There’s frugal and then there’s cheap…

But where do you draw the line?

I think that perhaps there isn’t a defined line between frugal and cheap, but rather it has to do with a person’s perception of things.  For example, a friend of mine lives in a tiny studio apartment.  When her very well-to-do parents come to visit, they stay with her.  In her tiny studio apartment.  Which means that they sleep in her bed and she sleeps on a camping mattress on the floor.  Knowing her parents financial situation, I think they’re being cheap by not staying in a hotel (or taking her up on her offer to put them in a hotel), but they think they’re just being frugal, and I’m sure that some of you reading this will take their side.

I have a group of friends from college who get together at least once a year.  We’ve been doing this since we graduated, and for the most part, we have more money than we did as recent graduates.  But we still treat these trips as we did when we were younger.  We crash at someone’s house, buy cheap snack food and drinks, seek out the cheapest Chinese buffet restaurants (though that’s more about the adventure), and at the end of the weekend, divide up the costs and compare the price to previous weekends.  It’s almost as if it’s a challenge to see who can create the cheapest weekend in their host town (living in D.C., I never win).  Some would say we’re being cheap by not upping the quality of our weekends (“Tickets to something?  But that costs money!”), but we just think of it as being smartly frugal.

My (unemployed) roommate thinks I’m cheap when it comes to groceries.  When I’m putting parmesan cheese onto pasta, I’m happy with the store brand.  Sure, I can taste the difference between the good stuff and the generic stuff, but it’s not so great a difference that I’m willing to spend twice as much.  I think I’m being frugal, she thinks I’m just cheap.  (I also think she would like to be using my expensive cheese, but that’s another story for another day.)

So what are your lines between frugal and cheap?  Bringing your own lunch to work = frugal, bringing your own lunch to a restaurant = cheap?  Where do you stand?

Megan Smith

Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.