Am I Frugal? How I Balance My Efforts To Spend and Save Money

by Silicon Valley Blogger on 2008-11-1117

How frugal are we? It’s all about how we balance our efforts to spend and save money.

Spending On Stuff You Enjoy

I have weird spending habits. I am one of those people who will spend well for the stuff I *really* like and enjoy while refusing to pay a dime for things I feel that are not necessary, regardless of how cheap they are.

For example, I don’t care about the kind of cars we own. I’m not particular about makes or models, so I’d buy a car that is affordable, functional, clean and with an accident-free history. But interestingly, when it comes to matters of the house, I’m much more finicky, and I find myself spending more of my money towards maintaining a home and environment that I am delighted with.

I’m Still Frugal, I Think

I believe that I’m frugal. I claim that I am because I purchase things based on their reasonable value, and because I feel that I’ve got good self control over my spending tendencies. I only buy the stuff that matters to me when I can afford it, even if it happens to be a bit more costly than average.

The point I’m making here is that frugality isn’t entirely about how great you are about saving money, though a big part of it is certainly that. In my mind, frugality is also about your overall attitude towards money, and the balance between your saving and spending behaviors.

save money, spend, frugality
Balancing Eggs by James Jordan

Spot The Cheapskate: Frugality Profiles

Would you agree that even someone with expensive tastes may still be considered frugal? And can someone who makes cheaper choices still be a spendthrift? I say yes. I believe that how you conduct your spending activities defines whether you’re frugal… or not.

A few examples may show you the difference.

The Big Bargain Hunter: Do you know a self-proclaimed big bargain hunter who enjoys visiting thrift shops, many times every week? Such a person is a packrat and prefers to buy in bulk. She’s almost what you’d call a career shopper and one who believes that she needs to spend in over to save. When stuff goes on sale, she’ll be first in line to claim her merchandise, albeit armed with coupons. The problem is, she’ll buy stuff on sale she may never ever use. She buys stuff because they’re a good deal and may prove useful to her one day.

The Occasional High End Spender: Now what about the fellow who, on the other hand, likes nice watches and decides he’d spend on a Rolex once he saves up enough for it. He waits a year to make that purchase, and makes sure that his watch is insured. He drives a used car and likes to pick up books from the library, while still deciding (after much thought) to surprise his girlfriend with a special gourmet dinner in a fancy restaurant on Valentine’s Day.

The Miser: And finally there’s the kind of person who skips birthdays and other family events so that she won’t have to pay up for any presents. Very fixed in her ways, she only goes to certain discount stores for things she needs and will refuse to go to restaurants, theaters or distant travel locations all because it all costs money. This individual is, no doubt, the most successful and serious saver of all.

So out of all these profiles, who would you call a spendthrift here? A frugalist? A tightwad? Or are they none of that?

I’ll make a call here and say that the bargain hunter is a spendthrift, the miser is a tightwad and well…. the one who occasionally splurges is the frugalist.

Would you agree?

What’s In A Label?

Of course, these are all just terms and labels. But the point I’m making here is that when someone advances the characterization that you’re frugal, it’s actually a compliment (although many people may still use it to mean “cheap” and “stingy”). And conversely, someone may call you a spendthrift, when in fact, you may not be. Just because you decide to splurge on a gaming system this holiday season doesn’t mean you’re not frugal.

I discussed these very same ideas with an older post on the science of money behaviors. I may be splitting hairs at this point, but I hoped to clarify (or argue) that just because someone spends on the good stuff in life, doesn’t mean they should automatically be thought of as a self-indulgent wastrel who deserves to be frowned upon.

Copyright © 2008 The Digerati Life. All Rights Reserved.

{ 15 comments… read them below or add one }

Steward November 11, 2008 at 2:22 pm

I think I tend to think about frugality in terms of how many things I think are essential. Is it enough to have one high quality pair of shoes or do I need 4? Is it enough to have a healthy diet consisting of mostly staple grains, fresh fruit and vegetables, and occasional meat/fish or do I need meat at every meal? Is water enough of a pick me up in the morning or do I need a $1 (or $3) coffee?

I think I see frugal people as requiring less things to make them happy than non-frugal people. The frugal person may spend $250 on a jacket but then he takes care of it and makes it last 10-15 years, being content with the fact that it keeps him warm, dry, and protected from the wind.

Alex and Trevor November 11, 2008 at 10:18 pm

Thank you for making “frugal” look good! I’ve been looking for a way to say it, and you said it perfectly! My husband and I are definitely savers and budgeters, but I’m not averse to the occasional purchase, and I LIVE for my monthly leisure fund. Great post! I’ll have to come back and read more! Aren’t personal finances great? You should visit our personal finance blog sometime, too, when you get a moment! :) http://www.financialnut.com

JP November 12, 2008 at 2:32 am

Being frugal is not just about saving money but also spending money on quality items that will last longer than cheap stuff. I like your blog as you always come up with good suggestions on being frugal.

Jage November 12, 2008 at 3:13 am

I also dont care of the brand of my car, the importance for me is the function.

DES November 12, 2008 at 4:29 am

I see I am frugal but not a tight wad from your descriptions. I love eating out and will go to a nice restaurant, take my sons and their wives and have a high old time. Then I will refuse to pay a toll on a road and find a better back road.

Donny Gamble November 12, 2008 at 9:55 am

It is good to be frugal, but just make sure you enjoy life life because life is too short to be trying to live under your means and trying to save money on everything possible.

Dave Gardner November 12, 2008 at 11:19 am

Excellent post! What’s sad is that most folks (and our schools and our government, as well) consider talking and learning about money as something about as taboo as talking about sex or politics (except during election years!). Our schools don’t teach this information. Is it because the teachers don’t know this any more than anyone else?

I’m a former teacher–and had to move to a different career –insurance sales — before I started to learn about business, the economy, personal finance, and the concepts you present so well here.

As an editor-writer (doing this now), I had once worked as an editor for a Government Auditing (former IRS agents) group. I learned a lot more about finance, budgets, and how to keep decent records.

My wife and I have tried to pass on what we’ve learned to our two kids–it’s still too early to tell (or is it?) whether or not this information “sunk in”.

I hope you don’t mind, but your blog is so well-done that I’ve linked to it from my website attempt to share what I’ve learned about economics and personal finance.

Again, thanks for the great insight and information.

Drew November 12, 2008 at 11:41 am

Personally .. frugality to me is the essence of knowing the value of an object, and paying a good value for that object. An example would be buying a TV. You spend time on reviews and look at research, and purchase it on sale when you know what you want and you have the money (or low cost plan) to pay for it. The person that is not frugal would buy it and put it on their CC and keep the balance for months. The miser would get the TV from the goodwill.

It is all a matter of how much value you derive from something. People call me cheap, frugal, etc. I have a goal and I will stick to it. I spend money, don’t get me wrong, but my savings come first.

Jon November 12, 2008 at 12:54 pm

Being frugal is not all about reaching the finish gate of life with the most money left unspent, is it?
To me, it’s more about making sure that you don’t spend money unnecessarily on things that you don’t really value.
For example, I use coupons and sale flyers to make sure that I get the best bang for my grocery buck. However, I refuse to deprive myself of food I enjoy, merely because it is comparatively more expensive than beans & rice as a steady diet.
I worked as a chef for a long time, so I love to prepare gourmet meals for my family and friends, using quality ingredients. I really hate to spend three to four times the cost of a particular meal at a fancy restaurant when I can prepare the same thing at home and enjoy it with good friends.
The only exception to the rule is regional dishes I can enjoy when I’m traveling or house specialties I can’t quite seem to match at home. Nothing like truly fresh seafood on the coast, or good Southern BBQ!

jim November 12, 2008 at 6:10 pm

I’m the same was as you, for the things I value I’ll spend a fair amount but on things that are ho-hum or day to day? I’ll go as frugal as I can.

Raj November 12, 2008 at 11:11 pm

I definitely tend to spend a fair bit on stuff I like to… especially gadgets. Been spending a lot more since I started my blog on gadgets too. But on stuff I dont like, I’m definitely frugal!

Curious Cat Investing Blog November 13, 2008 at 6:27 pm

Nice post. Frugality is wise. A few more people are seeing that today than did over the last 15 years as consumer debt climbed to over $2.5 Trillion. Occasional splurging is fine as long as it fits within a sensible financial picture.

Noticias Automotivas November 16, 2008 at 6:30 pm

i am exactly like you described yourself!

fathersez December 9, 2008 at 1:47 am

I would consider being called frugal a compliment. Though I have lead a pretty wasteful life (by my own current standards), this has changed since last year.

Now I even wait till Wednesday to see movies. Same movie, same theatre, 33% cheaper.

madeira March 9, 2009 at 4:27 am

I heard someone recently described as a “generous cheapskate” – despite penny-pinching on the day to day stuff, they were always generous to friends and family – nice philosophy

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