Ask the grumpies: Tightwad vs. frugal

First Gen American asks:

I believe that the difference between being frugal and a tightwad miser is knowing when to throw money at a problem. What is that tipping point for you? Define, elaborate, ponder.

This is a really popular personal finance topic, especially with frugality bloggers.

For us, frugality has to do with efficiency and value.  As a frugal person, you may buy a more expensive model of a needed item, but that item will last longer and give more pleasure while you use it than a cheaper model would.  Frugal people do not have false economies.  They are happier with less stuff, but they buy what they need and some of what they want.  They don’t waste money on things they don’t really want, and they make sure they’re able to afford what they do buy.  Frugal people are mindful of their purchases and their true desires.

Misers practice false economy– they save pennies and lose dollars.  They lose horses for want of a nail.  They fail to make purchases that would increase their overall happiness and even those that would increase their overall income or wealth.  (Not knowing when to throw money at a problem.)

Tightwads and cheapskates neglect their personal and social capital.  They go against social norms in ways that can hurt other people.  They may practice petty theft (see: ketchup packets), under-tipping, and so on.

Grumpy readers, how do you differentiate between the different types of low-spenders?

4 Responses to “Ask the grumpies: Tightwad vs. frugal”

  1. chacha1 Says:

    I believe the distinction between “frugal” and miser/tightwad/cheapskate is one best drawn from a person’s view of money, even more than from their use of money. A frugal person is conscious that money is simply a tool. The other is not conscious of that. Money is an end in itself to the miser/tightwad/cheapskate. They want more money, they don’t want to spend money, they think about money a lot.

    I think the miser/tightwad/cheapskate mentality is very similar to the physical hoarding mentality, and often related. The frugal person doesn’t buy more than s/he needs; the miser accumulates. Failure to comprehend the inherent contradiction between obsessing over having money, and spending it on more than a person can use, is part of miser pathology IMO.

    Money can represent security to both the frugal and the miser, but the frugal person understands that it is the USE of money that generates security (through car or home repairs, for example; or securing education; or investment in a work wardrobe that potentiates a promotion). The miser thinks the money alone will suffice for security.

    The miser is also frequently paranoid and of the stuff-it-in-the-mattress frame of mind, not trusting banks or investments, and not uncommonly spending the precious money to accumulate “self-sufficiency” in the form of bulk-bought items.

    Note, I wouldn’t say that bulk-buying has no place in a consciously frugal life. There are times when you really can save significantly (time and money) by doing so. I’m talking here about the person who buys, e.g., toothpaste every time he gets a coupon for it, until he has a whole cabinet full. :-)

  2. hush Says:

    “Tightwads and cheapskates neglect their personal and social capital. They go against social norms in ways that can hurt other people. They may practice petty theft (see: ketchup packets), under-tipping, and so on.” AMEN! You nailed it – T’s & C’s choose behaviors that actively harm other people outside of their own immediate family.

    Case in point: we’re in a wine group with 3 other couples where we all bring a bottle of a certain varietal and do blind tastings. One of the couples just got kicked out because they’ve refused to spend more than $10 a bottle (where everyone else spends $25 or so). The final nail in the coffin was when they were finally called out on it, they lied rather obviously. It’s actually not even about the money, it’s about the gesture of utter thoughtlessness plus the ridiculous lying they’re willing to do in order to save $30 a year. And they’re probably in the top 2% of US income earners. Ugh. Good riddance.

  3. EngLitProf Says:

    My former landlord routinely waited to pay for the building’s heat until the day when the heat was to be shut off—after his bill included penalties for tardiness; after his tenants had been scared by the notices the utility company placed on the front door; and after tenants, not hearing a word from him, had been obliged to speak to the utility company to make alternative plans.

    My former landlord was so bothered after the postal delivery person lost a key that he insisted the U. S. Postal Service compensate him for replacing every lock in the building, plus pay penalties, for a dollar total in five figures. For over a year, the postal delivery person could not get into the building and get to the mailboxes unless some nice tenant just happened to be around to open the side door for her. When my then-landlord found that she had propped open this door while she carried boxes of mail from her truck, he closed the door and would not open it for her.

    My former landlord once sued someone who sold him an apartment building because the seller failed to disclose that years earlier one of the 36 units had been converted from some other use without a permit. The case was dismissed, of course.

    Word gets around. Let’s just say that a compulsion to be “frugal” (responsible, careful, etc.) leads a person to be such a tightwad that the ends of frugality are defeated.

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