This is certainly an animated thread!!!! Here's how I think of my purchases: if what I pay is EXCEEDED by its duration, quality an service, then it's a frugal investment - tools, consumables (hand and machine needles, rotary blades, etc.) and fabric. If I have to spend more to make something work, then it's a waste of time, money and a bust all-around. Extravagant to me, in practice, is paying more for something I buy for someone else that I would not easily justify buying for myself.
I will buy quilting fabric from JoAnn's to make trial blocks/quilts/projects and such, but it has to have a certain minimal thread count. Some things are not meant to have along life (pot holders) or heavy usage, others can be justfiably "pretty-but-expendable."
Now, "CHEAP," that's a different animal altogether to me. I am cheap with scrubbing sponges - I will use one until it's at least have eroded from use.