When frugality goes too far

At times I've been called cheap. I'm not. I'm frugal.

Cheapness is clinging to every cent. Frugality is spending money in the smartest possible ways.

Cheap behavior harms your qualify of life. Frugal behavior helps you build a better life.

A cheap person risks damage to health, possessions or reputation just to save a few dollars. A frugal person knows when it's time to loosen the purse strings -- and does it on his or her own terms.

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For example, a cheapskate might stick with a 30-year-old mattress because he's too miserly to buy a new one. A frugalist replaces a bad bed to avoid a bad back, but he'll use a price-comparison website to find the best deal and maybe order through a cash-back shopping site.

Cutting your food bill might be frugal, if you choose the right foods. Eating nothing but oatmeal and ramen would be cheap -- and counterproductive, since your health could suffer.

Getting free Internet access at the library? Frugal. Piggybacking on a neighbor's unprotected Wi-Fi signal versus paying for your own Internet? Cheap, because it may be illegal (though prosecution is unlikely) and may expose you to identity theft.

Don't be that guy
Thrift stores, yard sales and clearance tables are all frugal, but they can also breed cheap behavior, such as buying:

• Clothes that aren't flattering (especially if they're for your kids).
• Shoes that don't fit right or provide enough support (plantar fasciitis is not frugal).
• Inappropriate presents (a bib with spit-up stains is not a good shower gift).

Speaking of presents: Re-gifting can be frugal, or it can be appalling. If you have an unopened game or unburned candle, wrap it up. But don't insult a relative or friend with an obviously used item or one with your initials on it.

Borrowing can be frugal or really chintzy. The truck-owning friend who helped you move might ask to use your power washer. The neighbor who borrowed your shop vac will bring over his chainsaw if a limb comes down in your yard.

Don't be that person who borrows but rarely reciprocates. And definitely don't be the person who borrows solely to avoid buying his own power tools.

Take care of yourself
Some people skip health insurance to save money. Really bad idea. Regular dental and medical exams can catch small problems before they turn into serious problems, or fatal ones. (If coverage truly isn't in your budget, see "Can't afford insurance? Your options.")

It's not that I want to spend $442 a month on an HMO. It's that no body runs for 54 years without some maintenance issues.

I was reminded of this last month when I suddenly needed surgery. My share was just over $2,000. If not for insurance, I'd be setting up a payment plan for more than $10,000 in total costs.

Skipping insurance would have been not just cheap but dumb. Luckily, I'm neither. I'm frugal.

More on MSN Money

• Frugality: The right life choice
• Why are you frugal?
• 5 money truths that aren't obvious