Frugal is Different Than Cheap
Okay, first things first, before I even get into this I have to clear something up. I am a frugal person, not a cheap person. I have this debate with my friends all the time. Both frugal and cheap people love to save money. However, a frugal person won’t save money at the expense of someone else.
An example, say you are out to dinner with some friends. The bill arrives. A cheap person will simply add up the things they got and pay that, maybe even try and “forget” the drink they had. This, of course, is all at the expense of their friends, leaving them to make up the difference for tax, tip, and the “forgotten” drink.
Continuing with this example. A frugal person would never forget the drink they had with their meal, they would simply wouldn’t order a drink. They know that the same drink can be purchased at the store for a fraction of the price and if they really want to enjoy a drink like that, they will just go to the store tomorrow and get it at the reduced price!
Okay? Does that clear it up? I hope so because this is how my mind works.
How Do You Live Like This?
So how does this translate into my everyday life? It means every purchase is an opportunity to investigate details such as quality, warranty, and of course price. This isn’t restricted to just large purchases, this is also how I approach things as basic as grocery shopping … in case you’re wondering, the answer is no, my wife doesn’t go shopping with me anymore.
Now before you think to yourself, “how can you live like that”, remember, this is how my mind works and I actually enjoy the investigative process of it all.
About Those Large Purchases
Obviously, the financial stakes are higher for purchases over others, such as buying a house over buying a loaf of bread. So when it came to buying our first home, many of my friends believed I would never be able to make such a financial commitment.
For months, I investigated different homes, neighbourhoods, and financial models of how long we would have to own under normal market conditions until owning made more sense than renting … 17 years, in case your wondering. During this phase, I relied heavily on online calculators for things like payments, amortization schedules, and interest saving by altering mortgage terms.
Many different banking sites that offer these free calculators, however, the one that I kept coming back to time and time again was the TrueNorthMortgage.ca calculator. For one, they’re Canadian. Second, I like orange. And finally, banks hate them and I hate banks.
These days, banks are just part of life and for the majority of my life, I’ve dealt with banks. I say majority because I tried the whole money under the mattress thing once, but putting 10000 pennies under my mattress made it uncomfortable. In retrospect, I shouldn’t have taken all my money out in pennies, lesson learned.
Anyway, I’m sure the people that work at banks are trained to be nice to people with millions of dollars. However, they were never that nice to me. Now, I don’t mean that they told me off at the counter or anything, I am talking about small devious type things. You know, high fee chequing accounts and student credit cards that had insanely high credit limits and low-interest rates (until you graduate). Those types of things. Turns out I wasn’t the only one either, BIG BANKS DUPE CUSTOMERS.
So, What About That House?
Okay, so I got off track there. Back to the house hunt. As I said, I spent months pouring over the details of buying a home. Calculating numbers, looking at different homes … More calculations. Then it happened!
We found a place we wanted to buy. Inner city, close to work, close to a grocery store, close to parks, and within our price range. We just needed to be approved for a mortgage.
Despite how terrible the banks usually treat me, I still checked their interest rates and compared them against one another. For the most part their rates didn’t differ much. I also got the sense that choosing a bank for a mortgage is about as technical as throwing a dart at a board. They all seem about the same. However, during this whole process we also learned something about mortgages.
Remember That Online Calculator?
All those months spent on the True North Mortgage website I learned something else besides how much I could save on interest by adding 5 dollars to every payment. I learned that I had more options for getting a mortgage than the old idea of going to your bank.
True North Mortgage is a mortgage broker, meaning, they work to find competitive rates for individuals seeking a loan. This also meant that when my wife and I decided to visit one of their stores in Calgary, we got the sense their agents were working for us to secure the best rates. Not simply, trying to trick us into something that would benefit their shareholders.
Fun Fact! I was once told by a bank manager at one of the major banks, that their only concern was making sure their clients were happy. And who are their clients? Shareholders! Not me. While technically correct, I thought it was an absolute terrible mindset.
This wasn’t the attitude we received from our True North Mortgage agent. She was down to earth, clear, and at no point made us feel like we were tricked or duped into a product that we didn’t need or want. It was simply a conversation about the process and paperwork that was needed to secure a mortgage.
A Frugal Father’s Final Thought
Alright, if you’ve come this far you’ve likely learned two things about me. One, I am a frugal person, NOT CHEAP! Two, I dislike banks because I always feel like someone is trying to trick me into spending more money than I have to, a frugal and cheap persons worst nightmare.
And now that you know that, it should come as no surprise to you that when I needed a mortgage I ended up at True North Mortgage instead of a traditional bank. Because, as their CEO said, “Saving you money is what we do. That is what our clients love about us, and our competitors’ hate .”
Enough said!