Be Frugal, Not Cheap.
While focusing on maximising your savings rate and trying to live cheaply, there’s a risk that friends and family may perceive you as being cheap. I believe it’s important to understand the difference between being frugal and being cheap as it can have a big impact on social interactions and lead to resentment.
Being frugal to achieve Financial Independence is a great cause and more should be encouraged to take the journey for themselves. However inevitably we will all have friends and family who are unable or unwilling to cut back on their lifestyle and may begin to view your own lifestyle with resentment.
A perfect example of this which occurred to me recently was when an old school friend wanted to go for a night out in London. This wasn’t a long-lost friend I hadn’t seen in years.. but someone I see fairly regularly and so required no massive night out. I explained to him that I would be happy to hang out, perhaps he could come over mine and we’d have some beers and a BBQ? But he was insistent on wanting to spend £30 traveling and £50 each on a night out in London. Eventually I declined his offer, but I knew I was being frugal.. not being cheap. Being cheap would have been to flat out refuse to meet up with my friend, or to go but expect him to pay for everything.
Saving towards Financial Independence doesn’t mean that you automatically have to decline every offer which would cost money, instead you should seek to enjoy the same activity at a lower cost or suggest alternatives which are equal or more fun. Instead of going out for a fancy restaurant meal – Suggest that everyone comes over to your house where you can make an awesome home-cooked meal. Take everyone out to the beach instead of paying for theme park entry. There’s many alternatives to expensive social activities.. Often you need only suggest them. Humans are creatures of habit and your social group may want to go out for an expensive meal every week purely because that’s what they’ve always done. Break this habit and you might find you enjoy the other options more.
I know several other well known personal finance bloggers have encountered problems when out for social gatherings. Occasionally, word will get out that they have a large amount in investments/savings and as such will be expected to contribute a larger percentage of the social event’s cost. Often people assume those who are financially independent have achieved it through inheritance or luck, whereas it can be a long journey involving alot of hard work. By organising alternative cheaper activities you can help avoid the resentment and awkwardness of these situations.
Similarly I know that alot of people who have achieved Financial Independence wish to help those who have not been so fortunate in life. Most people will donate money to a good cause and to turn your back on those in need could be considered being cheap. Instead. I prefer to remain frugal and yet still help those in need by donating my time to worthy projects.
Ultimately it is up to each of us to judge what is being frugal and what is being cheap. While being cheap may help you achieve Financial Independence; the true cost will be spent through your friends and family.
What frugal alternatives have you suggested recently to save money without being cheap? Let us know in the comments below.
9 thoughts on “Be Frugal, Not Cheap.”
At times it is hard to tell where cheap stops and frugal begins. I am a fan of building some “blow money” into your budget once you get to a certain level. It may be only a small amount, but having some discretionary funds available is good. It sounds like you made the right call. Those night out on the town can be expensive. Especially as the alcohol takes over being in charge. Thanks for the post.
I’m a fan for finding cheaper alternatives that would do the same. Having a drink at home with friends instead of going to the bar seems like a no brainer for me.
Exactly Tawcan, It’s tonnes cheaper and I prefer sitting on a comfy sofa watching what I want on TV whilst having a few beers instead of an uncomfortable bar stool and music so loud you cant even chat.
I’m out with friends in a couple of weeks’ time. I’ve already told them that I intend to find a restaurant that’s doing a good deal/offer, as I don’t want to spend too much.
We did the ‘eat and drink at a friend’s house’ one time – my house, my cooking! It’s someone else’s turn yet no one has volunteered!
Hah! I expect no-one else will volunteer either. I’ve been organising my friendship group’s Christmas meal outing for the past few years specifically so that I could select somewhere with the best deals.
We’ve had a similar problem in the past. We have started to suggest to friends and familily that we get together at each other’s houses to eat.
We will cook food to take with us. We call this “a make away”. It much nicer than a takeaway and you can eat much more healthily. Our friends and family have embraced the idea now.
Give it a try.
Keep on blogging.
BM
Hi Big Monkey,
That’s an awesome idea and pretty much what I had to mind to aim for. The problem is convincing others of the benefits, great to hear that youve already achieved this!
Hubby and I spent so many years having to be frugal that whenever we’ve had a few extra bucks to our names, we just couldn’t spend it. We remembered too easily how we’d gotten so far into debt in the past and we didn’t want to see history repeat itself (for the third time). Fortunately we don’t have expensive hobbies or high flying friends so we can be just as
cheapfrugal as we want to be without any social repercussions.Kat – Im the exact same. I had to live very cheaply as a student and when working my first job.. it all just kind of continued now. None of my friends are particularly ‘high flying’, they just like to pretend they are by splashing the cash every payday. It’s tough to watch sometimes and part of the reason why I try to encourage them to join me in the cheaper alternatives.