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Cheap Talk

Richard Quinn

I’M FASCINATED by frugality. Being frugal is not the same as being cheap, though—based on what I read about some people who claim frugality—it sounds to me like they are indeed being cheap.

We’re told frugality adds to the quality of life, that it creates a less stressful, less materialistic existence. Being frugal is fine, but living frugally because it’s a necessity—especially in retirement—not so much. Is a minimalist lifestyle all that satisfying?

I think being frugal is a misnomer. What we actually mean is being prudent with our money, living within our means, and not being extravagant or wasteful. In the end, the money we claim to be saving as a result of our frugality is going to be spent in some way. If you choose to live frugally, should there be a purpose, a long-term goal? If not, why do it in the absence of financial necessity?

It all boils down to my simple formula: Take your after-tax income, save what you need for a secure future, never carry a credit card balance and spend what’s left of your pay in any way you like.

When I shop for coffee K-cups, I only buy those on sale, even if they aren’t my favorite brand. I’m not paying $10 for 10 cups of coffee. Am I frugal? I rarely buy from Omaha Steaks. But if there’s a so-called sale, I might. Is that frugal?

I’m thinking neither is frugal. Why buy K-cups except for convenience? Similarly, I could buy beef less expensively if it wasn’t shipped from Nebraska.

My grandfather removed every piece of tinsel from the Christmas tree, placed it in a box, and used it year after year. I never heard him use the word frugal. It was more like, don’t waste anything. In my grandparents’ day, that’s how most people lived—waste not, want not.

There’s a no-name, cash-only gas station near me. It always has a line of cars waiting for gas. Sometimes, they call the police for traffic control. What amazes me is that the line of cars includes many BMWs, Mercedes, Porsches and similar cars. Do we call that frugality—saving 20 cents a gallon when you own a car that requires premium gas? Not in my book.

I recently read a discussion about a leather chair that had torn arms and seat, so the stuffing was falling out. The question was, have it repaired, throw it out or simply use a slipcover? Slipcover was the frugal choice. I can just hear that discussion in my house. “It’s not that bad, hon, just put a slipcover on it.” My wife’s response: “Get the car, we’re going shopping.”

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There are those who see frugality as a challenge, even if it isn’t a necessary one. Others see it as some kind of badge of honor—I can live more cheaply than you can. That’s fun?

Some people retire really early, expecting to live on their investments for the next 40 or 50 years. To do so, they apply the frugality strategy. Is it worth the tradeoff? Others see frugality as a way to slow down, to live simply on less money. Or are they simply living within their means?

Buying used toys and clothes for your kids’ presents seems extreme to me. My preference would be buying fewer but new gifts. Shopping in thrift shops, cutting your own hair and spending hours looking for deals to save a few dollars may be acceptable to some. But I’ll pass on the Dollar Store canned tuna from a country I’ve never heard of.

On the other hand, I have purchased brand name—and not out of date—snacks for $1 at the Dollar Store. Why not? Why was I in the Dollar Store? It has greeting cards for a dollar. Now, that’s a bargain.

True, when I’m walking down the supermarket aisles, I keep an eye out for sales. But that also means I buy stuff I don’t really need. I have frequent shopper apps on my phone that I use, but I’m not spending hours clipping coupons.

I received an e-mail from a frugal aficionado. In part it read, “You spend less money, so you have more money and you dont have to stress about money because you dont need very much of it in order to live the good life, but hey, you have more of it anyway!” There’s a logic in there, I suppose—but I’m still looking. I’m thinking the good life is in the eye of the beholder.

It all boils down to balance. Neither extreme frugality nor extravagance is desirable. Neither brings true happiness in my book.

Richard Quinn blogs at QuinnsCommentary.net. Before retiring in 2010, Dick was a compensation and benefits executive. Follow him on Twitter @QuinnsComments and check out his earlier articles.

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Peter Blanchette
Peter Blanchette
9 months ago

According to the STATISTA GLOBAL CONSUMER SURVEY, drinking 2 to 3 cups of coffee for 44% of adults a day is the most common. 365 days times 2.5 times $1.00 is $912.50 per year or $76 per month. For many people, those not living on SS alone, that is frugal(per Merriam-Webster….economical, thrifty) as compared to buying coffee at Starbucks. Frugality depends on the context of the situaton.

Rick
Rick
9 months ago

Perfect!

Dwayne 73
Dwayne 73
9 months ago

I think that being frugal is trying to get a good value for your money and only buying what you need. Buying something on sale just increases the value because it cost less. Being cheap is when you can afford to pay more but are only concern about price over quality because you are in love with your money. Buying as cheap as you can when you can’t afford things could be called frugal or just plain poor. Some people are just poor for whatever reason. Buying things that you need on sale is just smart whether poor frugal.
When I was young I used to buy discounted jeans and shirts because I wrecked so many on my job. As I earned more, I could afford to buy more expensive clothes. I have some LL Bean flannel shirts that I have worn once a week all winter long for over 20 years before I wear holes in them. That value comes at a price. In retirement I have more time to shop the discount stores again. I can get name brand clothes for 10% to 40% of the original price. I do not need my clothes to last longer than I will live. So does that make me cheap or frugal? I rather spend my money elsewhere. Being that I go out and leave 20-25% tips, I consider my self frugal, not cheap.

Chazooo
Chazooo
9 months ago

“One man’s trash is another man’s treasure” seems applicable as far as differentiating the Cheap from the Frugal.

Lynne
Lynne
9 months ago

I’d forgotten about carefully removing tinsel from the Christmas tree and saving it for next year! As a child, I just thought it was something you do, like we saved the Christmas ornaments and lights. As an adult, I haven’t used tinsel for years because, although beautiful, it can harm cats who are intrigued by it and try to eat it.

Tooney
Tooney
9 months ago

Good article. Thanks for sharing. And thanks for the tip about greeting cards for $1 at Dollar Store. I’ll have to check that out.

medhat
medhat
9 months ago

Thanks Richard. I’d add an observation. Being frugal is immensely easier when it’s done as a volitional choice, ie you had the means to make another choice. Referencing the Dollar Store example, there are many for whom that’s the only place where they can afford to shop. I don’t think the view this forced frugality as a virtue.

Brent Wilson
Brent Wilson
9 months ago

My wife and I take our “after-tax income, save what we need for a secure future, and never carry a credit card balance.” The problem, at least from my 37-year old perspective, is that I’m just not sure what we’ll need for a secure future.

Today we are on track financially, assuming we remain in good health and continue to work, save, and invest. But that is a big assumption. Any number of issues could crop up like long-term health issues, elder care for parents, extended support of dependents, divorce, poor investment returns, etc. and set us back years in reaching our long-term financial goals.

I completely agree that spending vs saving is a balancing act, and this balance is personal. For me, every purchase today means less money to invest for our future. The less money we invest today, the longer it will take us to amass enough money to retire. That’s why we choose to prioritize adding to our investments even when we could afford to use this money for other things today. The ultimate challenge for us is figuring out what purchases today are worth sacrificing our future time.

R Quinn
R Quinn
9 months ago
Reply to  Brent Wilson

Nobody can know the future, stuff happens. All you can do is keep plugging along and do the best you can. Stretch your saving to at least 15% of income. Always grab any employer money available. Look for extra saving opportunities, perhaps a tax refund or OT money. My wife and I forced ourselves to live on one income.

If you have stretched to save I wouldn’t feel guilty about any spending.

Tooney
Tooney
9 months ago
Reply to  R Quinn

Your tip about a couple living on one income is very important. We did the same, especially when it came to housing/mortage costs. For a two-income family, having the financial ability to pay housing costs if one chooses or has to give up a job is a wonderful sense of freedom and flexibility, even if both keep working.

Tinted Life
Tinted Life
9 months ago

The distinction between frugal and cheap is a slippery slope. I enjoyed your article, thank you for sharing.

wtfwjtd
wtfwjtd
9 months ago

I think the context of the buying decision is important for distinguishing frugal vs. cheap. For example, if I buy an inexpensive tool from the local discount tool store for a one-time, DIY job and it works well for that, I’m being frugal. OTOH, if I’m a contractor who always buys the least expensive (i.e., cheapest) tool I can find, expecting it to last for several jobs and then complaining on social media about how that tool didn’t last nearly as long as a name brand, high-quality (higher-priced) tool, I’m being cheap (and running my ignorance up a flagpole in the process). Yes, context is important.

Jerry Pinkard
Jerry Pinkard
9 months ago

I like your statement “Take your after-tax income, save what you need for a secure future, never carry a credit card balance and spend what’s left of your pay in any way you like.”
That gives us a lot of leeway in how we spend our money and the frugality we use, but it is very good guidance.
I enjoy Starbucks coffee and buy pastries from Panera or local bakeries, even though I can get them cheaper at the grocery store (but not as good). We all make choices that some consider splurging.
My parents grew up in the depression and we were a blue collar family. My parents practiced frugality in many ways: DIY home repairs, DIY car repairs, we rarely ate out and when we did it was usually fast food, we lived in town but still had a vegetable garden and mother canned lots of food for winter (I still have unpleasant memories of stringing green beans), my weekly allowance was meager and I earned spending money doing odd jobs and mowing lawns. That was the way it was in the 50s and 60s where I grew up. I think it was a great way to grow up.

Jo Bo
Jo Bo
9 months ago

I agree about striking a balance whenever possible.

Your piece triggered a lot of memories — I was the designated tinsel saver as a child for my family. But by then (late 1960’s) eco-consciousness was dawning and also I viewed this as sensible in a world of limited resources.

Frugality can sometimes create its own sense of inner balance. Am I possibly the only reader of this site that de-stresses by darning socks and mending clothes? Or in using the same cookware my grandmother used? These contribute greatly to a sense of well-being and self-reliance.

Paula Karabelias
Paula Karabelias
9 months ago
Reply to  Jo Bo

No, you are not the only reader who mends clothes , darn socks and uses cookware handed down! All are very high quality , so worth maintaining . I also remember saving tinsel as a child – I had forgotten about that until this excellent essay.

R Quinn
R Quinn
9 months ago

My grandmother saved and reused aluminum foil too.

R Quinn
R Quinn
9 months ago
Reply to  Jo Bo

I’m thinking maybe you have us all on the darning socks which, of course, is frugality itself. We have some old cookware, but not two generations. I do have a Christmas ornament that was my great grandmothers from the 1890s though. 😁

Harry Crawford
Harry Crawford
9 months ago
Reply to  R Quinn

I darn my socks and my wife goes bananas. She says we can afford to buy socks. I say I will buy new socks when mine are past darning to save them.

Bob G
Bob G
9 months ago

I would change the quote slightly to fit my philosophy: You spend less money on what you need, so you have more money for what you want.” I’m a “Car Guy”, so you’ll see me in line at Costco buying premium gas (which I need) in my BMW (which I want). By the way, it’s “Top Tier” gas at a discount plus 3% back on the Costco Visa card.

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