'A billionaire can be a cheapskate': The difference between frugal and cheap, according to an etiquette expert

In this era of rising costs and tightening budgets, legion money experts are happy to give you advice on how to be more frugal — how to slash costs, save on groceries and avoid frivolous, overpriced purchases. But while the financial world is quick to laud savers for their frugality, no one wants to be thought of as a cheapskate.

"It's a very fine line," says Thomas Farley, an etiquette expert and keynote speaker known as Mister Manners. "Obviously, cheapskate is pejorative for I think 100% of the population, whereas frugality is definitely considered a virtue."

The difference, he says, lies in whether your penny-pinching affects those around you. Someone who could afford first-class seats but elects to save money by flying coach, for instance, is merely being cost-conscious, Farley says.

"A cheapskate is someone who is simply not paying their fair share. A billionaire could be a cheapskate," he says. "Someone who is a cheapskate has money, but they're choosing not to spend it, very often to the detriment of people who are paying their fair share."

How to avoid being seen as cheap

There's no problem with sticking to your budget or prioritizing where you're spending your money — both money and protocol experts are in favor "loud budgeting" strategies. But if you're coming across as cheap to other people, you're likely breaching the rules of good etiquette.

Here's how to avoid that perception.

Read the room

To avoid looking cheap around your friends, it's important to take the temperature of how they usually behave with money, Farley says. Take the classic example of a shared meal at a restaurant. "There's nothing wrong with paying for exactly what you ate, providing that's what your group does," he says.

If your friend group usually splits things evenly, counting out the pennies everyone owes every time you go out might rub people the wrong way.

Similarly, it will look gauche if you're calculating your portion of the tab down to the cent, then turning around and posting about extravagant vacations on social media.

"That's certainly going to leave a bad taste in the mouth of friends who feel you're crying wolf over your budget if the next day you're posting about shopping or taking trips," Farley says.

Be transparent about your boundaries

If you don't have room in your budget for something, that's a different question. In those cases, you'll never be perceived as cheap if you communicate ahead of time that you can't afford something like a group trip or a meal at a swanky restaurant. That may mean simply declining an invitation or making alternative plans that you can afford.

"It could be that you don't go to the steakhouse where you know you can't escape without paying $100 a person," Farley says. "Or maybe you suggest a place such as a food hall where everyone can get their own meal. Maybe you suggest lunch instead of dinner. There are creative ways of navigating that conversation."

The cheapskate move, says Farley, would be to tag along and underpay, go missing or ignore Venmo requests when the bills eventually come due. You're much better off setting boundaries with the people in your life about what you can and can't afford.

"People who are budget-minded and mannerly-minded will be very transparent about that," Farley says.

'Don't shoot the messenger'

Costs are up just about everywhere you look, sometimes to a frustrating extent. But that's no excuse to ignore the normal rules of etiquette, says Farley.

Going to a friend's destination wedding can put a major dent in your budget, for instance. "You might think, 'We're paying all this money to go down there, so we're not going to get them a gift,'" he says. "That gets back to the cheapskate concept."

The same goes for people who may feel that the price of a meal or a cappuccino has gotten too high.

"Don't shoot the messenger," he says. "The server at the restaurant doesn't set the price of the food you're eating. The person pulling the muffin out of the case doesn't set those prices."

Lowering your tip or deciding not to tip in traditionally tipped interactions is "not a very courageous thing to do," Farley adds. "You're penalizing people in this situation who don't set the price and taking money out of their pocket in the process."

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