May 30th, 2007

Sometimes the line between what is frugal and what is just plain cheap can be a fine one. In fact, many people use the terms interchangeably. In actuality, being frugal and being cheap are quite different. Frugal means that you’re being economical and avoiding waste. Cheap is…well, how about embarrassingly stingy? How can you know when you’ve taken your frugality into the dreaded realm of cheapness? Here are a few examples to help you know whether you’ve crossed the line.

1. Price Over Quality: The biggest cheapness mistake many make is placing the price tag over quality in priority. Often the cheapest items aren’t always the best value in the long run. Cheaply made items often wear out or break faster than those that might cost a little more initially. Frugal people realize that sometime the extra money is worth it for better quality, but cheap people can only see the initial investment they will have to make. You don’t want to buy the cheapest pair of pants only to have them to fall apart at an early and inopportune time. An investment in a quality pair of pants at a bargain price is a much better option in the long run.
2. Spending Time to Save Money: There are times when hunting down a bargain can be worth the time spent chasing it, and this activity can be fun. But cheap people will often go out of their way just to save a few pennies. Take this for example: One store has an item you want to buy which is listed at $19.99. Another store, 20 minutes out of your way has the same item at $18.99. Cheap people are often so blinded by the opportunity to save a dollar that they forget that the time they spend chasing the bargain may not add up in the end. Don’t get so caught up in saving small amounts of money that it eats up time you could be spending with family or doing something you enjoy.
3. Depriving Yourself of Experiences: So you have a once in a lifetime chance to do something you’ve always wanted to do, but it doesn’t come without a cost. Should you spend the money for the experience? Cheap people often cheat themselves out of great experiences because they are so worried about the cost. They’d rather miss out than take the risk. Frugal people realize that something that will make your life better overall may be worth the expense - especially if it’s on sale! So if your all-time favorite band is reuniting for a tour and you have a chance to go - do it! The value of the experience will outweigh the cost in the end, especially if you can get the tickets for free.
4. Paying for Savings with Other People’s Money: How you act when you’re eating out can be a big indicator of cheapness. A cheap person will order an $8 meal and when the bill comes only pay $8 leaving the cost of tax and tip for the other diners. True frugality should never come at the cost of your friends and family. Saving money isn’t worth damaging relationships. If you consistently don’t pay your share you might not be invited to eat out again!
5. Going to Bizarre Extremes to Save: If you spend your evenings unrolling and separating two ply toilet paper and re-rolling into one ply rolls you might be taking your money saving a little too far. That might seem like an extreme example, but I can guarantee that at least one person out there is guilty of this practice. Some things are worth the effort and some are not. If you’re going completely out of your way to save money and act in ways that others might consider a little unhealthy, you’re probably being more cheap than frugal.
6. Taking More Than Your Share: All those ketchup packets and napkins at restaurants are there for the taking right? Why not fill your pockets with them on your way out? Sound like something you’ve done? Unfortunately, this isn’t really frugal so much as cheap (not to mention a little tacky). Businesses put out condiments and napkins for use while in the establishment - not to take home with you. Don’t take more than your share just to save a few bucks over the course of the year.
7. Bargain or Rip off? Switching the price tags on an item at a yard sale might get you a better deal but at what cost? Cheap people are often so focused on bargain hunting that they forget the people they’re hurting in their quest for a deal. Don’t forego morals for saving money. Frugality is something that you do for yourself to save money, not something that you do to someone else to save money.
8. Offering Favors and Expecting Repayment: So you’ve offered to give your friend a ride to the airport as a favor. Once you arrive you turn to your friend and ask them for some money for gas. Now, there are situations when expecting payment for giving someone a ride would be acceptable - even between friends - but if you’ve offered yourself as a chauffeur you shouldn’t expect to be paid back for this favor. Even with high prices for gas this is a mark of someone being more cheap than frugal.
9. Cheap Food Over Healthy Food: I will be the first to admit that the prices of healthier foods are often much more than that of less healthy alternatives. One dollar can buy you two apples or 10 packs of ramen noodles. You can get more meals out of the ramen, but at what cost? Cheap people often can’t look beyond the cost of healthier foods to see the long-term benefits. Frugal people know that there are ways to eat healthy and still save money. Shopping at farmer’s markets or starting your own garden can be a way to eat fruits and vegetables, save money, and still maintain your quality of life.
10. Not Leaving a Tip: Not leaving a wonderful waiter or waitress a tip on your credit card after dining might save you money, but it isn’t something that should distinguish you as a frugal person. In fact, it’s just plain cheap. It’s understandable to leave a small tip for service that is horrible, but if a service person has done their best to make your experience enjoyable you should tip them accordingly. Service people often make a majority of their income on tips alone, and penny pinching to the degree that you’re not leaving a tip might help you, but it also hurts someone else.
11. Saving Food from Buffets: If you stuff your pockets and your face at a buffet, you’re a cheapskate. If you want something to take home with you, order a large entree and take home what you don’t eat. Buffets may operate on the principle of all you can eat but that "rule" applies while you’re actually in the establishment. If it were ok to take food home from the buffet you wouldn’t need to hide your activities. If you have to sneak around to save money, you’re probably not being frugal.
12. Being Cheap on a Date: There is a fine line to walk when dating if you don’t want to be considered cheap. If you invite someone out to a fancy dinner (who is not just a friend) and then expect him or her to pay there’s probably a pretty good chance that you’ll be considered cheap and/or rude. It may not be fair, but in all honesty it’s the way things are. And once you’re considered cheap your chances of a second date might be out the window. But frugal people know that there are many free or inexpensive date options that won’t make you look cheap. Art galleries, public parks, or even a home packed picnic can make for romantic and inexpensive dates.
13. Lying About Age: Lying about your child’s age to get a cheaper admission to a movie or to let them eat off of the kid’s menu might save you money, but it isn’t really frugal. It’s dishonest, and it also teaches your child that it’s ok to lie when it’s to your advantage. If you want to save money on movies, go to the library or a discount theater instead of taking advantage of the fact that your child can pass for a younger age.
14. Sweltering in the Summer or Freezing in the Winter: Programmable thermostats are a great way to save money and energy as you can raise or lower the temperature in your house based on your needs, but sometimes frugal energy conservation becomes a cheapness obsession. Should you wear your coat indoors just to keep yourself from shivering in winter? Saving money and energy is a noble goal, but it shouldn’t make your home life miserable.
15. Buying Junk Cause It’s Cheap: Buying cheap things simply because they are cheap isn’t frugality. Cheap people often make the mistake of buying things they don’t need because they are getting a bargain. Stores are often set up around this principle, with large bins of cheap items near checkout areas to entice you to buy impulsively. But unless you already intended to buy these things (and who doesn’t have a dozen plastic coconut shaped glasses on their list?) the long term advantage of the savings is lost.
16. Making Big Purchases Based on Price: If you were going to drop a large amount of money on something you’d want to get the most value for your dollar right? Cheap people often forget that with big purchases the price tag can be deceptive. They buy the cheapest car or refrigerator, and they don’t pay for the extended warranty. The problem with this is that repairs on large items can often be more costly than simply buying a nicer product in the first place. Frugal people know that buying expensive things should be the result of careful research and shopping around to figure out what the best product will be for them. The cheapest price initially may not always be the least expensive purchase in the long run.
17. Not Giving to Charity: Being frugal isn’t about being a miser. Cheap people often make this mistake and save their money to the point of being selfish. For however little you have, there is inevitably someone who has less. Part of being frugal is making the most of every dollar you have both for yourself and for others. And being generous doesn’t mean giving your expired food or worn out clothes to the poor - that’s steal a cheapskate move. You don’t have to give a ton but what you give should be something you’d be willing to receive yourself. Plus, you can deduct donations from your taxes - but only if they’re in good shape.
18. Extending Cheapness to Guests: Most people treat guests to their home better than they treat themselves. Yet there are cheap people out there who will spare every expensive to make guests uncomfortable. Offering someone tea made with a reused tea bag or restricting overnight guests to five-minute showers takes your saving to the extreme. Frugal people can be flexible with their habits and realize that guests may not always want to live the way they do. While there is a certain amount of adjustment required when you stay at someone else’s house, expectations that impose on the comfort and enjoyment of others isn’t what being frugal is about.
19. Not Spending Money When the Need Exists: There are times when money simply must be spent. Cheap people often put off these expenses at the risk of their personal safety or health. They would rather drive around a car with a broken part than pay to have it fixed. They ignore the risk that the broken part poses in order to save money. But frugal people know that sometimes in order to save money in the long run you have to pay for things now. Don’t be afraid to pay for repairs or maintenance on items that you use frequently.
20. Never Indulging: Being frugal isn’t about always denying yourself. The true frugalist knows that every now and again a little indulgence is worth the cost. (And if you place the charge on your cash back card, you reward yourself on your balance sheet as well.) Cheapness is often the result of refusing even the smallest treat, even when it could lift your mood or make your life easier. Don’t be afraid to give yourself a break every once in awhile.
21. Denying Needs: People often make the mistake of denying themselves important needs in the name of saving money. If it’s 100 degrees outside and you start getting dehydrated with no drinking fountains in sight, it might behoove you to purchase a bottle of water before you keel over. If you’ve been coughing for the last 2 months with no end in sight, suck it up and pay for the visit to the doctor. Ignoring personal health issues isn’t frugal it’s just silly and potentially dangerous.

So what is the difference between being frugal and being cheap? Frugality is about more than just saving money. It’s about using money wisely as a means to greater happiness. When saving money starts to affect your life negatively, then you might have crossed the line into the cheapness realm. While cheapness might seem humorous at times, some cheap activities might cost you more in the long run.

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This entry was posted on Wednesday, May 30th, 2007 at 9:12 am and is filed under Features.