drill, for example).
Here’s the full story at Business Insider (also featuring some smart tips from Kristen Cross from The Frugal Girl). The article was picked up by Yahoo! Finance, Time Warner Cable’s various news outlets, and Business Insider Singapore.
My thoughts on the article
It was awesome! While the tips won’t save you thousands of dollars instantly, it’s a good way to sharpen your spending skills and cut out wasteful spending where it doesn’t really bring you value. I still stand by my assertion that you can go cheap on electronics and still end up with some awesome gear. But we’ll keep that secret between me and the Root of Good readers.
I don’t know exactly how much we save by going the cheap route in the areas I outlined. I’ll venture a guess that we save at least a couple hundred dollars per month by buying store brand foods, cheap paper goods and toiletries and going cheap on wine, coffee and a few other grocery items. Over the course of the year, that’s a few thousand dollars in savings.
I understand that oenophiles and connoisseurs of fine coffee find my suggestions leaving a bad taste in their mouth. And that’s okay. I personally don’t get any more enjoyment from a “good” cup of coffee than I do a plain old cup of the cheap stuff (with a little sugar and cream, of course). I’m a pretty boring wine drinker, and couldn’t tell a $100 bottle of wine from a $3 bottle. I just can’t do it.
It would be like asking me to distinguish between “good” abstract art and finger paintings carefully smeared on a canvas by a four year old. I just can’t do it. Sometimes the “real” stuff is appealing to me, other times it’s crap. Sometimes the four year old makes beautiful compositions, other times it’s obvious they would be better served skipping the preschool art class and having a second helping of recess or science.
To the coffee lovers and the oenophiles, I say indulge yourselves. If the $12/lb coffee is four times better than the $3/lb stuff I buy, go for it! If the $30+ bottle of wine is all you can stomach, and the idea of drinking Three Buck Chuck next to us proles makes you queasy, then pay up and drink on!
I don’t buy a lot of tools these days. But when I do, it’s usually a special tool I won’t use a lot. An air conditioner manifold gauge set was my latest purchase. At $40 new from Harbor Freight, it feels like a really solid piece of equipment and the online reviews are excellent. I’m not sure if I’ll be able to fix my car’s air conditioning, but at least I know it’s low on refrigerant and I can refill it to the recommended level using the tool I bought. I may use the manifold gauge set only a few times in the next decade (or maybe annually to check my own home air conditioning system!), so I didn’t need a professional set of gauges. The $40 version works well enough for my needs.
Comments from readers at Business Insider and Yahoo! Finance:
There were hundreds of comments at Business Insider and Yahoo! Finance. Instead of jumping into the fray over there, I figured I would select a few comments and compose my response to those comments here.
Store brand foods
When shopping the dollar store, you need to be careful that the product IS overstock or damaged carton and NOT expired or a knock off made in another country. Shopping store brands and sales is a good way to save. Buy enough to last until the next sale. Store brands are made by a company that also makes a name brand, it is just labeled as a store brand. – Merav
About ten years ago, I swore off buying food items from dollar stores. Since then, I’ve returned to buying select items from dollar stores. Thanks, Merav, for pointing out you have to pay attention to labels, conditions, and expiration dates.
Make sure you’re getting what you think you are getting. I saw “sour kreme” at one dollar store that wasn’t a dairy product at all. It was “partially hydrogenated vegetable oil” with sour cream flavoring (that’s why they couldn’t use the word “cream” in the name). Gross. I can pay slightly more than $1 for the real deal at Aldi’s or elsewhere.
Generic medicines are inspected by the same procedures used for branded, so they are safe. They are also just as effective, except when they are not. If your doctor is good, they will know when to give you generics and when to dispense-as-written (that little DAW box on the prescription pad is there for a reason). My doctor, for example, gives me generics for everything I need except one drug, which he says he has found works slightly better than the generic counterparts. – “Commenter”
The generics work just as well as the name brands almost all the time. But when in doubt, follow the advice of your doctor or pharmacist. They are generally more right than wrong. Some of the name brand prescription drugs have a very similar generic version with the only name brand difference being a different kind of coating or formulation to extend the time release of the active ingredient.
Drug companies can get another 17 year patent when they add something simple like “extended time release” to a previous drug that has lost its patent protection and has thereby entered the generic realm. Sometimes you need the new and improved name brand version, but often the generic will work just fine.
A lot of name brands are sold at the Dollar Store (Colgate, Crest, Campbell’s, Progresso, Sargento, to name just a few). For other stuff, it depends of your taste (food and drink) or what your using it for. If you need aluminum foil for decorating or a school project, then the Dollar Store brand is as good as heavy duty Reynolds. For covering a Bar-B-Q grill, not so much! – Chicago
I have noticed a lot more name brands showing up at the dollar store, too. I just bought a few cans of artichokes that were “Progresso” brand. They aren’t expired or dented. Just regular artichokes. For $1.
As for your other comments – the quality of items at the dollar store can vary a lot. If it’s way cheaper than a regular store, I’ll give it a shot.
He’s wrong about Toilet Paper, wine and coffee…there IS a difference…the fact that this guy can’t tell means he has no taste – JackR
So far, I have never tasted toilet paper. You use it once and then you throw it away.
As for toilet paper, where exactly could one find cheaper yet just as effective toilet paper? If it’s too flimsy you will be using more of it. – OobieDoob
Walmart. The big package with 24 rolls in it. Cheap, yet effective. I wouldn’t be surprised if it was actually manufactured by the Angel Soft or White Cloud people, but packaged as Walmart’s store brand. It’s no triple quilted Ultra Supreme TP, but still effective.
Coffee / Wine
Um. With an exception for the Trader Joe’s variety, there’s pretty much no $3 wine that’s even drinkable much less anything I would want to serve for guests. Buying a NICE bottle of wine is still a bargain compared to going out and making pre-made cocktails, plus the company is usually better. And isn’t that the point?? - hannonymousAZ
Trader Joe’s makes a great $3 bottle of wine. That’s about the most we spend on wine. Drinking at home is definitely way cheaper than drinking out at a bar or restaurant.
If you are buying $3.00 bottles of wine, you might as well just give up wine. – Dennis C
$3 Buck Chuck. Tastes great, won’t leave your wallet with a hangover. Good thing I don’t have to give up wine since there’s a $3 wine that’s worth drinking!
Please note the number of times you see the phrase or something similar to “To me…” If it is something important to you, the price may be just a number. Perhaps that $10 coffee is the one indulgence you give yourself…perhaps your tools are used more frequently…The last sentence is the most important: may be more cost effective to buy “cheap,” but you need to decide it’s worth for yourself. Don’t buy something just to have it or because it is new. – Tripper
Well said, Tripper. I hope the folks drinking the $10/bag coffee and $10+ bottles of wine choose the more expensive types because they taste far superior to the $3 alternatives, and not because they are afraid their friends might find out they went cheap or they would be embarrassed when snobby acquaintances see a store brand can of coffee in the pantry.
If you have to have the absolute best of everything in life regardless of the price, you’ll likely be working forever and permanently indebted to “the man”. I’m glad Tripper picked up on the nuance of the article – find those things that bring great value to you, and spend a little extra on those areas.
Wine …………….2 Buck Chuck !!!!!! – Heywood Jablowmee
Funny name, funny guy. Serious wine suggestion. I just wish it was still $2 here in North Carolina.
A good tool can last for generations. A cheap tool not so much. Craftsman use to have an unconditional warranty on many of their tools. Now that the money boys have pretty much destroyed the company I have no idea what their policy is. – Onemoretime
Good tip on Craftsman’s lifetime warranty – I’ll have to check that out.
Don’t go cheap on your flat head screwdriver, phillips head or a starter socket set (all of these can be had for under $50 at the Home Despot) because that stuff will fail just when you need it–like when you’re trying to screw in that new cheap-ass door handle and the screws strip on your cheap ass at the same time the handle on your bargain screwdriver comes off in your hand. Purchases that need to be repeated due to shoddy construction or workmanship are anything but a bargain. – Biff
Under $50?? Those things are $3-7 at Harbor Freight! And what are you people doing to your tools to smash and destroy them so often?
Cheap tools = broken knuckles and damaged material, which isn’t so cheap after all is done. – Freedom4all
I’m still not sure how you guys get injured so often on inexpensive tools? And damaged materials?
More accidents happen with cheap tools. Most everyone has experienced this. Where as good tools come with a lifetime warranty, meaning a dutiful owner only need buy one as long as that company is still in business (and that company has a vested interest in ensuring their tool doesn’t break). I have had “generic” screwdriver handles break, cheap shovel or broom handles snap. These situations are dangerous. Again the author favors chancing your health to save money without concern for the likely increase in your cost for healthcare. – Jeff Ray
Snapped broom handles? Seriously? I don’t think I put more than five pounds of force on the broom when I sweep. How can that crack even the flimsiest broom? Amazing.
“More accidents happen with cheap tools. Most everyone has experienced this”? I’m still waiting to suffer calamities from buying inexpensive tools instead of the really good ones. Maybe it will happen some day. As some of my tools approach the 30 year mark, I’m starting to think I’ll be okay after all.
Other interesting and helpful comments
Except that frugality needs to start at the top, not the bottom. IOW, houses, cars, education, vacation… the big things before I start skimping on toothpaste. – RayO
Right on. Housing and cars are usually the top budget items (perhaps after groceries) and are the best place to lock in long term low costs by buying what you need and not a status symbol.
You don’t have to buy cheap toothpaste, saline, tools & wine to save money. Stop buying a $4 cup of coffee every morning and eating lunch out everyday. Paint your own fingernails and mow your own grass. That will save you a LOT more. – Linda
You can actually do both! Buy the cheap hygiene items, tools, and wine to save some money. Then make your own coffee at home and pack a lunch to save even more money! I’ll skip the fingernail painting (and I would advise most guys to skip it as well, though not for monetary reasons). Mowing your own grass is another great way to save money, great exercise, and it can leave your yard in awesome shape since you notice problem areas.
Interesting but not very helpful
Fried farts in garlic are very good too. Very low cost and nutrient filled. – Big D
Thanks Big D. Although I’m not sure they are nutrient filled. The garlic will at least ward off vampires though.
Nothing is cheap any more, everything is very expensive and if you buy cheap stuff in the end it will cost you even more. – Brad J
No, Brad, cheap stuff is still inexpensive, expensive stuff is still expensive. It’s kind of how you define cheap and expensive. At the dollar store for example, it’s all a buck. Sometimes less. That’s cheap.
The water, prescriptions and Cell phone plans are great ways to save, but realistically the other options listed here are a joke, maybe that will save you $20 a month. Not exactly enough to make you financially independent. – Ben
I don’t know – saving $7 by buying a $3 bottle of wine and saving another $5 by buying the store brand coffee can add up to way more than $20 per month unless you hardly touch either one. As for tools, I’ve already saved over $100 this month alone going cheap. I’m way past $20 in savings! You are right in your final thought, Ben. Saving a small amount on the items mentioned in the article won’t make you FI by itself. It takes saving on the big ticket items like houses and cars, making smart tax choices, and investing wisely.
The dollar store or for that matter, Walgreens or even Target, often have house brands made in China. Frankly, I don’t trust putting something in my mouth that was manufactured there. They simply have no standards and there have been a number of cases where materials were adulterated. Look for sales or bulk purchases at Costco and you can stock up on items like toothpaste and save some cash. – Pat R
They have “no standards”? I saw a lot of China-hate and in the comments and randomly picked one to stick on a spit for public display. Look, I love to drape myself in the American flag, too. But just because something is manufactured overseas doesn’t mean they can’t follow standard quality control and quality assurance procedures. The people in China and elsewhere overseas actually have a brain inside their heads and a heart inside their chest. They are just like us here in the states. Don’t let xenophobia block the path to cost efficient shopping.
And the China-hate is really misplaced at times. I pay attention to where things are made, and I rarely see “made in China” on medicine and food items. More common is “Canada”. Tools and manufactured goods do seem to come from China or elsewhere in the Orient, but that’s okay. Those people in China need jobs, too.
Oddly enough, the Chinese have also figured out how to add carbon and a few other elements to iron in order to make steel. They also figured out how to turn the steel into useful objects! These amazing talents lead to reasonably high quality manufactured goods (like cheap tools!) that are very cost competitive with goods of US origin.
The Business Insider and Yahoo! Finance articles sent a lot of traffic this way, which was cool. I hope the tips help people realize that it’s best to go cheap on some purchases if differences in quality don’t make a big difference.
What things do you usually “go cheap” on?