Tag Archives: frugal vs. cheap

Drawing The Line Between Frugal and Cheap

Two of my guilty pleasures are wash and fold Laundry and Toll Roads. While both of these are seen by many as unnecessary splurges, I happen to love both.  I have a sticker on my car window that lets me zoom through the toll gates without stopping, and I always find I get a little smile on my face as I zoom past all the people who are waiting in line to pay a toll. Even better, the toll provides me with an added benefit: fewer people on the road and a more direct route to get where I want to go. Wash and fold Laundry Provides me with a similar benefit: I don’t have to spend my weekend washing clothes, and making sure I get them out of the dryer in time to ensure they aren’t wrinkled.

Right about now, you’re likely thinking, “But FinanceTiger, both of these things cost money.  Why would you waste money on this if you’re trying to save for retirement?”

The answer is that both of these save me enough time that they are valuable. This is the key differentiation between being frugal and being cheap.  Cheap is the guy who washes his paper plates and hangs them to dry in his kitchen. Frugal is going to some place like Ikea and buying a set of stoneware for around $20, solving the problem of dinnerware for the foreseeable future, and for a much lower total cost.  When you’re frugal, you take into account the full cost of your decisions, when you’re cheap, you look only at saving a little money, often at the cost of your time or, as in the example above, other people’s desire to be around you.

The hardest thing for many people to understand is that you pay for things in life with two things: money and time.  There will always be more ways to get more money, but once you spend your time, it’s gone. The best reason to free up time is for new projects. In the 4-5 hours it takes to wash and fold laundry at home, I could write new posts here, work on a freelance project for a couple hours to recoup the cost of wash and fold, and hit the gym.

Toll roads are a similar situation. You’ll save gas by taking a more direct route and dealing with less traffic, while also reducing the wear and tear on your car and getting to your destination faster.  If you have a cruise card or similar, it makes the trip even better, since you won’t even have to stop to pay a toll. There are two easy ways to determine how much you save taking a toll route instead of the alternate routes. For the first one, subtract the difference in mileage between the two routes, divide by 2 and subtract the tolls – this will give you the savings in vehicle costs. For the second, look at your hourly pay rate, double it, and multiply it by the time you saved, in hours.  If these are positive, then you’re coming out ahead using a toll road.

What are the time savers that you’re willing to pay for? Let us know in the comments.