The Best Thing My Parents Taught Me

money

Since I could remember, my parents have been frugal. They’re down right cheap. My parents are so cheap that my mom doesn’t like my dad eating at Taco Bell because it’s too expensive. That’s how cheap they are.

The funny part is, my parents aren’t struggling financially. They have a bit more than 6 figures in cash if you combine their bank accounts, stock market accounts, and 401k. They also own a home that is worth around $550,000, which is almost paid off.

My mom has a home daycare that isn’t doing very well because of the recession, but she still pulls in around 4 figures a month in profit. On a monthly basis, my parents don’t spend more than a few grand, including all of their bills and mortgage payment.

From a cash flow perspective, my parents are still saving money, but for some reason they are still cheap. When my dad lost his job a few years ago (he worked in the mortgage industry), they became even cheaper.

What has all this taught me? It is easier to save money than to make it. You can’t always control how much money you make, but you can control what you spend your money on.

If you have frugalness ingrained in your head like my parents do, not only will it help you in the personal world but it will also help you in business.

The main reason I am successful isn’t because I am smart, but it is because I spend the least amount of money possible.

So, if you are not cheap, start learning to become cheap. If you think you are cheap, think again… because you can always save more money.

For example, I think I am cheap. In fact, to not have to pay for furniture, I convinced a lot of my friends to sponsor my new home.

When my mom found out I spent $2,000 on a bed frame, she started yelling at me. She knew  it was on sale and that I got a 10% discount by going through an interior decorator. Best of all, it was free because my friend bought it for me, but that wasn’t enough. She was upset because I didn’t get more for my friend’s money and that I couldn’t convince the store owner to give me a discount.

Hopefully that will inspire you to become frugal and teach you that you can never be cheap enough.

P.S. If you want help growing your business click here.

Comments

  1. Timothy Sykes :

    I can testify to Neils’ overwhelming frugality …somewhat inspirational, somewhat infuriating…you gotta live a little and eye opening experiences like sky diving and L’Arpege (look it up..images preferably) are worth it. But congrats Neil, you are a bigger Jew than most of my Jewish friends and I look forward to attending your Bar Mitzvah where you will probly bring in $50k, maybe even $100k if you webcast it and get sponsors like a responsible SEO Jew would do…seriously…do it…I dare you…shalom my dark brother

  2. Hah, very smart advice Neil. I know your family pretty well, so I can vouch for pretty much everything you’ve said 🙂

    I never budget myself, I buy way too many iPhone apps, drinks at Starbucks, and don’t pay attention to gas prices. I’m sure there are a ton of other things as well.

    • Prostate Problems :

      Keeping track of your expenses and income is one of the most effective frugal living tips. The best way you can do it is by comparing your outflows to your budget and then formulating effective strategies. It sounds simple but it is one of the most difficult things to do.

      • If you haven’t already, read Ramit Sethi’s I Will Teach You to Be Rich. He de-mystifies every modern financial myth and its probably one of the best personal finance books, especially for people from our generation.

        • I have, it’s a fantastic blog and a great read. His books well written too.

        • Prostate Problems :

          I’m good with my money and pretty knowledgeable but am the kind of person who needs a nudge now and again. Ramit gave me that nudge (and some great tips to boot) with this book.

      • Yes, and it can be as simple as writing everything down.

    • What’s the point of paying attention to gas prices? You cannot do anything about them?

      • You can’t, but by paying attention to them, you can prevent the amount of miles you drive. Sometime you perform useless tasks which forces you to drive when you really don’t have to.

      • marcus@how to make money online :

        That is so true. You will continue to drive whether the gas price is $2 or $4 per gallon.

    • Lol! I bet if you stopped the Starbucks alone you’d have a lot of extra cash at the end of each month

    • I was the same since I turned 25 . I met a lot of people with 100k-500k savings and all of them told me to be cheap too.

  3. Prostate Problems :

    A frugal lifestyle is not just concerned with saving money and compromising one’s needs, instead, it is more a decision to simplify your life. It is a complete plan that helps you lead a successful and easy life. Although it sounds very simple, being frugal is not as easy as it sounds. You have to weigh things carefully, make good decisions and be rational no matter what you face.

    Due to tough economic conditions, more and more people are looking to become frugal.

    • People should be fugal no matter what the economic conditions are… Especially when they’re not so good, it’s important to live below your means.

  4. I am proud to say that Neil Patel has bought me many meals. They included In and Out Burger and a low cost Chinese place, but he did buy me meals!

    My favorite though is his moms cooking. I love Neils parents. They are both such exceptionally fine people, who celebrate the simple and most important things in life, friends, simple good food, growing vegetables, and hard work!

    I am honored to have been influenced by these fine people. 🙂

  5. Hahaha, this post was awesome. As Ramit of IWTYTBR says, you must learn to negotiate like an Indian :P!

  6. It’s inspiring, I try to spend as less money as possible, but well I’m a bit influenced by my friends who spend a lot of money (in parties, food, and more).

    • Then you should either avoid hanging out with them or learn to convince them to take care of you. Or you can always go out on a selective type of night.

  7. Its a balance, not having money, or going through periods of decrease income, inherently make you much more cautious and scare you to prepare for rainy days. But at the same time you only live once, and money is meant to be spent. You dont take it with you!

    super awesome

    • You work hard, you play hard… but don’t play hard all the time.

      • marcus@how to make money online :

        I agree Neil. There is nothing wrong with spending your money on things you enjoy, but, you should make that a part of your budget and keep track of it.

        • Prostate Problems :

          Abundant prosperity is available in all areas of your life. It is important that you don’t limit prosperity only to finances. True riches equals much more than money or things.
          Think about the things that you like to spend your time doing;
          the things you enjoy spending your money on;
          the things you love to surround yourself with;
          the things that energise you when you do them;
          the things you like to talk about,
          and the things that you enjoy thinking about.

        • Live below your means is all I’m saying. Go ahead and enjoy, just don’t spend your entire pay check.

  8. I read it through your articles but have to disagree with some of the point behind the idea “being cheap to be rich”, though I agree that it is good to save money for emergency but we have to balance that up with the enjoyment spending the money we earn.

    What I am trying to say is that I enjoy earning money but I also enjoy spending them away … that really make my life wonderful. For those we would like to know how I did it, here is simple tips you can follow. Let say that if you earn $5K per month and you need $3K for your basic leaving then you have $2K left. Remember don’t save all the $2K else your life will be miserable …. you can save half of it and spend half of it on whatever you like, this will make your life wonderful.

    • Learn to save most of it and you’ll be fine. Create goals of things you want to buy or invest in the future.

      • Prostate Problems :

        Webster’s defines frugal as “economy on the use of resources” and cheap as a synonym for “stingy”. Seems a bit biased to me, but I think the bigger difference is that people call themselves frugal and others cheap. my friend is frugal, but his employer, based on my measly paycheck, is definitely cheap.

    • ..or you could invest $2K in something you love to do and others consider it “work”

  9. in my opinion saving money i a good thing but if we save money only for ourselves (including our family) or for the purpose to become rich and rich it is not a good thing, we should give some money from our savings to poor people in our area. i dont say dont buy things for yourself at all but it is better or some times it becomes our duty to help other people instead of buying luxery items.
    And beside this we should not save money for only putting it in bank lockers we should circulate this money by investing it into different business.

    • It’s a fantastic idea to give some of your money to the poor. In fact, I personally donate a lot of money every single month. Always keep in mind, the richer you are, the more you can donate.

  10. It’s totally different situation at my family. I’m the black sheep among my family members (parents and brother) and pretty often I argue to my girlfriend because of my frugality. I even tell my parents what they should or should not buy!
    Don’t know how did I become such. Truth is I’m happy I’m immune to mostly crap advertising offerings…
    But there’s a bad point about being frugal also. I spend too little to build my business. So at this point frugality is evil…

    • Learn to run a business properly, don’t stop yourself from spending money on your business because your frugal, do it if it doesn’t make sense for you to. By being frugal, don’t waste money on extravagant meals, cars, etc.

  11. Wait…I don’t understand the idea of sponsoring.
    Why would someone want to sponsor your home?

  12. My parents had ten kids so a little bit of money had to go a long way. I learned balance from them and to focus on the truly important things in life. It’s not about the things you have, it’s about the love you give. I love them for the lessons they taught me.

    • That’s great! Life’s little lessons have probably taught you well. Use that knowledge through out your business ventures.

  13. Hey Neil, it’s always a pleasure to read your articles. Being cheap is good, but I can’t understand why someone will be cheap, have the money to pay the morgage for his house but still won’t do it!? I suppose keeping this mortgage is just keeping a debt, and you can’t really count that money as your money, as you don’t really fully own the house in case of your parents. Isn’t it better to be cheap on your own money, without any Debt?

  14. Matt Ackerson :

    Sound advice, Neil, and I would add that especially with the advent of the internet, an entrepreneur can minimize costs greatly by working harder to substitute his or her labor for monetary capital. Example: rather than hire a programmer or even outsource a web-based business project, one can hop online, teach himself and be coding in a month or less with a little bit of hard work. It might not be optimum, but I can testify that it works.

    • Exactly. If you have the time to do it, don’t waste your money. In some cases, you’ll have to, but if you can learn, it’s great!

  15. Nice Post

    I think it depends on yourself if you want to be cheap or expensive. We all earn money and spend it and maybe put a bit on the side to save some money. Everyone can cut costs if they want.

    Although if you
    ve got money to spare and are kind of rich, then why not be expensive?

  16. yes, yes…I am a frugal girl BUT…I have found that in my business of making custom wallets, totes & the like, that I like to use the BEST possible materials, yielding the BEST possible creation! More & more I am putting the very BEST (and usually pricier) quality into my work. Of course, I try to get it on SALE! =)

  17. Case @ Internet Marketing :

    Nice story!
    But…
    that attitude may very well be the best way to survive a financial crisis like we have now.
    Besides that, there’s nothing wrong with being frugal. It would have saved many millionaires from getting bankrupt again if they would have taken care of a nest egg.

    • Being frugal in times of prosperity will help you amazingly when times are tough. You’ll have money to invest that no one else has.

  18. I feel the same way. My parents frugality may put me into money problems sometimes. They say things like “we can’t afford to eat healthy” among other things. I think growing up in this type of environment, we tend to be just like them or exactly opposite.

    I have had a negative feeling towards money in which I am still getting over because money was always the deciding factor whether we could do something or not. It leads me to splurge, on good things at least, on food by going to stores like Whole Foods and living like a king.

    • I can totally understand what you mean by that. Look at it this way, if you can live below your means now, you’ll be able to cash out big time when times are tough again.

  19. This post actually made me laugh! Compared to Neil and his family, my family spends a lot! I have tried to cut down on my expenses but it just does not happen.

    Will I be able to save money if I tried. Yes, but that would be a damn difficult job. Oh well, lets see what happens.

    Great article!

  20. I doubt if it’s the best thing. Universe works on law of abundance and law of demand and supply. So all this sounds quiet funny.
    Nevermind, nice to see you post… at last!

    • Save your money and use it to make more money. Most things are just materialistic goods that people get to impress other people.

  21. “The main reason I have been successful in the business world isn’t because I am smart, but it is because I spend the least amount of money as possible.”

    I haven’t had that much smoke blown up my a$$ since President Bush was in office.

    • It’s true… I saved my money during the “good times” so that during this bad economy, I was able to cash in a lot of great deals.

  22. Charles Williams :

    My mom is the EXACT same way. Most of the clothes she owns came from either a thrift store or a garage sale, and there’s absolutely nothing I can do to convince her to buy nicer things for herself. It’s frustrating at times.

    Loved the line, “It is easier to save money than it is to make it.”

    Inspirational. Thanks for sharing, Neil!

  23. Hey Neil, Great post and thanks for being very open!

    I like the idea BUT if all the families start to save and live like that then nobody spends money on holidays, flights, leisure, gambling and even the lottery. If it goes like that then no one will earn anything as no one spends.

    Money only flows from people who are happy to spend that extra money and it comes back to you eventually. There is no point of being the one to hoard all the money and deposit in the bank ONLY.

    I understand that there are certain advantages in being very frugal BUT i feel it is far better to think how to make an additional $1000 using the time you take to save a $1000!

    • Well you need to remember that being frugal is referring to living a life full of entertainment and going out and partying. Not wise business decisions.

  24. I don’t understand what you mean by having other people sponsor your home? Could you elaborate?

  25. You can only save so much, while income potential is unlimited.
    If you make $100k, most you can save is $100k.
    Instead of focusing all of your energy on how to save money – create a very comfortable lifestyle. A lifestyle which allows you to live without regrets, without window shopping. Then freeze this amount. Instead focus all of your energy on how to increase the income. Since you are driving what you live and living where you want to live, you are less likely to blow the cash and get off focus.
    It takes just as much time an energy to create a fortune, as to save a limited amount. Plus you can actually enjoy life.

    • Your life style should have you live well below your means. The lower you can do this, the better of your life will be.

    • Top Search Engine Placement :

      I think that Tim makes a valid point here — that it take the same amount of energy to focus on fortune as on limitation.

      What if you took every single instance when you feel limitation and transformed it into a thought on opportunity and prosperity?

      I think that the result would be that one would feel freer inside, more creative, and start creating more abundance.

      • You can turn almost any feeling of limitation and turn it into an opportunity. It’s the idea of spinning which can help you succeed.

  26. david karapetyan :

    So what are your parents saving all that money for?

    • They were just built in a way to save as much as they possibly can. Whenever they choose to retire, they won’t have lift a finger again.

  27. I’m really convinced that it’s the most efficient way to survive, but I cannot be satisfied with survival all my life. Unfortunately I had to go through survival before, and maybe i will again (cross fingers), but for me life has much more to offers than just survival.

  28. StocksonWallStreet :

    Got to spend money to make money.

    • So thats why you save your money. When times are tough and the economy is hurting, that’s when you should go on an investing spree.

  29. Hi,
    My family (spanish people) is frugal, but not cheap. They have money in the bank too. Money gives you more money and freedom that usually translates in money too.

    There are different things, I know people that goes (with a car) to the cheapest place so they can save 1,2 euros(but spend way more on gas) that is miserable and stupid(how much worth is your time?) .

    Cheap people can’t be rich, they can’t have a lot of money in the bank, but they are poor and miserable in a lot of things. Using your friends for sponsoring your home in my culture is miserable, that’s it, you can pay it yourself, you do it if you can. The richest people I know(their children were my school peers ) focus on giving to others the maximum they can, they are generous, givers and rich in a lot of areas(have a lot of relationships). People give them back.

    Learn this golden rule for receiving you need to give first. Generous people(not cheap on others) receive way more than cheap people.
    Good luck being cheap with your customers. I have known no people that success this way.

    This is different to expending in a stupid way, you know, a Mercedes is technically worse than a Toyota, but some people pay for that. I go to Ikea because what you buy there is as good as if you pay someone to make furniture, We buy high quality food and make our meals ourself, not because it’s cheaper, but because is good for your health, you feel stronger, and tastes good. Oh man, that some people call Mac Donnals “restaurants” this days…
    We travel and go to places where quality/price ratio is good, because we just need a clean and comfort place for resting, we don’t need ass l*ckers in our way.

    Best things in live are not expensive. French are so go in extracting the best for live without expending too much(I’m spanish). In Caribbean a friend said: You go to eat to the places when french flags(the yachts have national flags) are, never go to the american flag sites, american people go to expensive sites and don’t care, they just care about being alone. It’s the same in Europe, french people know the best places of everywhere.

    Sorry for using strong words, but I’m so upset for the “Someone has…” popups that I will never come back here (I’m from hacker news).

    • I’m sorry to hear that, those pop ups give you the ability to see what the other people are currently reading or commenting on.

      • Enjoyed the article, but I agree that the popups are very distracting and a big turn off. The idea behind it is good, but you may want to rethink the execution (location, speed, etc). Or at least let visitors turn it off if they want? It’s come up 25-50 times in the 5 minutes I’ve been on this article page. Hard to concentrate on what I’m reading.

        I’ve just recently started down the path to watching my budget and eliminating unnecessary expenses, and it’s great so far! Feels liberating actually, even though technically more limited. I do think you can over do frugality as some have noted, but it should be much higher in priority than our culture generally places it.

        • Well thanks for the input. Do what ever you think fits your style, but living below your means is the key here.

  30. It also helps that you are Patel…. cheapest bunch of assholes in an already cheap Gujju phenotype….

  31. Is that good? being so cheap, I mean. All my friends will be avoiding me like as though I have the plague.

    Naah.. I don’t think this is for me. I prefer to give an take.

  32. Olexandr Prokhorenko :

    What about “Spend Money to Make Money” principle? There is an idea, that you can’t go too far being too cheap for the community standards which you belong to. And you can’t make big bucks if you don’t think big bucks.

    Whatever, while I really like your point, I should stress on being frugal vs. being cheap. I’m freaking frugal and sometimes it’s painful to learn that I overpaid on something. However, I’d argue on being cheap.

    Thanks for sharing your experience though!

  33. I don’t think Neil is trying to say that we should all be cheap. I think the main message here is that Neil learned (from him parents) to be fiscally responsible. I believe that you get back what you put in, but this doesn’t always have to be money. I have always ran my life, and now my 2 month old business, with the moto: Under Promise and Over Deliver. That might mean that you could do a lot more for your customers, friends, family, and community, without spending more money, but by just doing what you do the best.

    I personally believe that your personal finances are your own business. I have a large network of friends from multi-millionaires to people who still work for minimum wage. When we are together as friends, we are all equal.

    As for giving your money to charities and such, I have always thought that we know where our money can have the most impact. The generous man (or woman) is not the one who gives the most with reflect to their own financial situation, but the one who gives to the area or people where it will go the furthest. On a last note: I am frugal in finding the best deals for business, but once a job is done, I’ll buy the drinks.

    • Well said Chris, and giving to charities is something I dearly believe in. That’s a commitment I hold myself to every single month.

  34. After reading this article, I asked some of my financially well-off friends whether they spend a lot or not. Most of them told me that their parents were really frugal AND the parents yell at them if they spend too much outside.

    All this comes as a shock to me.. maybe the reason why they are well-off is because they dont spend.. It might have nothing to do with them earning a lot more money…

    • Well remember the old rule, you need to spend money to make money… just don’t spend money on items of no value.

  35. For me this post is more funny than inspiring. Why would you take friends’ money when you can do it on your own? Personally I think there are some things which I will value more than money. But got your gist Neil. It does help to be frugal.

  36. CanadaImmigration :

    Neil, If I had this advice two years ago, I could have saved a lot of money. your advice may sound weird to some people, but I can testify that you could lose a lot of money if you are not “cheap” to save on different things. I was making good money two years ago and had handsome cash inflow. So what happened? I spent it lavishly, and ultimately that led to increased expenses and I lost all the profits. If I were “cheap” enough I could have saved a lot of money. Lesson I learned is “Cut off your expenses a much as you can even if your cash inflow increases.” because this is a point when you over confident and incur expenses that are not needed. Now “cheap” is “wise” to me.

    • The best time to save money is when the economy is flourishing. That way when it drops down again, and it always does, you can cash in on some amazing offers.

  37. Russell Peters:

    http://www.youtube.com/watch?v=EKqdIDxoWBE

  38. I’m wondering if I should stretch to buy my family that dream home we really want. It stretches us but at the same time it is priced very low and interest rates are great.

    • When I talk about frugal spending, I’m mainly referring to buying things you don’t need. Buying things that usually doesn’t increase in value. If you found a great deal on a house, by all means, jump on it.

  39. Hi Neil, was waiting for your new post since days. Anyways, here is what I have to say.

    What my dad taught me about money is a slightly different. Well, of course, wisdom is phenomenal. He gifted me books. Sometimes it was ‘Rich Dad Poor Dad’, sometimes it was ‘Think and Grow Rich’. He always told me to enjoy money, otherwise it never comes.

    And he also pressed that big quote in my head ‘A penny saved is a penny earned.’

  40. Dr. Write Debt Off :

    This recession has taught me some severe lessons and Neil you have hit the nail on the head concerning savings. The last twelve or so years have been amazing and many of us thought it would never end. People are learning to be frugal now but I bet you people return to their old ways and eventually FORGET this recession. IT is good to save BUT you also need to resist extreme temptation and dip into the savings when emotions take over and we feel that we deserve a treat. Some people say there is good debt and bad debt but nothing tastes as good as ZERO debt. Owe no man nothing but love!

  41. Chris Peterson :

    The story around the main message made it more interesting & enjoyable for me. However, it is indeed a smart choice to control the expenses as your first priority in terms of business activity.

  42. Camella Cerritos :

    I hope that your parents still enjoy what they worked for and find the time to savor the fruit of their labor.

    As for me, I keep tab on my expenses up to the last cent aside from the fact that there’s a budget that I follow(I list everything that I’ll be spending). That allows me monitor expenses and apply breaks on spending when necessary. But at the same time, I give myself a break…. a reward for all the hardwork if you may.

    And maybe that’s the reason why my savings is next to nothing. 😀

  43. How to Make Quick Money :

    Hey Neil,

    Parents are always like that, they do yell when they see that you are over spending money even we are too big to manage a business of our own.

    I liked the point where you stated that its easier to save money then to earn it. This principal can do wonders if one consider it seriously.

    • It can especially when you have a lot of it, then you can spend it and turn it into even more money 😉

    • Prostate Problems :

      You could definitely say that saving money is your best defense against crises.
      But keep the basics in mind: Saving is the key! Spend less money than you earn and keep something for future use and for unforeseen circumstances.

  44. Great advice, many think to have a succesful business you have to take huge risks since this is what many “guru’s” like to preach but that is actually far from the truth as entrepreneurs seem to be some of the most frugal and make sure that when they do invest money into their business it is with the smallest risk possible because they do a lot of research before hand. Most start-ups that do well are people who reinvest there money and live modestly instead of those who go and buy a lambo with their first 500k.

    • People don’t realize that the money they put into a lambo can be used to make them an additional couple hundred grand.

  45. Jonathan Bennett :

    Living within our means is very important, indeed. On the other hand, I do think it’s important that we don’t become so “frugal minded” that we live in fear of spending money on things we enjoy. For me, I like to spend money on experiences (like fun trips with family and friends). These provide great memories and more fun than buying expensive toys like 60″ televisions and whatnot.

    • Experiences are always much more exciting and more memorable… I agree with you on that.

    • Prostate Problems :

      Indeed, our survivability depends on our desire to make a change for the better so that alone should motivate us to take action now – whether it’s by improving our lifestyles, voting for proponents of sustainability, shunning unsustainable products, etc.

      • Yes, that is exactly true. We strive for a better lifestyle, but it usually ends up making it worse. Focus on wealth building.

  46. Hey Neil, Great post. I tell my clients all of the time that it is easier to save your way to wealth than it is to earn your way if you are busy spending everything that you make. Someone with an average income can save their way to a pretty nice chunk of change if they are just a little mindful of how they spend it.

    • Building wealth is an area in life that most people don’t do. It’s unfortunate really, but it’s just the way most people are programmed to be… spenders.

  47. Oh, and your comment about your mom getting on your dad for eating at taco bell rings true. I would say by far the number one offender in terms of wasted money, is food. I usually find that when I have my clients track their expenses for a few weeks, they are always way over what they thought they spent on food. Usually by at least double. Of course, Taco bell isn’t really a big offender, you can actually eat a full meal for under 3 bucks, can’t vouch for how healthy that would be, but certainly not that bad on the wallet.

    • Fast food isn’t a big offender, but then you need to remember that if you do it too often, it begins to add up.

  48. Negotiation is one of the best way on how to save money.You have to be smart if you want to save.

  49. I remember many years ago reading some advice Marilyn Vos Savant gave to a reader that one’s potential to earn money greatly exceeds one ability to reduce expenses. In other words, you can reduce expenses only to the point that you have them, but your ability to earn money in limitless.

    What’s my point? I’m not sure.

  50. Its good to be cheap, agree, but whats the use of money if you cant spend it?

    • Create wealth, don’t spend money. That way you’ll be able to position yourself to retire early and live comfortable. Not only for yourself, but for you family and children.

  51. HOBO(nickname) :

    Money is the most important?
    (earnings and almost zero spending – miser)
    Or
    Money saving is the most important?
    (earning And spending very carefully)

    The question is why an individual earn money?
    To fulfill wishes And wishes are unlimited.

    Correct choice of wishes And spending with care is what I call savings while earning.

    The most important factors in ones life is:
    Food, Cloth & Home.
    But they are expensive with choices too.

    I say:
    If we live as a most ordinary person, work as The most efficient person And help others, purpose of life is done.

    What say???

    And a quote:
    God made men, men made money.
    (Think about it)

    • That’s the whole purpose behind the saying “live below your means”. This type of philosophy will allow you to build wealth and create more success.

  52. StocksonWallStreet :

    I feel bad your Dad isn’t even allowed Taco Bell.

  53. great post. Thank you. Bootstrapping is a great way to have laser focus on execution and spending early on in the life of a company.

    Money can and does create problems. And it is too easily wasted on non-value added things…

  54. Another Great Blog Post, was very nice of you give your parents that amount of money. Hope your mother’s day center get’s back on track after the recession.

    • It will, there’s no doubt about it. But stuff like that happens all the time, so saving money is important in scenarios like these.

  55. Come on Neil…it’s in your blood to be cheap. You’re Indian bro.

    Just keeping it real. 😀

    • Well what can I say, I’ve been raised to be that way. However, I do truly see this way to be the smartest and most efficient.

  56. Hey Neil…

    that was an interesting post… i spent all my salary on the 10th of every month.. i implementing this i would be able to atleast use the money till the end of the month…

    cheers dude….

  57. I realised that last year after I met a dude actually he was my flatmate for 2 years in London.One of his bank accounts was over 700 000 US dolars.His monthly income was twice mine.But he used to spend less than me.He was just regular hard worker…

    Nice post.I like that you told it straight.It may sound cheap but if one is not cheap there is no way to save any money to start business.

    • He just really understood the concept of living below his means. That’s what separates rich people from wealthy people.

  58. city sylvester :

    What’s up Neil?
    lol. My mom would save half and halfs the free ones they give away every where. The weird part about it was she doesn’t even drink coffee. Frugality dominated the last generation. Great Post.

  59. I have only recently begun to keep track of my out goings and it is amazing how much money can be saved on a daily basis by trying to be cheap. I now account for everything I buy and always ask for discounts, even if I do feel a little cheeky.
    Thanks

  60. This is very important for people to know today — even if you can’t make more money, you can always find more ways to save money. Just found your blog and love what I’m reading here.

    • That’s a great way to put it Alicia…

      If you can’t make more money, just save the money you have. You’ll have more money than you did last month and the month before that.

  61. Christmas Sms :

    Your parents are right on this thing. To save money in present and it will become wealth for you in the future.

  62. The more you save, the more you can invest. Simple as that. I want my money to work for me so I don’t have to “work” for more of it.

  63. Pink Leopard Bikini :

    Hello, I guess this is as good of a place as any to post and let you know. I tried to subscribe to your RSS feed, but when i clicked it I got an error that said “Parse error: syntax error, unexpected T_CONSTANT_ENCAPSED_STRING” followed by other gibberish that scrolled off the screen. I had to force the page to stop loading because it locked up my browser. Just thought you might like to know.

  64. Ajith Edassery :

    Neil,
    Awesome post – I could reflect the same myself. I have been brought up in an environment where eating outside was a luxury and going out for a movie happens on a fixed schedule of once in three months or so.

    The result – I do not spend money on digital stuff, change my cell phone only once in four years… I am trying to enforce all these on my 7 year old but he’s the one who probably spends all that I earn.

    I liked the overall message – saving is the best form of making money.

    • Wow…that’s fantastic. You’re definitely on the right track.

      • well my parents taught me that same mindset too. But when i entered college and started kinda making some money online, then I started to buy a lot of useless stuffs.. hopefully i could control it sooner than later…

        • It takes at least 30 days to create a habit. Learn the power of discipline and stop spending extra money for 30 days. Take it from there..

  65. We Indians, especially gujjus are specially very conservative and dont believe in spending a lot.

    • Hence the phrase “stop being such a guju” lol. Well, you know what… that’s how the process of wealth building begins.

  66. patheon fortius :

    this was ur explaination to all the debate on the about me page.. good one.. i love this..
    cheapness.. is simplicity for me… 🙂

  67. Well there is a quote from Kin Hubbard, I would like to mention here
    “The safest way to double your money is to fold it over once and put it in your pocket”

    And in Japan people use to say,
    “Getting money is like digging with a needle; spending it is like water soaking into sand”

    Of course, If you save a single penny here, it will become two penny there because of accumulation(time factor of money). Well I am not related to Finance, so not much idea of time value of money. 🙂

    But this Saving and Spending is necessary for everyone to learn.

    • Those were great little insights that you’ve added. Spending is just as much of an art as saving, so you’re right on that.

  68. StocksonWallStreet :

    Lol do your parents want their mortgage and all being shared to the world?

  69. I’m good with money but I’m definitely not frugal and I sure as hell would never try and influence people to be.

    I always live by the following:
    – Never spend money that is unnecessary;
    – If you could save money in the near future, then it’s worth the wait;
    – Don’t be afraid to invest _that_ much more money if you get a luxury that’s worth it.
    – Never hold on to the cash without the need.

    I think the last one needs a little bit of an explanation. I’m not telling people to be frivolous and spend all of their money on junk, but don’t be ridiculous and not spend money at all! If you have 200k in the bank, then it’s okay to spend 5k on a new television – you don’t have to leave the money in the bank gaining interest forever and have a small television in the lounge because it’s a ‘luxury’.

    I hope I’m making sense, I have a real problem with explaining myself…

    • Hey your concepts are great. People just blow their money too quickly and easily on things that just aren’t necessary. You don’t have to be extreme, but just don’t be stupid. Making $200k a year doesn’t mean you should buy a 100k car.

  70. Great post Neil. My dad says – learn to distinguish between your ‘needs’ and ‘desires’. That way – you always end up making a wise decision about spending your money. Point taken.

    Any thoughts on where to invest the savings to create more wealth? 🙂 Or is there a strategy to do so that you recommend?

  71. Excellent article Neil – your comments are very appropriate for what is going on with our current economic crisis. Actually, if more people had been living a frugal lifestyle (saving money, not running up huge credit card/housing debt and lived within their means, etc), we would NOT be in the economic crisis that the US is in currently!

    • Well, there are many reasons to why we’re are in the economic crisis, saving money I personally think wouldn’t have made a difference. Many people were led to believe things that weren’t really true.

  72. Nice article! Every now and then I surprisingly find people spending lots of money on nothing. They should read your article!

    • People unfortunately waste a lot of money because they just don’t have that sense of direction to do anything with it.

  73. Thanks for the great article. This reminds of the great episode of South Park where kids teach how to get over with economic crisis (recession) . Its essential to understand the basics of flow of money and faith in economy.

    • Lol, Yes, I’ve seen it. Understanding the basics is VERY important. If you want to make money, you should know about where it comes from and why you’re getting it.

  74. Philippine Stock Exchange :

    i hate being cheap. i think people who can afford it should live it up a little. what’s the point of earning tons of money if you dont enjoy it?

    • Because most people are idiots when it comes to managing money. If you spend all of your money, imagine how difficult your life will be during the next recession. Learn the art of managing your money.

  75. Sometimes it’s the pain that motivates a person… a zero bank account balance may have a bigger impact than thinking about 1 million dollars.

  76. Neil, i think you used a much strong word ‘cheap’ as “if you are not cheap start learning to become cheap”, you should use with a bit respective manners like “try to cut short your spendings”.
    Anyhow, the idea was to teach a lesson which was a nice one.
    Thanks Neil

    • Well either way you interpret it, it basically means just that. I’m glad you understood what I meant regardless.

  77. Top Search Engine Placement :

    Personally, whenever faced with a situation where I want something that seems to be beyond my current income limit, I would love to be able to say freely and confidently:

    “Excellent, a opportunity for growth and an inspiration that will lead me! I am looking forward to seeing how I will make my income grow.”

    …instead of thinking of how I can limit myself.
    Anyway, that is my goal.

    • Right, it’s about spinning your limitation into ideas or concepts upon which you can make something of. “I would love to…” You should!

  78. And one thing my parents were telling to not borrow money when you dont really need them.

    • True, in many cases, you don’t need to start your business in debt if it isn’t required, you know what I mean?

  79. The Magic Of Making Up Review :

    Hello Neil…..holly smokes man this is an active comment board and even more impressive since you seem to comment back for most.

    I am not sure if someone has already commented on this or not as there were just too many to go through but the principles you speak of for saving are right out of “The Millionaire Next Door” by Thomas Stanley. A lot of people are shocked to find that a lot of millionaires are running around in old cars and live in modest homes. This eye opening to a lot of us.

    Thanks for the post!

    • It’s because people realize that it’s not the cars and the life of luxury that make you rich, it’s the wealth you build.

  80. help grow taller :

    Yeeaaa … Your parents are almost the same as my parents in educating children

  81. I always think that money is no fun unless you can spend it on yourself, or on others, whatever. That way you can be rich and happy instead of rich and scared of losing it all.

    • Most people would rather keep themselves from loosing $10,000 than actually going out there and making it. It’s not about being rich than it is about being about building wealth.

  82. I dont belive this respectfully. Making money is easy all it is just a plan.

    I look money like i did with legos you get the instruction book out and the whole process if a pain in the butt but after your done you have the death star lol.

    Anyways i get my views on money from Robert Kiyosaki if you wondering of rich dad poor dad.

  83. Rich people are always cheap. You can’t become rich if you will spend money on everything you like without keeping count of how much you spend. All the rich people I know are incredibly cheap. I am also cheap sometimes and this is the only way I can make savings. This is how I bought my first car.

    • Some rich people are not smart with their money, that’s why the’re rich one year and not the next. It’s about building wealth.

  84. This is what I was trying to say. In order to be rich and to stay rich you have to be cheap sometimes, otherwise you will wake up with all the money gone.

    • Money is easy come and easy go… wealth can last forever… Ideally, you would want to keep your wealth going on for generations to come.

      • People feel the need of self preservation. It doesn’t matter if they already have money that will last for generation to come, they still want more. It’s our nature. We just can’t get enough. We always want to improve although we got to a point when is no need for that anymore.

        • The world is never ending… if you stop growing, the reality is that you’re just dying. You need to keep on pushing no matter what the circumstances are.

  85. Hey Neil,

    I’m Indian as well and balancing my natural frugal cheapness attitude towards money and business has been TOUGH.

    For example, if I need to shell out $500 for a web design project I’m hesitant to do so even though I can afford it with ease. I’ve done very well but when it comes to spending money on my business my cheapness kicks in and it becomes a challenge.

    I’d like to hear your thoughts on spending money on your business balanced with being frugal/cheap from another Indian?

    Thanks man!

    • Shop around and see if you can get it done for 1/2 that amount. Chances are that you can. Don’t just go with the first person you come across. Or if you need to spend ($x) then find partners or investors to help.

      • Hey Neil,

        Yes, that’s exactly what I have been doing and the problem is you get low quality workers who don’t perform well.

        I’ve posted projects on guru, elance, etc and the work is “OK” not much quality to speak of.

        I guess you get what you pay for in life… and being cheap can actually hurt in the business world. Just from my experience…

        • It all depends… cheap is in the sense of what you do with your money, not what you’re worth. Does that make sense?

  86. earth eternal :

    Money is no fun unless you can spend it on yourself.You can live happy with less money.

    • You can, as long as you learn the art of living below your means. People don’t need big houses and fancy cars… you just have to convince yourself to believe it.

      • I totally agree with you Neil. There is no need for a castle or a 1,000,000 $ car. All you need is a home which you feel good in, a car to get where you need to go, to offer a good education to you children and to visit this beautiful world. I don’t understand people how are buying something just because their neighbor has it and they want to prove they are better. This is just stupid.

        • It’s definitely not necessary and surely not smart… especially because the game is about building wealth, not riches.

  87. LilacTreeCreations :

    Neil,

    Stumbled upon your article and just loved it. Each and every word is so true. I am on my way to start a small business and sincerely hope that I will not have to take any loans for it..

    And completely agree where you say that it takes at least 30 days to create a habit and we need to learn the power of discipline and stop spending extra money for 30 days. I have actually spent £150 (I am in UK) less on my credit card last month by avoiding starbucks and suchlikes… I wasn’t ‘cheap’ on any other necessities.
    Will come back to your blog..

    • That’s great! Money management is actually a skill that most people don’t have. It’s a skill that you should continuously work on developing else, you’ll never take yourself to the next level.

  88. neil

    i agree with you on ppretty much everything but not on this!! my folks were just like yours and i think in the long run it hurt them….. i was also like this and i look back and i see that it has held me back not just in business but my personal life also…. you have to spend money to expand and tryin to save a little will just slow you down and mentally slow you down for achieving your real goals

    • You need to realize Sanil, that the money you save and collect is in efforts to build wealth, not riches. The consistency is difficult as is, so the wealth can help you and your family and your grands live an amazing life.

  89. You just have to know how to select good from bad things. And the fastest way in which you can learn something is by learning from someones else’s mistakes.

    • That’s actually the smartest way to learn. You can probably learn faster by your own mistakes… but it’ll cost you.

  90. Health Insurance :

    I try to keep it in perspective. I wouldn’t go as far as to say Im cheap, but I do understand VALUE I think that is more Important.

    Sometimes being cheap will backfire on you and you end up spending more. If you buy the cheapest thing and it doesn’t work THEN you have to spend more money on the correct solution. you have to learn to buy right the first time.

    I would never buy my friends or family something they could purchase on there own, but were too cheap to. Maybe as a gift or something. I would feel low if I conned a friend into buying me something I could buy just to save a buck. who would want a friend like that?

    • It all depends… you don’t really want to “owe” something to someone you go out with all the time. Keep the gift giving to rare occasions.

  91. most parents of our generation are like that. and you know what when i think about it most of the time it makes sense. like when your moms says not to eat at fast food place. i mean once in a while is ok but if you eat at a fast food place once a day you are spending about at least $150 a month. and the thing is you are not eating healthy either. but if you take that $150 and go for a grocery shopping, i bet you can buy good healthy food that can sustain you for many more mils than just 30 burger. so in a sense its not always being cheap its just being realistic and thinking ahead.

  92. lung cancer survival rate :

    Fast food is always not healthy, take more vegetables and cut down meat meal. Think about it, save cost and healthy. 🙂

    • This is true and ideally what most of try to do. It’s unfortunate that America is still fat even though they understand what it takes to be skinny. Especially with information on weight loss and health at their fingertips.

  93. i guess, its time to be a cheap man. 😀

    • The best time to start is right now. There’s nothing wrong with a frugal life style. You’ll end up in a better financial position than 99% of the people you know.

  94. lung cancer survival rate :

    yup…especially compare prices around before really get one…:)

  95. PCB Layout Services :

    Control your spending daily might help. Budget it and you will cut down heavy meal then 🙂

    • There are several changes you can make throughout your lifestyle that will help you save a lot of money. Use sites like http://mint.com to help you budget everything out.

  96. Being cheap saves you money but its sad. Haggling for discounts and all are the most annoying things that I have to do. Also, from one of your posts Neil, if you live to spend, you are more motivated to earn more.. right?

    • Well if you become a natural at it, then you won’t focus on the whole “haggling” aspect of it. It becomes an automatic move.

  97. Denim Leggings :

    Best thing that my parents taught me was not to steal – anything at any occasion. And I never stole anything. They did not convinced or forced me to do that. I just took it from their behavior. Their live was a pattern for me so no I would not think of stealing anything at all.

    • Well that’s great, but not stealing should be common sense for EVERYONE… stealing is wrong no matter what. Glad you were committed to it.

  98. Jay Jalodomisa :

    Hey Neil,

    I think another reason for this is because you’re a “Patel” (your other blog post I just read)

    In a recent survey that Eben Pagan (DYD) talks about he says that 97% of high school girls said their favorite hobby is shopping.

    DUH! No wonder most of the country is flat broke. They spend money on superficial junk that’ll never bring real happiness and will only cause poverty.

    Sincerely,
    Jay Jalodomisa

    • Well that’s an interesting statistic and I can see how that’s true… It’s unfortunate that they are led to believe as that begin the most important topic….sad really.

  99. You are also smart Neil. From where you find the ideas to write your articles?

    • I just kind of get them randomly through the days or weeks…while I have conversations with other people especially!

  100. That’s so similar with my parents did. Sometime ago, I needed to buy an expensive stuff since I really need that. However, my mom was really upset to see what I did although I paid it myself. 🙁

  101. Yeah… sometimes parents are like that and they have reason to be. Sometimes we spend money on things only an experienced person can see and classify as dumb or a waste of money.

  102. this is a great concept to teach those who are not willing to save, but for those of us who have a steady cash flow and are able to save, i suggest spend and be happy, because who knows? mybe you might not wake up tomorrow, carpe diem!

    • I agree seize the day, but don’t go spending money left and right. Be smart with your money and spend it wisely. You don’t want to think like today is your last because if you do, you’ll blow all your money and be screwed tomorrow. 😉

  103. Ha ha. Your parents sound like mine. Unfortunately their outlook on spending money lead me to do totally the opposite but I do have to say their way is the best way.

  104. haha, our Singaporean shopping motto is “cheap, cheap, good, good, last long, long”

  105. sell textbooks :

    I have been forced to be frugal as I was out for work for some time and unemployment doesn’t pay the bills. I was able to be frugal and get my monthly spending down to 1,000 a month including my bills. Not that I have been working I have kept the same frugal mindset and it has helped me to save for things better than I could have imagined.

    • Wow, that’s quite impressive! Just try to keep that habit going on for the long run.

      • sell textbooks :

        I am glad to say that as of now I have been able to stick to that budget and get some debt paid off while saving money. Unemployment was a hassle but well worth the life experience!

  106. When it comes to frugal I am probably close to the top of the list. I am always looking to save. I love deals…. I am huge on deals. Deals get me really excited and I love getting free stuff. My GF does not understand me. I have decent money but I keep myself on this very low budget. My bank account it always growing so that is a good thing.

    I think the best part about being frugal is when something breaks or you need something new you can spend the money on it without it stressing you out that you cannot meet some bills. Of course I will always look for the best deal. : )

    Frugal can be my middle name. lol

    • lol yes very true, but purchasing too many deals doesn’t necessarily make you frugal, just keep that in mind. Go with what you need.

  107. “So cheap that I convinced a lot of my friends to sponsor my new home; this way I wouldn’t have to pay for any of the furniture..”

    Huh?

    You got your friend to buy your bedframe…?

    I’m not sure why anyone should admire that. Living within your means is a concept I get. Not sure though, how what you’re describing does not classify you as a user…

    ps
    What are you defining as the primary difference between “riches” and “wealth”?

    • I see rich and wealth being roughly the same thing. You don’t have to have a hundred million dollars, but just enough to be happy and not have to worry about paying your mortgage or paying bills if you lost your job.

  108. Abdi Mohammed :

    My parents definietly did teach me a few things about money – some things were obvious but others less so and I picked up naturally. Even today, my wife teases me by saying ‘you’re like your mum’ when it comes to financial matters and being frugal!

    Great article!

  109. Web Design LA :

    Saving is really important in today’s world. As our parents has saved so we are able to see this world more beautifully and we are able to enjoy all the things.

  110. sell textbooks :

    Its good that your parents were smart enough to teach you those things early. Some kids never get the silver spoon out of their mouth. It is kinda sad.

    • I never got the silver spoon, but for certain things, I was definitely fortunate. Some kids don’t get it, which does suck, but if you can help your kids with it, great!

  111. I am an Indian and I know that frugality takes a whole new level when it comes to me and my parents. 😛

  112. Actually I don’t think it is a good thing to be born with a silver spoon in their mouth. I’d rather to be born in a middle class family and fight my way to upper class.

  113. My parents always taught
    life is hard, son, father and your mother does not have a legacy to be distributed to you. So, learn who diligently so that it can be successful

  114. desentupidora curitiba :

    Hey there! This post could not be written any better! Reading through this post reminds me of my previous room mate!
    He always kept talking about this. I will forward this post to him.
    Fairly certain he will have a good read. Thank
    you for sharing!

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