Frugal is a new word I started hearing in the last 5 years. Before that word became popular, frugal people were lumped together will people that were mostly called cheap.
And this brings me back to my rich friend Jay (I mentioned him in Wealth Tip #2). Now, you might think since he is worth over 7 million dollars, that he would have the best of everything… but he doesn’t!
Perhaps you might hear about his fancy vacations, after all, he’s been to the following places:
- Alaska cruise
- Mexico
- Hawaii
- Ireland
- Las Vegas
What you don’t realize is that he gets most of those vacations from rewards via his credit cards, or through prizes offered from suppliers for buying their product. Even when he is on vacation, Jay and his spouse buys cheap, and even stocks the refrigerator at the resorts they stay in. Yes, during vacation he will play golf, but usually it’s at a cheaper course (golfing is an activity he has picked up during the last 10 years).
He does have newer cars, but they are domestic SUVs that are used for his job. Even though they are typically bought new, he’ll hold onto them for at least 5 years.
Does he tips well? Not really, usually if he likes the service he’ll tip 15%, but if the service is crummy, expect either a 10 or 5% tip (in cases where the service is really bad, no tip at all, but this is rare).
With as cheap as he is with everything, you’d expect him to be cheap with charity too, right? Wrong, he give over 10% of his gross wages to the church, and is generous with his family and friends. Ironically, while he is giving thousands away, sometimes his jeans will have holes in them (albeit small ones and in good taste).
When he does eat out, it’s usually one of the cheaper meals on the menu. I’ve never seen him eat a porterhouse, or New York Stripe steak.
So, what have I learned by observing his spending behavior? Being Cheap (or really frugal), is part of the wealth building equation… My friend has increased his lifestyle a little more over the years, but he still lives more frugally than my poorer friends.
If he can do it, then so can I!
I identify a lot with Jay–definitely not he $7 million, but his attitude. He is secure and confident in himself that he doesn’t need to show it off to let other people. For people who don’t have this then it will always be a race to keep ahead of their spending and debts.
Now, the no-tipping thing is a big no-no and here is why. I am assuming that by bad service the server was bad. First, if you are getting bad service you need to immediately ask for a manager to rectify the situation rather than suffer the entire meal in silence and seething anger. Usually, they will comp the entree, offer dessert, offer a coupon for the next visit and immediately replace your server.
Second, you always always always leave at least a 3% to 5% tip no matter how bad your server was because that is the percent garnished from the price of the meal to be shared with the hostess’ and bussers. If you leave nothing and the tab was $100 then you hust made the server pay the restaurant $3 to $5 to wait on you. Not cool at all.
He’s a pretty smart frugal guy, he still mows his own lawn and fixes most things himself.
Yep, I agree on the tipping part… Sometimes when we all go out to eat, I’ll feign that I forgot something back at the table, and throw a few more dollars in his pile for the tip (especially if it’s obvious, and the server was excellent).
He’s a good guy, and I believe it has something to do with the way he was raised (most like his Dad taught him this…) He’s my senior by more than 10 years, so I can’t really school him about it. Perhaps I’ll say something to his daughter (maybe she’s done this already, I noticed he did tip more the last time we had dinner together).
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