Cheap vs Frugal: What’s the Difference?!?
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Is frugal the same as cheap?!?
I’ve been writing about money for a while, and one thing I’ve noticed is a misunderstanding of what it means to be cheap and frugal. Some people use these words interchangeably, in which case frugality is sometimes viewed as a negative.
Yes, a frugal person and a cheap person are both interested in saving money – but it’s really a different mindset. So we’re going to clear up a few misconceptions and dive into how these terms differ.
1. Frugal People Consider the “Big Picture”
When it comes to the most cost-effective approach, a frugal person considers the big financial picture whereas a cheap person might not.
The best way to describe this is with an illustration of planning a vacation. When planning a trip many people search for an affordable hotel. They might even look for a hotel away from touristy areas to save money. This isn’t a bad idea.
However, if it’s a cheap person booking the hotel, they might choose a hotel that’s significantly farther from their planned attractions – just because it’s cheaper.
The hotel might be miles away from everything, resulting in a lengthy back and forth commute. But in their mind, they believe they’ve found a deal because it’s the cheapest price (even if it’s only slightly cheaper than closer hotels). They don’t take into consideration that staying farther away means more driving.
For illustrative purposes, let’s assume this person flew to their destination. In which case, they don’t have a personal vehicle. Due to the location of their hotel, they must now rent a car for several days or get Ubers. They have to put gas in the rental car too. And if they’re visiting a city, they must pay to park the car.
So yes, they found a cheaper hotel miles away. Yet the decision to stay farther away ends up costing more.
A frugal person, on the other hand, considers the big picture when doing the math. As a result, they might conclude that staying in a slightly more expensive hotel is the cheaper option. They can possibly walk or take the subway to most places and avoid the extra transportation cost. Plus, eliminating long commutes can create a more enjoyable experience.
2. A Cheap Person Uses Price as the Bottom Line
A frugal person, however, uses value as their bottom line. In fact, this is a key difference between the two. Being “cheap” means you’re less likely to care about the quality of an item (or how long it’ll last). It’s all about the price and how much you can save.
In other words, a cheap person buys the lowest-priced item on the shelf…and there’s no convincing them otherwise. Yet, a cheap item doesn’t always last as long, resulting in frequent replacements.
Now, this doesn’t imply spending big bucks on everything. But for items that you’ll use often, if possible spend a little more and buy quality. You’ll almost always save in the long run.
A frugal person knows that you get what you pay for, so they’ll save up and pay more for certain items.
3. A Cheap Person Might Deny Themselves
This doesn’t apply to every cheap person. But for those who fall in this category, they might go as far as depriving themselves of things they actually need. They might even wear very worn clothes because they don’t like spending money.
Also, some cheap people only eat junk food because it’s cheaper – and not because they can’t afford to spend more on healthy food.
Frugal people know how to strike a healthy balance between saving and spending. They’re mindful and deliberate when it comes to spending on entertainment, shopping, and even splurges. They prioritize the things that are most important to them, and they know where their money goes.
4. Some Cheap People Don’t Value Their Time
Time is a valuable commodity. Once it’s gone you can’t buy more, so you must use it wisely.
So even though a person frugal looks for deals and they’ll wait for sales, they’re also reasonable with their time. They don’t spend an unreasonable amount of time and effort to save a buck.
For example, a cheap person might drive five miles out of their way to save $0.05 per gallon of gas ($0.70 for a 14-gallon tank), not realizing that they’re wasting gas AND time in the process.
A cheap person might also tackle a home repair that they’re not qualified to tackle (to save money). But end up spending more for a professional to fix their mistakes.
5. Some Cheap People Go to the Extreme to Save Money
Regardless of whether something is unfair or breaks the rules…it’s all about saving money with some cheap people.
I saw a TV show years ago about actions of extreme cheap people, and some of the stuff was wild. They would do dishonest and illegal things to save a few bucks. So instead of buying clothes, some would “shop” the lost and found or rummage Goodwill drop off sites. Sometimes, their entire day revolved around saving money.
One lady spent full days writing complaint letters to food manufacturers to get coupons and freebies – just to save money on groceries.
Cheap people will often complain about the price of everything, even when something isn’t expensive. And they’re some of the biggest freeloaders (like inviting friends out to eat, but rather than order anything for themselves they munch on free chips and salsa).
This isn’t to say that a frugal person can’t use unconventional methods to save money, but their savings tactics aren’t at the expense of others.