Financial Minimalism: Why the Cheapest Option Is Worse than You Think

By Oliver Gudgeon | Friday 24th August, 2018

Earlier this year, I made a purchase that got me thinking. The purchase wasn’t anything special or expensive. It was more of a mundane exercise in gradual kitchenware improvement in the form of a rice cooker (my rice always gets burnt when I use a saucepan). I make most of my necessary spends on Amazon, which happens to be the cheapest place you can find most things. But first, I had a little look in the small independent kitchenware shop, which is about a minute’s walk away from my flat and run by a lovely guy. The cheapest thing that resembled a rice cooker was £20 and it looked crap. So I went back to the flat and had a browse online, which resulted in me buying the cheapest thing Amazon had (for around £15).

Cooking my beautiful, sticky rice, I began to feel a bit bitter about myself. Why did I need to save a fiver for a super cheap rice cooker when a local independent retailer was selling a (probably) good one down the road? I realised I’ve developed a disposition for saving. In my student heyday, I was a stingy customer. I prided myself on being able to find the cheapest pint in town. I made every necessary transaction about conserving my loan and savings. On outings with friends, my decisions on what to eat and drink would be easily made--look for the lowest price and choose that. In short, I was a proud financial minimalist.

But around the time of this purchase, it had been a few months since I had graduated and started work, and I had begun to feel quite differently about spending money. Money was no longer just a number which diminished towards zero before refreshing every three months. I had imagined that my relationship with money would change when I began working, but hadn’t worked out how. I thought that handling finances would mean maintaining a balance between the amount that comes into the bank and the amount that goes out. But there’s more to it than that. Money is more complex than the linear scale of less spending = better.

What I’m talking about here has nothing to do with the old maxim “Buy cheap, buy twice”. Financial minimalism isn’t only about making the smallest possible spends. It’s also about finding the sweet spot where low price and functionality meet. But the problem is, when you economise on every decision, you risk over-thinking and taking the fun out of many activities.

So, work was helping me understand my own spending habits. But I was also beginning to see my spending habits from the perspective of business because I was working in one. As I was learning, having a job means you have an active stake in there being money coming into the business you work for. In my experience of working in hospitality jobs, I’ve come across a few financial minimalists. When I say a few, it really is only a small proportion of customers who will take their time working out the cheapest way of being able to stay. That alone helped me understand how my spending habit sits compared to others’ spending habits. On top of that, every financial minimalist I've faced has kind of not really approached me as a human in their incessant calculations. Instead, they come across as entitled. It’s pretty annoying to deal with people like this, not least because I see myself in them. Being on the other side of financial minimalists has made me realise my own sense of entitlement might even be making me pretty unlikeable.

Now, when I approach a spending decision, I try to be a bit more thoughtful about the process. Rather than always opting for the cheapest option, I’ll buy what I want if the price is fair. Being less fussy about scrimping on everything has helped me get more enjoyment out of the things I spend my money on. I’m not spending more money, in fact I find it easier to take care of my money budgeting by the month. If I have an expensive month, I can then adjust my overall habits accordingly. I make sure I do my saving by deciding whether or not I actually need to buy something, not whether or not I can find it on the super cheap.

Photo Credits: Medium