Being frugal isn’t always easy. A lot of thought and time goes into making financially sound decisions. When you are frugal, your main concern is not being wasteful. If you're cheap, your only focus is on the price tag.
I recently had a conversation about the cost of cable vs the cost of streaming services and in explaining how I would never pay for cable; someone called me cheap.
Of course, I responded with “I am not cheap, I am frugal.”
Is there really a difference between being cheap or frugal?
The answer is: YES.
One is being stingy, while the other is being smart.
Let me explain…If you look up the word 'cheap' in the dictionary, you'll find that it means costing very little; relatively low in price; inexpensive
Meanwhile, the definition of frugal is economical in use or expenditure; prudently saving or sparing; not wasteful.
Being frugal isn’t always easy. A lot of thought and time goes into making financially sound decisions. When you are frugal, your main concern is not being wasteful. If you're cheap, your only focus is on the price tag.
So how do you really know if you are a frugal person or just being cheap? These are some ways you can define the difference between the two:
Are you constantly thinking about saving money? Saving money and finding ways to make your dollars stretch farther is not necessarily a bad thing by any means.
However, if you are becoming too obsessed with money and savings, or you're looking for ways to never spend, this could be a sign of being cheap.
You don’t like spending on essentials. There are some items that you just can’t buy low quality. Think mattresses, shoes, and clothing. If you have to constantly replace these items because they don’t last, or your quality of life is diminished (a bad night’s rest) it’s just not worth it.Take the time to compare items, read reviews, and look for guarantees. Rather than buying a cheap mattress that needs replacing within a few years, you would be better off spending the money on a mattress that comes with a great guarantee and waking up rested every morning.
Tipping poorly or not tipping at all. Are you that person that asks for a separate check or uses a coupon and then only tips on the reduced price? If you answered yes, you my friend, are cheap.
No one enjoys embarrassment and coming across as being cheap is embarrassing. A lot of folks who work for tips rely on that money as their main source of income. When accounting for expenses like dining out, remember to include tax and tips in your budget.
Not spending on entertainment or vacations. People who are frugal are not afraid of spending money; they just make sure that they are spending it on things they need or truly want. There are plenty of ways to enjoy a “cheaper’ night out or vacation without breaking the bank.
The difference between a frugal person and a cheap person is a frugal person understands the value of time spent with friends and family, while a cheap person’s only focus is on the money being spent and not the meaningful time spent with others.
These are just some examples of how being cheap can affect your life.
The bottom line is frugal people focus on their priorities and understanding what is worth spending their money on while cheap people focus only on spending less no matter what.
Every person is on their own financial path. It’s okay to be frugal and a little bit cheap sometimes. It can pay to be frugal in the long run, sometimes it takes a while to learn how to approach it.
