I’m fortunate to work alongside one of my closest friends from residency. While we both live in the same seaside suburb of LA, he lives a spendier lifestyle than I do but often invites me to join him at the latest foodie restaurant, concert or cultural happening. He knows me well enough that when he witnesses my mental gears calculating the cost involved, he’ll try to overcome my reticence with, “Come on, you’re a rich doctor.”
He likes to recount the story of the alternate housing arrangements I made for three of us when we attended the ACEP Scientific Assembly during our graduating year of residency. I found a hotel a few blocks away from the Seattle luxury hotel where the conference was being held at a fraction of the price, and when a third friend (married with two kids, looking to save) asked to join us, we got him a rollaway bed. In my friend’s retelling, I scored us a dump in the meth-friendly part of town. My version: other than the minimal sleeping we did all weekend, we spent virtually no time in our room and saved a couple hundred bucks per person.
While I continue to defend my sketchier-than-a-youth-hostel choice of accommodations as a struggling resident, I’ve developed an internal compass that lets me distinguish between frugal and cheap decisions. When my surf kayak was stolen, I deliberated over waiting to find a surf kayak on craigslist (potentially sitting out the rest of the season waiting), and ultimately bought one new at a local kayak shop. When spendier friends try to lure me to foodie restaurants that I don’t regard as a good value, I’m usually able to redirect to interesting mom and pop international cafes that we can both appreciate. I’ve learned to stay ahead on certain purchases when I find a terrific deal (carry-on travel packs, active wear and hiking shoes). I balance this against stockpiling tendencies, with mixed results.
The Finance Buff, has blogged on this topic before and had two helpful pieces of advice. First, don’t obsess over the need to find the best deal on smaller ticket items. Certain family members seem genetically predisposed to spend an extra hour checking online flights to save 40 extra bucks. They score the best deal, but spend time worth far in excess of those savings to do it. Being satisfied with good enough is probably the way to go.
The second tip is that the way to save in the long run is to “waste money on small things, win on big rocks.” Sure, you can buy the cheaper brand of coffee and clip the coupon, but if you don’t maximize your retirement stash, pay off debt, and drive the gas-efficient beater car you are rearranging deck chairs on the titanic.
Frugal is optimizing the best value for your money. Cheap is refusing to part with your money due to a failure to recognize value. I’m proud to be frugal.
How do you rock your frugal street cred?
Financial Literacy for The Newly Minted Physician