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.”

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 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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