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Covered in His Feathers

Be Frugal, but Not Cheap

MONEY MATTERS WITH DR. ANDREW LEE

“Y ou’re such a cheapskate! Penny pincher! Scrooge!” Many of us have either heard these phrases hurled at us or, alternately, have used these phrases when accusing someone else. Few people would want to be labeled as “cheap”—it sounds so insulting. But some would embrace less critical terms like “frugal” or “thrifty” which may often be viewed as a compliment. So what’s the difference between being “cheap” and “frugal?” Personal finance author Ramit Sethi has summarized some insightful ways to distinguish between “cheap” and “frugal”:

1. “Being frugal is saving money. Being cheap is saving

money at the expense of others.” Think of a time when you were out at a restaurant with a group of family or friends, and when the bill came, there was “that person” who kicked in seven dollars to cover his or her $6.99 meal, neglecting to account for taxes and tip. Or how about those people who habitually leave a dollar or two as a “tip” for their restaurant server regardless if the bill totaled ten, twenty, or fifty dollars? Or those who choose to ignore invitations to weddings, showers, or graduations as a great way to save some money by not having to buy a gift? Ouch—let’s not be like these folks. People have long memories regarding cheapskates!

2. “A cheap person saves in any possible scenario, at any cost. Frugal people happily spend money on things

they value.” Cheap people always go with the lowest price on anything, while frugal people cut costs on things that aren’t important to them, while spending freely, even lavishly, on things they care about. It’s simply a matter of knowing what’s important to you and then allocating your financial resources accordingly. Personally, most luxury consumer goods are not high on my list of priorities (I inevitably imagine these items 10 // August 2020

Dr. Andrew Lee is professor of English at Lee University. He also serves as a coordinator for Dave Ramsey’s Financial Peace University. He and his wife Esmerelda have three children.

in my future Yard Sale). However, I highly value experiences and memories, especially with my family and friends. So when we take family trips, we pull out all the stops without pinching pennies because I had already planned these expenditures in advance.

3. “A cheap person values money. A frugal person

values time.” Some people will drive an extra ten or twenty minutes to buy gasoline at the station that sells fuel for a nickel less per gallon, without realizing that the extra time spent and miles driven for this supposed “savings” has cost them much more than they were trying to save. Or they will spend three weeks struggling to fix a leaky sink rather than call a plumber for a fifty-dollar repair. There’s nothing wrong with DIY (do it yourself), but there comes a point when the time expended exceeds the dollar value of money saved.

4. “Cheap people are always trying to get something for free and often feel entitled or act offended or

mistreated when they can’t get something free.” There’s nothing wrong with sometimes asking for a freebie (James 4:2), but to live life expecting not to pay for goods or services that most people are paying for, well, that’s neither realistic nor healthy. Some people believe that if they whine loudly enough and often enough, they can get anything they want. These people should be avoided.

The previous points all boil down to this: “cheap” people think short term while “frugal” people think long term. Frugal people don’t save money just to save money; they have longer term goals like saving for retirement or funding their kids’ college or donating to worthy causes, and they realize that a dollar saved on expenses can help meet their goals. So be frugal, not cheap!