Benefits Of Being A Cheapskate

August 5, 2010

Interview with Jeff Yeager, author of the book The Cheapskate Next Door: The Surprising Secrets of Americans Living Happily Below Their Means

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Mike Carruthers:
People who spend less than they earn and live beneath their means report a higher level of personal happiness. And in fact they often say…

Jeff Yeager:
Sure we could afford to spend more but why would we? It wouldn’t make us any happier.
 

Jeff Yeager, author of the book The Cheapskate Next Door, has studied these people and found…

They live largely debt-free. Only about 5% of them had consumer debt other than a home mortgage. They also tend to be people who are very self-confident, very self reliant but not selfish. On average they gave twice as much to charity as the average American.

Interestingly, these cheapskates do splurge but not so much on stuff as experiences.

 And there’s a lot of social science that shows that object “stuff” tends to disappoint us over time but experiences - that cherished memory - often increases in value over time. The average American has regrets about 80% of the discretionary items that they buy but cheapskates said they regret only about 10% of their purchases. So arguably these are people who are smart about consumption and money and the only thing they’re sacrificing is the stuff normal Americans buy that they later regret.

Yet despite this lower level of spending and consumption these people do seem to be happier.

They’re at least very content but I ask do you stress out and think about money more or less than non-cheapskates you know? 95% of the cheapskates said absolutely we think about it less. 

To hear the complete unedited interview, click here