Thanks to the recent financial crisis, frugality and thrift are increasingly becoming positive attributes. But if, like many people, you find yourself looking for ways to trim you spending, you may find yourself flirting with what can be a very fine line. You know: the one between making smart financial choices and being outright cheap. In fact, in many cases it's a line between thrift and outright thievery. You know you've hit it when your savings become someone else's loss - or your own. Here we'll look a few common examples where thrifty become downright cheap. How far would you go?
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Thrifty: Buying Items That Are on Sale
Cheap: Only Buying Items That Are on Sale
Seeking out sales can be a great way to help make groceries, clothes and virtually any other items you need fit into a tight budget. At the grocery store, for example, you might choose the cereal that's on sale, rather than the one that's on your list.
When people cross the line to cheap, however, is when they refuse to buy anything that isn't on sale. This can often backfire by causing you to buy things that might be of lower overall value or that you wouldn't have even considered buying otherwise. You may find yourself spending more than you would have had you just purchased what you needed. It can also put shoppers out of touch with the value of what they're getting for their money - and isn't that what thrift is all about? (For related reading, check out Attention Discount Shoppers: Don Buy Just Because It's On Sale.)
Thrifty: Tipping According to Service
Cheap: Never Tipping at All
Common etiquette requires that customers provide tips for certain services. As a result, some of these service providers are actually paid considerably less by their employers, because they expect that tips will make up the difference. In some states, this may even be less than minimum wage. If you get rude or indifferent service, it may be fair to leave nothing, but if you never tip, ask yourself why. Is it really because you feel your waiter or taxi driver makes plenty of money, or is it just because you can't bear to part with it? (For more guidelines on tipping, read When To Tip? And How Much?)
Thrifty: Putting Money Aside for Savings
Cheap: Saving Everything and Living on Nothing
Living a very Spartan lifestyle can a great way to achieve a big goal, but it's no way to live. If you're working toward retiring early, buying a house or taking time off work to spend with family, travel or pursue other goals, digging deep to make this happen just might be worth it. But if you find yourself saving nearly every penny and scrounging to make ends meet, it may be time to ask yourself just what you're saving for. If you don't have an answer, you've probably gone too far. (Get some great (and reasonable) saving tips in 5 Painless Ways To Save More Money.)
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Thrifty: Taking Advantage of a Good Deal
Cheap: Taking Advantage
If you find a great way to stretch a dollar, there's nothing wrong with making good use of it. For example, if you're in a coffee shop that provides free refills, stick around and enjoy a few cups if you're in the mood. But please, don't keep the cup and come back later (or every day thereafter) for more. A couple of extra cups of coffee probably won't put a dent in a business's bottom line, but if more people follow your lead, it might just quash its free refills. (You caffeine habit may be costing more than you think. Find out just how much in The Real Cost Of Drinking Coffee.)
Thrifty: Cutting Out Internet and Cable
Cheap: Stealing It from Your Neighbors
If you start cutting costs, you'll soon learn that you can get by with a lot less. But if you want to be able to brag about your frugal living ways, you have to actually do without. If you cut out your internet but then log on through your neighbor's wireless signal, you're about as enviable as the guy who parks a Prius in his driveway but keeps a Hummer in the garage.
The Bottom Line
If you've cut your budget so far that you need to resort to taking advantage of others, consider yourself cheap. The same is true if your sense of frugality begins to look more like austerity or self-denial. Budgeting and saving money should be a measured approach to reach a financial goal or survive tough times, not an end in and of themselves. While being frugal may be trendy right now, taking this trend to its extremes may be no better than falling prey to overspending. After all, neither approach leads to living well, which is what smart financial planning is all about.
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