Partially inspired by Me(ghan)’s post.
Am I cheap or frugal? The answer to this question is an ongoing struggle for me as I tend to see myself through other people’s eyes. Of course everyone has their own opinion on how they spend their money but sometimes people have opinions on how others should spend theirs.
I’ve gotten a lot better at understanding what my definition of frugality is. When faced with a decision at Christmas I realized that frugality is spending money I have on things that will make me happy while opting to not spend on things that won’t positively impact my life. For instance ML and I recently attended an event at our local museum. It was to celebrate with his friends and since we have the funds to do this in our fun fund we purchased the tickets. If we didn’t have money in our fun fund or room in the budget we wouldn’t have purchased the tickets. In my mind this is frugal.
I do have to guard myself against cheapness. When I purchased the Deadpool tickets I’ll admit to a pang as I spent $8 more for our tickets than if I had gotten regular tickets. That extra money was available in the budget and helped us have a better day as we weren’t rushing to get to the theatre an hour early to line up to ensure a decent seat. I’m sharing this because I’m insanely proud that I didn’t fall into budget fear with this or keep mentioning to ML that these tickets were more expensive. Knowing that we’d probably want to have something from the concessions I checked the budget and shared with ML that we had $10 available.
Cheap for me is preventing ML from getting popcorn because I don’t want to spend the money, in spite of the fact that it’s available, or not paying the extra $8 for tickets ensuring that we’ll be standing in line for an hour. If we didn’t have the $18 available to us then those wouldn’t have been cheap decisions. Since I did have the money and it was earmarked for date night I think these were frugal choices as in both instances they enhanced our enjoyment of the night.
One technique that has helped me walk the line between frugality and cheapness is putting leftover variable budget money into a fun fund. The money doesn’t go to one of my savings lines or debt payment instead it gets put into a savings line designated for spending. Knowing that this money is going to be spent on something a bit frivolous anyway helps me check my motives when I’m saving money. The added benefit is that it’s a way to treat ourselves to great things without sacrificing our payments.
I think cheap vs. frugal depends a lot on how you rationalize your spending and saving. The summary I like best is that frugal people care about value while cheap people care about cost.
What’s your definition of cheap vs. frugal?