Where Does Frugal Become Cheap? When Does Carefree Become Careless?


As community manager, I frequently get asked which topics cause the most controversy in Wesabe’s group discussions. Though no one subject is responsible for igniting debate, the most common clashes occur between the very frugal and the not so frugal.

The all-popular theme, “it’s not how much you make, it’s how much you save,” suggests that a hard dose of discipline coupled with a decent financial IQ leads to security and, what’s more important, peace of mind. Still, for many people, things like pets, multiple cars, and dearly loved hobbies can be worth debt, little to no savings, and less financial security.

Now crisis situations, like home foreclosures or loss of a job usually eliminate some of these “necessities.” However there is a chunk of people who aren’t in dire circumstances, and who are looking for a better relationship with their money, but are unwilling to change their behavior for it. Maybe they have some debt, don’t really budget, or have minimal savings, but nothing that pushes them into crisis mode. Granted, many of these people would consider their situations to be financially unstable. For them though, lifestyle and material comfort is worth financial insecurity.

Consider for example, the 32-year-old who is unwilling to forgo luxury expenses – cell phone, cable, car, restaurants – to max out his 401K.  Or the 27-year-old who chooses some debt and depletes her hard-earned savings to travel. While ideally we would pay off our credit cards each month, fully contribute to retirement and have an six-month emergency fund, there seems to be a decent number of people who are pretty responsible with their money but sacrifice some degree of financial security for more enjoyable day-to-day experiences.

As personal finance is, well, personal, and reflects what an individual wants out of their life, I am interested in where you draw the line between lifestyle and experience, and total financial security. Where does frugal become cheap? Or, on the flipside, where does carefree become careless?

7 Responses to “Where Does Frugal Become Cheap? When Does Carefree Become Careless?”

  1. Caleb Says:

    My girlfriend and I are constantly trying to balance these two concepts in our relationship. She is more for the moment (big spender), while I am more about the future (big saver). I think that it is important to balance the two. Our relationship cannot lean too far in either direction. We want to save for the future, but at the same time embrace today.

    Caleb (Blueprint Economics)

  2. Charlie Park Says:

    Trent, over at The Simple Dollar, had a great post on this a few months back, where he talked about “the frugal spectrum.”

    He talks about how the distinction between “frugality” and “cheapness” is how people value their time … if you see your time as having a worth, you’re more inclined to pay someone else to do something that you could do. If you see your time as being essentially worthless, you’ll put a lot of your own time into something, and won’t be as inclined to hire the work out. It’s worth a read, as is pretty much everything he writes.

    I often have a hard time when it comes to home repairs. For example, we had some drywall damage in our basement that had been there for about a year. I was happy to pay a drywall guy $250 to get it fixed, since it was work that I just couldn’t do very well. Also, I’d let it sit for a year and hadn’t done anything about it, and it didn’t look like that was going to change anytime soon. On the other hand, part of our stove broke (the glow plug lighter for the gas oven), and it looked like it would be about $250 or so to get someone out here to fix it (parts and labor). I was able to get the part (after hunting around for it) for around $60, and fix it myself. In that case, I was much more willing to tackle it on my own.

    And although I didn’t intend to come back to Trent’s point about “what’s your time worth,” I think those two house repairs illustrated it. I was willing to invest about 4 hours of my time to save ~$200 on the stove, but I was happy to pay someone $250 to save me ~10 hours of time (and to do a much better job with it than I would have done).

    So, yeah. Trent’s post is here: Is Time the Difference Between Big Spenders, Frugal Folks, and Cheapskates?

  3. Lee Says:

    It’s definitely a balancing act. If you’re too frugal your whole life then you’ll NEVER stop being that way and never actually enjoy yourself. You’ll just keeping thinking of reasons not to spend money and stay couped up at home forever.

    I think the biggest thing is 1) eliminating all the little tiny expenditures, 2) carefully plan your larger expenditures, 3) auto deducting for savings from your payroll.

    Number 1 is where some get frugal, but with some discipline you can still live a fun interesting life without overspending. Taking your savings from number 1 lets you pull off number two pretty easily, as well as give you the room to do number three.

    I think these things combined is the ideal blend of frugal / fun that we all would like to have!

  4. stephanie Says:

    To me, there is a clear line between carefree and careless. “Carefree” is when you manage your money well and know what you can and cannot afford. “Careless” is when your “personal” finance becomes not personal anymore – it becomes someone else’s problem, because you have to turn to them for help. I have some sympathy for single parents who turns to family for help because they’ve just been through a divorce and are having trouble feeding their children. I find it much harder to have sympathy for, say, a single person who took time off work to travel or visit friends, stops for starbucks on their way to work, and has 100+ channels in their cable package, but asks family or friends for help paying rent.

    Reading through the stories of other Wesabe members, it is clear that nearly everyone can find ways to free up money in their budget and grow an emergency fund. There is also a ton of great advice here and elsewhere on the web about frugal fun. Saving money doesn’t mean you can’t enjoy life.

    If someone chooses to spend all of their money on cable tv, lattes, and other things I would consider frivolous, that is fine – it is their decision what to do with their money, and only they can judge the value that adds to their life. However, I probably won’t be assisting them if they figure out they can’t pay their rent later.

  5. L Says:

    I agree with Stephanie, above.

    I feel like my views on how much leeway I have have to take risks (which is in a sense what not saving as much for retirement or not having a healthy emergency fund are) has shifted dramatically each time a new development in my life increased the number of people who depend on me.

    When I got married, when I got pregnant for the first time, when my parents developed serious health problems much younger than they had ever expected to… each time it became more and more important to me never to be in a position where I couldn’t take care of someone important to me because I hadn’t been careful enough with little expenses earlier in life.

  6. Corey Says:

    “While ideally we would pay off our credit cards each month, fully contribute to retirement and have an six-month emergency fund, there seems to be a decent number of people who are pretty responsible with their money but sacrifice some degree of financial security for more enjoyable day-to-day experiences.”

    Who is the benefactor in this ‘ideal’ scenario? I admit, I’m not the eldest likely to be sharing here, but regardless we still need to enjoy ourselves. Adhere to strictly to your ‘ideal’ plan and you aren’t sacrificing day-to-day experiences; you’re sacrificing week-to-week, month-to-month, and in time, year-to-year experiences. You wake up the morning after the day your first child leaves home and wonder where all that time went. You regret not having spent more time enjoying life together.

    Our economy had become over-inflated. George Carlin used to talk about people and malls and how we walk around stuffing our faces and buying “useless shit”. It was, as expected, a comical routine. Less expected, though, was that it rings so true that it’s become the staple of the American economy. We need to quit our addiction to credit even if that means leaving $140 denim jeans and $3,000 purses on the shelves.

    Paying off our credit and save for emergencies and retirement – it sounds like a decent enough start, but we must take care not to approach it in the wrong fashion.

  7. dr.kapil garella Says:

    i think the secret to success in attaining mental and financial freedom is a thin demarcation between essential expenditure and expenditure resulting from the dire need of our generation to prove to themselves and to people they interact with that they can afford stuff more valuable than you can,that they can afford cars bigger than you can,to superficially drill the fact onto their friends and relatives and the society on the whole that they have arrived and are happier than you whereas the fact might be something else,i think its a very simple thought that needs should be as per yourself not as per what people are expecting out of you.

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