Since high school I’ve been a diligent saver.

Like a squirrel socking away her acorns for a brutal Canadian winter, I stash my hard earned dollars in case of emergency!

Although I come from a middle class family, have consistently had a roof over my head, good food in my belly and never wanted for anything, I’ve always had a strange fear that I could lose everything. So I save and save and save….just in case.

I’m someone who will spend a few hours every couple of months on the phone with my cable/cell phone/utility company to see if I can decrease my bills.

I refuse to spend $300.00 on a pair of jeans, I only buy toilet paper when it is on sale (unless it’s an emergency) and I would rather walk 5km then spend $25.00 per day to park downtown.

Some may call this cheap….I think I’m being smart and frugal.

Am I cheap or frugal: that is the question!

I’ve asked myself this question on several occasions.

I’ve been called both…by my father. 

Thanks Dad!!

You see, my dad is more of a spender and he can’t always understand why I put so much time, energy and research into my purchasing decisions. He’s of the mindset that you can’t take the money to the grave so you might as well enjoy it now. He’s not reckless with his money but, the man likes to treat himself!

My lovely sister inherited my fathers money perspective. They are both extremely generous and don’t blink an eye when they spend $400 on a sweater or a nice meal.

I inherited my mothers sense of money. We are more practical with our spending and will never go into a store and make an expensive purchase without doing some research first to see if we’re getting the best a very good price.

We’re just different! 

Being cheap and being frugal are very closely related.

Both parties are concerned with saving money.

However, the approach on HOW to save money is very different.

FRUGAL

• People who are frugal LOVE to save money.
• People who are frugal make purchase decisions based on what they value. They are mindful as opposed to wasteful with their money. For instance, I value experience over things. I will spend thousands of dollars on a flight to a new country (once I have saved said money) because I value the adventure and experience.
• People who are frugal are willing to make sacrifices in the short term in order to reach long term goals. In order to save the money needed to pay for a trip overseas I will happily forgo eating out or spending lots of money on clothes….I just don’t value these things as much.
• People who are frugal are willing to put in the time to research their purchases and, as a result, are often more knowledgable on the topics of buying, saving etc.

On the other hand…

CHEAP

• People who are cheap HATE to spend money. They look to avoid spending at any cost, often at the expense of others.
• They’re not usually willing to sacrifice their short term enjoyment to meet long term goals. They want what they want, when they want it and will throw other people under the bus to get it.
• They bitch about the price of everything yet still make silly purchases.

So, which are you? Cheap or frugal? Still a bit unsure?

Here’s a quick quiz I’ve so cleverly devised to help you answer the burning question: Am I cheap or frugal?

1. Life has been busy and you’ve lost touch with a few of your friends. You all decide to get together to catch up. One of your friend suggests meeting for dinner at a new, expensive restaurant. You don’t want to miss out but you also don’t want to spend a ton of money on dinner….what do you do?

A. Join them at the restaurant but head to the bathroom as soon as you see the bill coming

B. Suggest that you all get together at your place for a potluck dinner

C. Make a reservation at a local Vietnamese restaurant that is totally delicious and affordable

2. You have been invited to 5 weddings this summer. You want to attend each one but weddings can be super expensive…what do you do?

A. Attend the weddings that don’t require travel and don’t bring a gift or a card…they said gifts were optional and you believe your presence is a gift in itself.  

B. You start saving as soon as you get the “save the date.” You bring a beautiful card and provide a cash gift that is enough to at least cover you and your dates dinners at the wedding.

C. You might have to choose 2 or 3 out of the 5 weddings to attend. Weddings are expensive.

3. Your winter heating bill is crazy expensive (thanks carbon tax ;)). You want to decrease your expenses. What do you do?

A. Turn down the heat one or two notches and put on an extra sweater.

B. Turn your heat down significantly. Go to your parents house, crank up their heat and stay there until spring.

C. Do some research to see how you can winterize your home so you can save on your heating bill this year and in the future.

4. Your brand new BMW SUV is almost out of gas. Gas prices are sky high and the thought of filling up makes you cringe. What do you do?

A. You drive across the city to get in a 50 person line to save .02 cents/L at Costco.

B. You go home and wait until dark then you siphon gas out of your neighbours car. Problem solved!

C. You sell your new BMW SUV and buy a more practical used compact car that is much cheaper on gas. 

5. You want to join your friends and their families on a weekend ski trip but the on mountain hotel is super expensive. What do you do?

A. Join your friends on the trip but stay in a more affordable hotel a little bit further from the mountain

B. Get together with another family to share a big room and split the cost

C. Tell your kids to bundle up…you’re staying on the mountain alright…but you’re sleeping in the car.

6. It’s your best friends birthday you need to get her a gift but you are running a bit low on cash this month thanks to an impromptu shopping spree. What do you do?

A. Book her a nail appointment/massage/____fill in the blank for NEXT month so you have some extra time to save

B. Look around your room for something you could pass off as an acceptable birthday gift

C. Meet up with another friend that’s going to the party tell her you forgot your gift (lies!!) and ask if you can put your name on her card.

7. You decide to go for an early dinner after a round of golf at your country club. You order steak and decide you will split a nice bottle of wine with your friend…you had a great game, you deserve to splurge. When the cheque comes you…

A. Make a big to do about picking up the entire tab for you and your friend but only tip 5% despite more than adequate service

B. You and your friend split the bill and tip down the middle

C. Your friend offers to pick up the tab, you accept but insist that you get the tip. Since you are saving on the dinner tab you tip a solid 20%.

So, are you cheap or frugal? Here’s your answer:

1. If you picked A you’re cheap. There are some caveats….if you have travelled a great distance to attend the wedding I suppose it’s acceptable not to bring a gift…but a card is always appreciated! If you picked B or C then good for you, I say you are frugal.

2. A = cheap, B and C frugal

3. A = frugal, B = cheap, C frugal and proactive!

4. A = if you picked this answer you could you please leave a comment and explain your decision. I will never understand the person who spends $60,000+ on a brand new car and then drives 25km to sit in line for half an hour (hello opportunity cost) to save pennies….mind blowing. I won’t call you cheap but I am confused by your choices. B = haha, you cheap…and a criminal! C = Smart and frugal…though you should have went with a used car in the first place. Click here to learn why.

5. A and B = frugal, C = cheap…only acceptable if you are a broke ass teenager!

6. A = frugal, but you should plan better, B = unless you have some good stuff in that room you are entering cheap territory, C= cheap

7. A = CHEAP and “braggadocious” (to quote the Big Orange). You are the worst. From someone who served for years at a golf course with rich people, if you can afford a golf membership and you make the decision to eat out then you better be prepared to give a decent tip. B and C = fair and frugalish. Maybe tipping 20% is more than you would normally give but it’s okay to give a little extra if the service was great. 

If you answered cheap to 2 or more of the questions then sorry, YOU CHEAP!

Obviously this is not a validated test so based on your results you won’t receive a clinical diagnosis of cheap or frugal, but you get the idea! 

If you are constantly saving money at a cost to others (a.k.a leaving your friends to pick up your tab, not tipping your server etc) then you are cheap.

You should practice making the transition from cheap to frugal before people stop inviting you places.

HOW TO MAKE THE SWITCH FROM CHEAP TO FRUGAL

1. Evaluate what is important to you. What do you value? I value my family, friends and creating experiences….among other things. I’m more than happy to spend money entertaining the people I love, having them over for a delicious dinner and drinks. I don’t bat an eye when it comes to spending money on my son…I won’t spoil him but I can’t wait to expose him to all sorts of new experiences. Similarly, when we are invited to a destination wedding and it’s for someone we love then I will make an effort to start saving as soon as we receive the “save the date.” As I mentioned before I am prepared to spend a lot of money on a plane ticket and accommodations to see a new city/country and experience a new culture.
2. Evaluate where you’re wasting money? I’m not going to talk about how much you can save if you forgo your daily latte….if that’s what you value then go for it. But, there are usually areas in our life where we are over spending and could make some changes. Identify these areas.
3. Decide on the sacrifices you are willing to make to achieve your goals and values. If you value travel and want to go on a trip every year or two then maybe you need to stop spending so much money on clothes or booze or eating out. Click here for some money saving tips that you can implement today. 
4. Make more money. If you are are being cheap because you don’t have enough money to support the lifestyle you want then you have two choices:
   1. Change your lifestyle
   2. Find ways to make more money. Ask for a raise at your job, sell some of your stuff on kijiji, get a side hustle. 

However, if you have more than enough money to support your lifestyle and you just choose to hoard your money then you might need to spend some time introspecting on WHY you are being such a tight wad…..you don’t want to be a Scrooge.

What do you think?

Is my assessment of cheap vs frugal fair? Do you have other ideas on how one can make the switch from cheap to frugal? I would love to hear from you. Please leave a comment and share your thoughts.

 

references

Post Photo by Toni Cuenca on Unsplash

Squirrel Photo by Vincent van Zalinge on Unsplash