Being Frugal With Other People’s Money

I am always amazed to learn how many business executives are quick to spend “the company’s money,” but more frugal when it comes to their personal household budgets. But this phenomenon is certainly not limited to business people.

In fact, politicians probably do a better job (or worse, in this case) of spending other people’s money than anyone. I’ve even known some churches to operate this way, as well, with a church board or council quick to drive a congregation deep into debt by expanding their building, and then using tithes to serve interest payments on the debt.

This seems to be the ultimate hypocrisy to me, which is probably why I will never be asked to serve on any church boards!

I am frugal by nature, and save a few luxuries, don’t spend a lot of money on myself. But I am much more frugal with other people’s money.

I would much rather work in a spartan office than a lavish one.
I don’t expect a company to pay for my personal expenses that I’d have to pay anyway if I didn’t work there.

I have a theory that the less people have to work for the money they get to spend, the less frugal they are spending that money.

In other words, the general contractor out the door at 6:30am and hustling until dark to renovate properties for a living will be much more careful with his expenditures than a government agency funded by tax payers’ money negotiated by a 3rd-party lobbyist.

The Company Men

The other day I was home sick with a touch of flu. The only bright spot was getting to catch up on a couple movies. I didn’t remember hearing about The Company Men when it was released, but the cast seemed good and I liked the storyline.

The movie’s plot is taken directly from the headlines around the beginning of the financial crisis back in 2008. A large conglomerate with divisions in manufacturing, ship-building, healthcare, etc. is looking for ways to boost their stock price and turns to massive layoffs as a way to reduce costs.

While I understand layoffs are sometimes necessary to survive a downturn, or to eliminate “unnecessary reduncancies,” I think it should be a last resort. In the movie, the company’s CEO is in the middle of purchasing a renovating a new corporate high-rise, complete with an “executive” floor dedicated to the CEO/CFO offices, etc. He runs down the list of lavish amenities just after agreeing to lay off another 5,000 employees.

Related Reading: How to Survive a Layoff

I suppose some level of greed is part of human nature. Or maybe it is true that power does corrupt. Regardless, I think we all have a responsibility to be good stewards of money, especially money that doesn’t inherantly belong to us.

Do your frugal ways carry over to the office?


  1. Jason, in regards to your comments regarding companies, CEO’s & layoffs, there is a website you would find interesting. Its called “”.

  2. Like a lot of corporate issues, the rot starts at the top. When the worker sees the CEO getting what he can, he starts looking around for whatever he can grab too. It’s a system that from Janitor, to CEO, to Shareholder says “Screw that guy, I’m getting as much as I can.” And it’s human nature.

    Frugal around the office? Not a chance. Frugal with other people’s money? Completely.

  3. Jason – Thanks for the article. I disagree with your link between how hard people work to earn their money and how frugal they are. A few examples:

    – 25%+ of college graduates fail to enroll in their 401k – It takes a lot of effort to earn a college degree and many graduates go on to work hard in well paying jobs. They still however fail basic steps of personal financial management.

    – In his book “Stop Acting Rich” Thomas Stanley argues that wealthy individuals who come from backgrounds of small economic means often use loud displays of wealth to demonstrate that they conquered their past

    Some skills needed to be responsibly frugal overlap with skills needed to work hard and reach success. Some however do not.

    Skills for hard work: discipline, focus, consistency
    Skills for personal finance: automation, tracking, long-term planning

    • JP, You make a good case against my theory – which was more of a generality, and admittedly, probably skewed by my own experience with various types of people.

      I had forgotten the point Thomas Stanley made regarding “loud displays of wealth,” and have certainly seen a lot of that myself among acquaintences with meager beginnings, but now living lavish lifestyles now as if to make up for their years of struggle.

      Thanks for your comments.

      • Thanks Jason. I wonder if there are some common habits/characteristics among hard workers who also have disciplined financial habits. What sets them apart from the hard workers who are less disciplined with their finances?

        A few thoughts:
        – Strong inclination towards personal improvement (without seeking external recognition)
        – Affection for data and measurement
        – Familiarity and passion for systems (particularly automation)

        Of course, there are many many more.

  4. 3 types of way to spend money. Your money on yourself, otherpeoples money on yourself and other peoples money on other people. There listed in terms of efficiency or value creation

  5. Absolutely, I am frugal @ the office. Have to be as I audit use of federal funds. Can’t be a hypocrite, plus i’m frugal by nature.

  6. I am very frugal around the office… but it surprises me that those higher up, like the office manager, think nothing of spending the boss’s money on trendy spendy gadgets and systems for the office, when the plain-jane versions of same would work just as well, for so much less….

    But then that is the same person who will spend thousands a year on clothing and accessories, when I might spend $200 a year on a very lavish year! …. LOL!

  7. Just to poke fun; I sure hope you don’t deduct on your taxes the internet and computer you use to make this blog. Because those are things you had before or would have most likely anyway. Anything else and you are asking the taxpayers to help fund your business.

    Like I said just fun..

    • Well, I’m not asking them to fund it as long as I am deducting it from my revenues and lowering the amount of tax I have to pay – not asking for a credit for work I haven’t done. I actually skip a few eligible deductions for things like a home office, etc. to avoid any potential red flags with the IRS – not worth the hassle.

      But I see your point.

      • Agree with you on skipping the home office deduction – It is not enough to risk raising the red flag with the IRS…. Exactly what my tax man told me also!

  8. Jason:

    One other point about “Other People’s Money”; in some contexts (e.g., US Federal Government procurement, ….) the process to spend the money [must use small business where possible, GSA prices from large vendors, …..] is such that by the time you’ve complied with the mandates [Federal Aquisition Regulations], the desiderata of spending less money becomes a nice to have and very low in priority. Also, when a government worker is traveling s/he must use a fully-refundable Government fare and justify a lower cost, non-refundable one. 🙁

  9. Absolutely. My husband calls me the Finance Nazi and people at work have teased me about it as well. My work actually helped to influence my personal life. I manage quite a large budget professionally and of course, have to keep a constant eye on what my team is doing, etc. I’ve applied a number of those principles and tools to my personal life which has been great!

  10. I’ve worked in both large corporations and small businesses. In every case, I was always careful with money because it’s about fiscal responsibility (large corporations) and clients and the whole enterprise (small service businesses). Why spend more than you have to, for anything? This is not the same as always trying to haggle (When you’re hiring high-end vendors, you don’t haggle. Not if you want them to work with you. I’ve always found it a matter of saying: We’d love to work with you. We need X and this is our budget. What can we do? We’ve ended up working with the top people even when our budget didn’t match their fees because they offered a way to do so. If we had insulted them by saying or implying that their fees were too high, they would never have worked with us. )

    Not only did I not take stuff (office supplies, etc.) from the office, I brought in my own supplies for things I needed that weren’t available, on my dime. I also used a lot of my own tech equipment because it wasn’t available.

    (It’s too bad the IRS doesn’t let you take deductions for these things as an employee because today, you have to do this in a lot of jobs.)

    What some see as overspending is sometimes related to the nature of the business. I’d happily stay in a cheap motel (if it were safe and not miles away from where I needed to do business) but when I am working with certain clients (who we entertain, etc.), it is imperative that we stay at mult-istarred venues and eat at the places THEY want to go to. And,yes, entertain them. It’s part of the business.

    You can still get good rates and bargain and be “frugal” even if you’re not being cheap.

    And FYI, the most productive and best employees? They spent far less than a lot of others who were simply using the company’s dime to indulge in a lifestyle they either couldn’t afford or would not pay. But some “star” types seemed to think a company OWED them five-star everything. They get away with this at the expense of the rank-and-file employees who basically “fund” their over-the-top expenses. (To me, I don’t care who you are in a company. If you mandate employees fly coach, stay in X hotels, then YOU follow the rules too. Whether you’re the CEO or CFO or whatever. Don’t expect others to do what you won’t. You want a private jet? Use that 9+ figure salary and pay out of your own pocket!)

    FYI: I’ve many times paid more (on my dime) for where I stayed because the alternatives were unacceptable (You don’t always have the option of a cheap hotel or motel.) based on safety concerns.

    As a female professional, I”m not going to stay anywhere that is risky just to save a few dollars. No way.

    When I was the Account Supervisor at an agency, I was notorious for reviewing client expenses and really making sure our clients were not overcharged or had unnecessary charges. I don’t believe in “padding” expenses. We charge a fee and then what we pay (actual costs) for production items, etc.

    I do think that people often take advantage in some situations because of the poor example set by management and bosses. If the rules are applied to only one set of employees while another breaks them constantly, it’s not just being human, it’s just following the “real” rules, not the stated ones.

    The problem comes with companies of any size that are reluctant to actually spend what it costs to send people on the road, and who want those folks to assume some of those costs, either outright or by forcing them into tough situations in their choices of flights, hotels, cars and food.

    If you can’t afford to put people on the road, then don’t send them.

    Educate your staff on how to cut travel costs (flights, car rentals, etc.) but don’t expect them to risk their lives, or travel on their downtime just to save the company money. A company can’t have it both ways: Mandating the cheapest flight, then expecting a person to give up a weekend (unpaid) to travel. Uh-huh.

    If you’re fair and reasonable with employees, they will be the same. Those that aren’t? Bye-bye!

  11. Having worked as an accountant in small businesses, huge corporations, and even the Federal government, I can honestly say that many employees are not frugal with their company’s money. Over and over again I have seen waste and sometimes out and out stealing where employees would falsify expense reports or take kickbacks from vendors in order to “close” a company deal. Another area that I have seen is where employees use hours of company time daily to pursue their social networking and shopping pursuits. As far as I am concerned, that is a form of white collar crime.

    On the other hand, there are indeed some honest employees that are more careful with their employers money than their own. Alas, many do not receive acknowledgement or promotions for such behavior which is too bad.


    • Gaye – I agree that across most sectors/industries employees are not nearly as fiscally responsible as they should be. My experience in Corporate America and Startups has confirmed the same. I disagree however with you point that employees using social networking tools while on the job should be penalized. Unless you are in an hourly job, salaried workers are paid for the output of their work, not the hours they put in.

      I’ve worked with people who can complete a task in 10 hours, while others need 30.

      Focusing on the output of your work first and the time it takes to complete it second is one of the first steps in delivering high quality work.

  12. My frugal ways cover everything. When I drove the company car, I still filled it up with the least expensive gas I could find. If I bought lunch on their card, I still ordered off the value menu. I don’t understand how people’s values change based on whose money they are using…

  13. It is not that hard to continue with your frugal ways when at work. Things like organizing the best phone deal for your business, not wasting ink & paper.

    Some people, though, definitely are more blase when it comes to spending other people’s money because having control of the money gives you the feeling that you are rich and powerful.