• Zach

Cheap or Frugal, what's the difference?


My financial writing journey really started with this question for myself. I was getting my spending down, maximizing my savings, and I was concerned. I was worried I was becoming a cheapskate. I was worried I was becoming an old friend of mine, who for the sake of propriety we will call Katie.

Katie was the type of person who, on the rare occasions she ate out with a group, would go out of her way not to pay her fair share. The bill always came up short when she ate with us. She wouldn't get a car or rent one or pay for taxis, instead she would only go places when she could snag a ride with her friends, and wouldn't throw in for gas money. She would snag napkins and ketchup packets from restaurants and take them home. I don't know if she went so far as to re-use paper towels, but it wouldn't surprise me. She was cheap in a way that inconvenienced others and showed her lack of caring for them.

Basically, as I was learning more about how to save money, I didn't want to be Katie. A lot of people in the Financial Independence community can get overexcited about their savings rates and go to extreme measures. There's even a show about it called "Extreme Cheapskates". And sometimes it's hard to know where the line between being sensibly frugal and being cheap is.

There are a lot of reasons to cook at home instead of going out to eat. It's usually healthier, it can give you good kitchen skills, and it's usually cheaper as well. But if you never go out with friends to eat to the point that you damage your relationships, and it makes you afraid when you do go out, you may have a problem. It's a great idea to live within your means, but if that means not going to the doctor or dentist when you are having worrying symptoms, that can be the thing that leads to your premature death. If the "Check Engine" light is on in your car, or your tires are getting bald, your decision to save a buck could end up killing you, your passengers, or innocent bystanders who your car hits. Don't let frugality merge into cheapness with decisions that cause you or others unnecessary harm.

One key distinction for me was that when you are cheap, you cut out generosity from your life. To me, this is a bridge too far. Instead of going out to eat, have friends over and cook for them. Or make it a pot luck. Instead of not giving gifts at all, make them gifts of service, like baby sitting for them, or washing their car, something that makes their life better or easier without costing you money. Make sure you connect with friends and even strangers with a generous act fairly often. I like the old Boy Scouts motto of "Do a good turn daily". I think it's a positive way to live that makes the world a better place. And it's not "spend a lot of money on other daily". Doing good doesn't have to be expensive.

Don't get me wrong, there are many benefits to cutting your spending. You can reach financial goals easily, you can put yourself on sounder financial footing, you can be more generous if you have more to give, you can overcome the psychological hold that consumerism has on nearly everyone in our society. But it's a trend that can become an addiction, and sometimes that addiction can damage your health, your relationships, and your mental wellbeing. Don't let the virtue of frugality become the vice of cheapness.

If you liked this post, come join the discussion over at The Happiest Teacher Facebook Group! I would love to have your voice added to the discussion! Also, if you're into that Twitter life, come follow me!

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