Difference In Being Frugal, And Being Cheap
What is the first word that comes to mind when I say the word frugal. Cheap? If so, you are not alone. Most people tend to incorrectly associate being frugal with being cheap, when in fact they are two entirely different ways of looking at financial life. Dictionary.com defines frugal as “prudently saving or sparing; not wasteful.” The same online dictionary service defines cheap as “stingy; miserly.” But the differences don’t stop with the words’ definitions. Frugal people spend, give and consume a little differently than their”cheaper” counterparts.
Followers of frugality generally believe in being lightweight consumers of resources, whatever those resources may be. For instance, many frugal people prefer to make meals from scratch rather than paying several times for the cost of equivalent foods at a restaurant. Cheap people also frequently look for deals, but still could be heavy consumers of resources. Many cheap people will buy things on sale just because they are on sale, not because they really need them. Frugal individuals hunt for sales, too, but buy only enough to live on for the immediate future.
Need more evidence? I’ll use myself as an example. I appreciate value in a product, even if it costs more than a cheaper alternative. My time is important to me, so I’ll pay a little more for convenience items in a pinch, or shop at a nearby store to reduce the commute time to drive to another area just to save a couple dollars. I recognize good service, and am willing to tip extra to show my appreciation when I receive it. In fact, I typically leave minimum 20% tips when we dine out and receive exceptional service. After all, we don’t eat out that often, and the two or three dollar difference in 10% and 20% doesn’t change my world much, but it may mean the world to our server. I enjoy giving to help family members, friends and strangers. In fact, one of my life goals is to become so wealthy that I can play Secret Santa and give a lot of it away.
The typical cheap person generally displays the polar opposite qualities. When it comes to shopping, many cheapskates will drive all over town to save a few cents on a gallon gasoline, or a loaf of bread. These types will pass up sales on quality products because the final price is still higher than the cheaper alternative. Many would never consider tipping anything above the 10% rule, even if it meant counting out the $3.90 on a $39 bill - come folks, round up and live a little!
The one thing I have found that frugal folks have in common with cheap folks is there willingness to give, however they typically do it in different ways. Frugal individuals enjoy making monetary donations for causes they believe in, while their cheaper counterparts prefer to donate non-monetary gifts such as their time, their services, etc. Both types of givers are required for most charitable programs to be successful, so there is a place for each type, and I’m certainly not discounting the good deeds others have done without shelling out cash.
I honestly believe there is a little of each category in all of us (by “us” I mean those minding their money). I encourage you to think about ways you may be perceived as “cheap” and move towards frugality. I should take my own advice here and stop trying to buy the 1000-count cheapo napkins at wholesale clubs that my wife insists could double for sand paper. I think I’ll make her day and show up with a few packs of Bounty napkins next time I’m out (I have two coupons!).
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Very nice post.
I have been wondering about this distinction for some time now. A lot of what is passed off as frugal, is just cheap & selfish. I am relieved that you cleared it up.
I think this distinction is strongly related to the distinction between being an Idler and being a Slacker - another distinction that I have been thinking about.
Headspace may well post on the second distinction in the next few days.
Albert @ Headspace
http://thoughtsintime.co.za
[...] cogs in my head began turning this morning after reading Frugal Dad’s musings on the subject. One of the differences he mentioned was that a fugal person will pay more for something of higher [...]
I think that one of the biggest differences in being frugal and being cheap is that frugal people look at the value of things not just the cost. There are times when you might pay more for something because you get more value for your money. Cheap means saving a dollar at all costs. For example, it might be more frugal to spend $20 on a dress that is good quality than to spend $10 on one from a discount store that will fall apart after one or two washings.
I am working on leaning towards frugality, but started out just cheap
I think it is definitely a learning process!
PS- You guys should try cloth napkins- that is SUPER frugal. I find mine at the thrift store for a quarter and since we switched, we have never looked back
Wait, or is that cheap?
My wife called me cheap for years, but she’s slowly coming around to the true definition of the terms.
Frugal: Buying Sam’s Choice colas for a party.
Cheap: Serving it in tiny cups overfilled with ice.
Frugal: Buying ground beef on sale for a cookout.
Cheap: Making the burgers so tiny McDonald’s would be proud.
Frugal: Searching the internet for vacation deals.
Cheap: Staying in a cheap motel in a questionable section of town only for the price.
When frugal goes too far, I call is financial anorexia. I have a post coming up on it!
Being frugal is being smart with your money. Being cheap is just tacky! Making conscious choices about where and when to spend money is critical to financial success. You addressed this very well!
I’m glad somebody finally distinguished between the two. I’m going to have to show my other half this article so she sees I’m not cheap! Great post.
Tad
http://growingintoyou.com
I think I might be frugal most of the time…but I may get borderline cheap.
I think you’ve hit it on the head with value versus cost. It’s easy to buy the least expensive thing, but if it’s going to break in a few months what’s the point.
Good clarification!
Thanks great post and you’ve made a good distinction between the definitions. Just discovered your blog and will be subscribing.
Its always good to find like minded bloggers.
Cheers,
Andy.
I gotta join the comment party and do my part to make this great post stand out in yet another way - most commented upon.
All of you nailed it. Cheap is a big turnoff. Frugal is smart.
It’s always been a fun game I play in my mind whenever temptation/opportunity to spend money presents itself.
[...] The Difference in Being Frugal, and Being Cheap - I’ve read a number of articles on this topic, but always enjoy reading different takes on it. Frugal Dad offers his thoughts on the topic of cheap vs. frugal. [...]
Hi! Is it frugal or cheap to bring your own snacks to the movies? I took 5 kids to the movies yeaturday and we spent $45 on the tickets, and $48 on 1. Usually I bring canned sodas or juice boxes from home as well as a snack each. Is this frugal or cheap? By the way we went in the day, this was matinee price! Yikes! I did find out Tues. is $5 all day, so if we ever go to the movies again it will be a Tues., but snacks are never discounted and I can never afford $48 on snacks again (this is how much I spend on groceries weekly.) Thanks! -Becky R in NJ
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If fewer people bought concessions at movies, one of two things would happen (or both). The price of concession items would go down and the price of general admission tickets would increase, still making for a costly outing.
My suggestion? Wait for the DVD, make popcorn from home and skip the candy altogether (sugar, movies and kids don’t mix too well!). If you must get out of the house on the day movies are $5 I would recommend eating a meal at home and skipping the concession stand.
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Great piece. In my mind, the key distinctions between ‘cheap’ and ‘frugal’ are wastefulness and generosity. I really associate stinginess with cheap. Frugal people don’t have a lot but are so generous with what they do have. As you mentioned, cheap people will waste resources and do whatever they have to do to get the lowest price - it’s tunnel vision and they don’t care . Frugal people think big picture - most have high principles (e.g. even if it’s half the price as at the local mom and pop store, they won’t shop at Wal-Mart because it’s evil, etc.) and won’t compromise them to get the better deal. Most will go without or wait until all their buying criteria lines up before buying. In general, I think frugal folks are the smartest shoppers.
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thanks so much! I struggle with bringing snacks from home as being unethical. I think going to the $5 movie days and having a snack at home before or after the movie is a great idea. The movie should be enough treat for our kids.
It’s important to point out that being cheap usually costs you more in the long run than being frugal. Edwards Demming condemned companies that go with the “lowest bidder”, because what saves them a little in the short-term usually costs them more in the long-term. They may save $1000 on a project by going with the lowest bidder, but it might cost them $5000 extra in the long run to get it re-worked again and again until it’s right. Or, it may never be right…they may end up with a faulty system as their foundation, and when everything else gets built on top of it, it’s difficult to just tear out the foundation and start anew. So, a cheap decision now can cost tons in the long run. And yet, many companies make that same mistake day in and day out around the world … only thinking 5 minutes in front of their face by just looking at the sticker price.
For personal example, I used to buy some dress shirts at Wal-Mart. I thought I was saving money by getting them for $20. But, turns out they’re cheaply made, and tear up (lose buttons, threading coming undone, get torn up, look haggard, etc) in about 6 months of use. I got tired of that, but also didn’t want to shell out $50 at the mall for dress shirts. So, I went to Goodwill and got some high-quality Ralph Lauren, Geoffrey Bean, Van Heusen, etc shirts for $5/each … I’m still wearing them 5 years later and they still look brand new.
I think to sum up this topic …
People who are cheap think they’re being smart, but are really just exercising an almost knee-jerk reaction to what they’re buying. It’s pretty impulsive and usually selfish in a sense that they’re hoping to “take advantage” of someone or something to get a good deal.
People who are frugal are exercising wisdom instead, by thinking ahead, and instead of taking advantage of others, usually focus on self-sacrifice to do without things that might cost them in the long run. The money they save can then be used for more long-term goals, like buying a car, a house, or donating to a charity, instead of just burning a hole in their pocket for impulse buys.
Cheap people are reactive; Frugal people are proactive.
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Or instead of using fancy paper napkins, try using cloth napkins which tend to be nicer and can be re-used.
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you definitely ought to be using cloth napkins!
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One of my kids was being called “Stingy” just because she refused to buy overly-charged ice-cream on a field trip like most of her classmate. She told me about it and quite upset. I told her that she is just being frugal since we have a whole bunch of unopened ice-cream box in the fridge. It’s hard for the kids to distinguish the difference between frugality and stinginess but I tried my best. There is too much peer pressure nowadays, do the kids really have to suffer the spending pressure?
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