When I started my financial writing journey, I had a worrying question for myself: was I cheap or frugal? I was cutting back on my spending and maximising my savings, but I was concerned that I was becoming a cheapskate like an old friend of mine who I will call Katie.
Katie was the type of person who, on the rare occasions she ate out with a group, would go out of her way not to pay her fair share. The bill always came up short when she ate with us.
She wouldn't buy a car, let alone rent one or pay for taxis. Instead, she would only go to places if she could grab a ride with friends, and wouldn't contribute to petrol money. She would snag napkins and tomato sauce packets from restaurants and take them home.
I don't know if she went so far as to re-use paper towels, but it wouldn't surprise me. She was cheap in a way that inconvenienced others and showed her lack of caring for them.
As I was learning more about how to save money, I knew that I didn't want to be like Katie. A lot of people in the financial independence community can get overexcited about their savings rates and go to extreme measures. There's even a television show about it called Extreme Cheapskates. Sometimes it's hard to know where to draw the line between being sensibly frugal and being cheap.
There are a lot of reasons to cook at home instead of going out to eat. It's usually healthier, it can give you good kitchen skills, and it's cheaper as well.
But if you never go out with friends to eat to the point that you damage your relationships, and it makes you afraid when you do go out, you may have a problem.
It's a great idea to live within your means, but if that means not going to the doctor or dentist when you are having worrying symptoms, that can be the thing that leads to putting your health at risk.
If the check engine light is on in your car, or your tyres are getting bald, your decision to save a buck could end up killing you, your passengers, or innocent bystanders. Don't let frugality merge into cheapness with decisions that cause you or others unnecessary harm.
One key distinction for me was that when you are cheap, you cut out generosity from your life. To me, this is a bridge too far. Instead of going out to eat, have friends over and cook for them. Or make it a potluck dinner.
Instead of not giving gifts at all, make them gifts of service, like babysitting for them, or washing their car, something that makes their life better or easier without costing you money. Make sure you connect with friends and even strangers with a generous act fairly often.
I like the old Boy Scouts motto of "Do a good turn daily". I think it's a positive way to live that makes the world a better place. And it's not "spend a lot of money on others daily". Doing good doesn't have to be expensive.
Don't get me wrong, there are many benefits to cutting your spending. You can reach financial goals easily, you can put yourself on a sounder financial footing, you can be more generous if you have more to give, and you can overcome the psychological hold that consumerism has on nearly everyone in our society.
But it's a trend that can become an addiction, and sometimes that addiction can damage your health, your relationships and your mental well-being. Don't let the virtue of frugality become the vice of cheapness.
Schoolteacher Zach Holz (@HappiestTeach) documents his journey towards financial independence on his personal finance blog The Happiest Teacher
