Chintzinesses? How d’you like that word? I can’t think of a word parallel to “frugality” (n) that means “an act of cheapskatishness.” Nor can I think of a word meaning “the state of being a cheapskate.” Cheapskatitude?
At any rate, our subject is that perennial favorite: When does one cross the line from frugality to chintziness?
This weekend I happened to mention to M’hijito that when La Maya and I were out and about in pursuit of a distant estate sale, we stopped at a Starbucks, where I ordered a café Americano. He allowed as how the only way to get a decent cup of black coffee at that chain is to ask for the café Americano, as their ordinary drip coffee is battery acid, fit for nothing other than as a cheap medium for sugar, artificially flavored syrup, and milk or cream. Café Americano is dilute espresso. The reason it tastes better than Starbucks’s normal drip coffee is that espresso beans are higher quality than the schlock used to make the battery acid.
Then he remarked that he highly resented paying $4.30 for an iced coffee (the price being the same, whether you take your coffee hot or cold).
This remark caused me to reflect that yes, I had paid $4.30 for a medium-sized café Americano. Uhm…yes. Four dollars and thirty cents for a cup of coffee.
I mean, really. Four and a half bucks for 50 cents worth of ingredients and three minutes’ worth of a minimum-wage slave’s time? Does that make sense?
Well, it wasn’t the coffee we were buying so much as the moment to pause and socialize—and to get someone else to provide the social lubricant of a hot, caffeine-laced beverage. Could we have gone to one of our homes and fixed our own coffee, saving about $8 on the $8.60 the two of us spent at Starbucks? Of course. But it wouldn’t have been the same.
As a practical matter, once we got back to our neighborhood, we each would have figured it was time to go on about our daily business, and we probably wouldn’t have taken the time to fix coffee. Or, if we had, we would have diddled away too much time in one living room or the other, and then we each would have felt put upon by the many tasks that awaited us in our respective days.
Sometimes I wonder if I’m not way too tight about things like this.
Take, for example, the cell phone issue. I’ve resisted getting a cell phone because I think I already spend too much on connectivity—$78 a month to keep my computer online and the landlines running is too darned much for phone service. More to the point, in my mind I can’t afford another $80 to $120 for an electronic tether.
Really?
My gross income, if you include the $1,025/month coming from savings, is $7,000 a year more than my son’s. If, rather than setting aside my entire teaching salary, I self-escrowed only enough to cover my share of the mortgage (and let the future take care of itself, even that means the future surely will include a foreclosure), what remains of my gross would only be about $1,525 less than my son earns.
And he can afford an iPhone. Keeping that thing online costs $120 a month!
So why couldn’t I afford, say, a Droid, at $80/month to Verizon?
Surely I could at least afford an iPad. That costs only $15 or $25 to connect. And despite the fact that the way-cool iPad isn’t designed as a phone, an easily accessible app will give you free phone service through the thing! With that, I could have my cake and eat it, too: get the coveted electronic gadget, use it as a cell, and not even have to cancel the landline.
M’hijito never has paid for a land line. He uses only his cell phone. IMHO, this is something of an inconvenience, because he’s always misplacing the thing and not answering calls when he can’t find the phone.
SDXB recently canceled his land line service. He also is now using a cell only. He claims he doesn’t lose it because he carries it around with him everywhere, and because he has a single place in the house to keep it when he’s not using it.
Right. I had a single place to keep the $725 pair of glasses I just lost.
Still. If I canceled the landline, all that would remain of the Cox bill would be $50 a month for the computer connection (SDXB says he’s only paying $30 a month, presumably because he has a slower service).
My S-corp could pay for the iPad connection to AT&T—it’s only about $25 a month. If I could use that with Google’s Talkatone to make free phone calls, the worry about calling for help when my car craps out on the freeway would go away. And that concern is the only real reason I want a cell phone. If the S-corp were footing the bill for the mobile phone connection, there would really be no reason to cancel the land line, which allows for a telephone in every room in the house—no chasing around every time the phone jangles.
Canceling the landlines and having the S-Corp pay for the iPad would cut my personal nondiscretionary budget by almost $30 a month.
Here’s the question: Am I frugal or am I cheap to keep resisting the mobile phone?
For that matter, is it frugal or is it cheap to consider adapting the reasonably priced iPad (reasonably priced considering what it is!) for use with Google’s free voice app and calling that a “cell phone”?
Is it frugal or is it cheap to consider canceling the land line if I could get the iPad to actually function as a telephone?
Is it frugal or is it cheap to think coffee should be purchased at Starbuck’s only on special occasions—or preferably, not at all?
To keep Starbucks to a rare treat — frugal. To resist a cell phone — cheap.
For years I “made do” with dial-up internet + landline (hi-speed not available in this rural area) and a bottom-of-the-line Tracfone (which if you don’t use it much and buy a year at a time can work out to only $10 a month.) After much figuring, I gave up all three and got an iPhone instead. I love it. And, yes, it goes wherever I go.
It wouldn’t work for someone (like you) who needs access to hi-speed internet at home, but for me it turned out to be a frugal (and fun) solution. It seems to me that the iPad is not a frugal solution. Keeping your current computers until they die would probably make more sense, but maybe cut the landline and use a pay-as-you-go cell phone?
I agree that Starbucks coffee tastes like battery acid.
I disagree that what you were paying for was “the moment to pause and socialize”.
What you were really paying for was the ambiance and the brand.
I think that Dunkin Donuts and Mcdonalds have far better coffee. If I wanted to pause and socialize, I would go into one of those places for better coffee at 1/2 to 1/3 the price of Starbucks.
@ Weston: Well, Starbucks is charging for the brand, but that’s not what I’m paying for. 😉
True that Dunkin’s coffee is 100% better! They’ve closed most of the Dunkin’ Donuts outlets in the Phoenix area — they’re now hard to find. And I really dislike McDonald’s — don’t like the smell of greasy food frying. Now…greasy sugary dough frying, that’s another matter! 😀
@ Holly: The iPhone is painfully cool! I want one of those, too. But I do know I can’t afford $125 a month, no matter how I try to work it. I can’t do without a DSL connection, which is $50/month. Add $125 to that, and my connectivity bill rises from $77/month to $175! Out of the question.
If, on the other hand, CED pays for the DSL charge and I get an iPad, then I get all the kewl things the iPhone does plus a virtual keyboard that I can see (I have to take my glasses off and hold the iPhone up to my face to see its screen), tons of apps, music, GPS, Macmail, and stuff I don’t even know exists. If it can be jury-rigged to work as a phone, too…hey! It’s the Star Trek Machine from Heaven!
Ohhhh if i’d been born a boy, i could change my name to Jean-Luc Picard….
Seriously, the other day I read an article (Wired? one of those) speculating that in short order the iPad will crowd out the iPhone and also the various permutations of laptop computers. In time, this author supposes, there will be only the iPad (and similar tablets) and the desktop, and for that matter the desktop isn’t long for this world.
Ever see a desktop in Star Trek? Hm.
LOVED the Star Trek references. Seriously though. I totally agree on paying for occasional “social lubricants” and I love the phrase that you thought up. It is no different than going to lunch with a friend. Surely either one of you could make the food at home, AFTER you make the house spic and span, but who wants to? And you COULD sit at McDonald’s with cheaper/better coffee but what 60 year old wants to?
In fact $4.20 is a very cheap social lubricant. I say do it once in awhile.
On to the cell phone. Find the one you can rationalize into your budget and buy it. No woman living alone should be without one these days. Even if you can afford a brand new car every year……and who can do that? Driving at night with a cell phone……..much better for your psyche.
On a completely different-ADD note…why do you talk about your S-Corp like it isn’t you? Is it just mental math? It is a pass through entity? I guess you are saving 15 to 20% vis-a-vie the deduction but is that the only reason?
It’s interesting watching the ongoing saga of winding up as a bag lady versus electronics gizmos and keeping up the middle class front. It would give me psychic whiplash. That being said, as a woman alone and with a very limited income, I am not willing to drive my older, paid-for car without having my cell phone on me. I’ve never lost it for very long. Knock on wood.
@ Evan:
Well, it’s a tax advantage. I can spend the money from CE Desk on business-related items without having to pay any tax on it.
Income from teaching, savings, and Social Security (i.e., post-tax “personal” income) really does not suffice to cover a monthly cell phone bill. It just covers necessities, the cost of running the house and car, my share of the misbegotten mortgage, and the self-escrows for insurance and taxes.
If I drew money out of the S-corp, put it in my personal account, and used it to pay for a cell phone, a computer, or an iPad (all of which my accountant assures me are legitimate business expenses of the corporation), I would have to pay income tax and FICA on every penny that is designated “salary” and taxes on the part I could get away with calling “dividends,” and the S-corp would have to pay its share of the FICA. Thus having the S-corp buy these things directly saves a significant amount of money.
In fact the accountant suggests I aim for a zero-sum arrangement: spend as much as the business earns, at least for the next couple of years. The trick is estimating revenues accurately; one never knows how much or how little business will come this way. But if revenues stay at their current level, they should support a 3-G connection for an iPad.
@ Patty: yes, the whole issue of riding around the freeways in an 11-year-old junker is a strong argument in favor of having some sort of mobile phone! It used to be you could walk off the road and make a call from any pay phone. But now there are no pay phones. It’s a scary proposition…especially in 118-degree heat.
I didn’t think about the business expense side of it…on that note GO FOR IT lol although I hate apple products lol
My two thoughts:
1) Starbucks for us is a treat. We make coffee at home, everyday, at a fraction of the cost. But for a special treat, we’ll get something we can’t make at home – and enjoy the entire experience.
2) A cell phone is a one-trick pony. (one function – It makes and receives calls). An iPhone or an iPad is a multi-use device. So if you are being frugal, and trying to stretch your buck the best, picking the multi-use over the single use is the better way to go. Whether you choose the smart phone or the tablet is personal convenience – you want to find the one that fits your lifestyle the best.
Your S-Corp should pay for every business expense you have including your home office addin in utilities and that box of kleenex on your desk.
You only have to pay income tax on dividends (Distributions of Profits) from your S-Corp no FICA or MED. Pay yourself a salary and a dop after your S-Corp pays all your business expenses including transportation costs. The limit on the salary and dop is 50/50.
Since you are taking early Social Security ONLY your salary counts toward the monthly limit. The DOP does not as it’s a dividend. (Congress works in strange ways)
Do you have a credit/debit card for your S-Corps bank account?
Why not share your son’s cell plan? A second line should be much cheaper. Unlimited texts on all 5 cells, one with internet, zero smart phones on my family plan for $120.
@ Brenda: His is underwritten through his employer…Mom is not eligible to tag along on Mega Insurance Corp’s phone plan. 🙂