There are both positive and negative ways to save money, and the way you save can impact your friendships, finances, and more. Being frugal vs cheap makes a difference!
When you’re on a mission to save money, the last thing you want is to fall into the trap of being cheap. Luckily, there is another way to go when you’re trying not to overspend.
In the following guide, we will take a look at the difference between cheap and frugal, and why it matters.
Frugal vs cheap: what’s the difference?
The cheap vs frugal conundrum can be tricky to get your head around when you first start out. Yes, frugality and cheapness have a lot in common — they are both about saving money.
So, what’s the difference between cheap and frugal in real terms?
Being frugal is positive while cheapness is negative
The answer is that one is about saving money no matter the personal cost or the cost to those around you.
Frugality is about getting value out of your expenditure while also saving money where possible. When you choose this pathway, you can start to build real financial stability and a future in which you are as supported as you need to be.
Cheapness is about scrimping, missing out, and making those around you pay for your lifestyle choice. It is an all-around negative way to save cash.
7 ways to know if you're cheap vs frugal
Let’s get down to the specifics when it comes to the cheap vs frugal debate. Understanding what each means can help you determine which camp you’re in right now.
Don’t panic — you can always adapt your behavior to become frugal instead of cheap. Here’s what you should know to understand each of them.
1. Being frugal means being strategic with your finances
Frugality is a smart choice when you’re hoping to save money for your future. The average American under 35 only has $3,240 in savings while those between 55 and 64 have around $6,400. When you’re trying to become financially stable, you have to tighten up.
You save money where you can so you can afford the things that really matter
If you adopt a frugal approach to your finances, you will have more excess money to save on a monthly basis. That doesn’t mean going without the things that either you or your family need. Instead, it is finding ways to avoid spending needless amounts of money.
That means that when something you want to spend money on comes up, you will have the means to do it.
Becoming more frugal vs cheap in your everyday life means that you can choose to splash out on things when the occasion arises. That may mean a vacation or special gift, for example.
2. Being cheap can mean making others pay your way
Have you ever watched the show Extreme Cheapskates? The reality TV hit perfectly encapsulates what it means to be cheap.
If you choose this lifestyle approach, you will cut costs at every turn. The big problem is that you often end up getting what you pay for.
You may lose friendships if you won't ever spend money
When people are cheap, they don’t like parting with their money on any terms. For that reason, they may make the people around them pick up the bill. Sneakily having others pay for your food, drinks, and even events won’t do you any favors in the long run.
While their motives may not be completely negative, this approach to spending is not fair to other people.
Should people feel as though they are always picking up the check, they may stop inviting the so-called “cheap” person out for dinner or drinks.
3. Frugal people are selective about what they spend money on
Are you smart about how you spend your money? Do you even know where it all goes? American families spend more than $2000 a year on takeout and dining, for example.
You could cut back on that expenditure by making your lunch at home and taking it to work with you.
Frugality appreciates quality but doesn't overpay
When you are a frugal person, you look for ways to have the same quality of life without spending too much. Having a homemade lunch means that you can still enjoy a hearty meal during the workday — it just won’t cost you the earth to do it.
Being frugal is all about being selective when it comes to how you spend your money. That means that how you decide to spend it should depend on you and what you believe is important. Keep that in mind when making financial decisions.
4. Cheap people don’t want to spend money on anything
When we talk about the frugal vs cheap dilemma, there’s one thing to keep in mind. Cheap people will avoid spending money.
For instance, if your coworkers are planning a birthday meal and everyone is contributing some money, a cheap person may avoid attending even if they have the cash to spare.
Cheapness can make you miss out on life experiences
For that reason, you may find that they make excuses or avoid hanging out with people when it will cost money. As you might imagine, that can have a negative impact on a person’s life. Put simply, they miss out on a whole bunch of social events for no reason.
Often enough, this is a mindset problem. People get so wrapped up in the idea of not spending money that they will do anything to make that happen.
What many cheap people don’t realize is that this can mean that they stop enjoying small and simple pleasures.
5. Frugality is about assessing the value of the things you buy
Leading a frugal lifestyle means waving goodbye to impulse shopping. Before you purchase something, ask yourself: Do I want it? Do I need it? And can I afford it?
If you can answer yes to those questions, buying the product is a no-brainer.
Be a conscious buyer and saver
Being frugal is all about getting the best value for your money. That could mean shopping around, finding coupons and codes, or waiting until there is a sale on something you want.
The truth is that there are plenty of ways you can save money when buying things. Avoiding making those impulse buys is the first step in this process.
Each time you part with your money, be clear on the value that you are getting in exchange.
6. Cheapness is about the lowest cost, no matter the quality
Cheapness may mean looking for lower-cost alternatives to products. However, this may end up costing you more money in the long run, if the products are low quality. A massive 63% of people say that they regret buying a cheaper version of products.
When you choose to be frugal vs cheap, on the other hand, you look for things that are high quality without a huge price tag to match.
While it may take you longer to find the right product for you, you can rest assured that you have got a good deal and saved some money too.
Are you savvy when it comes to getting the best deals? You could familiarize yourself with using coupons, learn about the best time of year to buy certain products, or start saving for big purchases.
7. Cheap people focus on the short-term, not the long-term
The biggest difference in the whole cheap vs frugal problem is where you set your sights. When you are a frugal person, you think about your long-term financial future and want to build wealth. However, cheap people tend to live in the here and now, and count pennies.
Choosing to become frugal means setting your sights on the years to come. How do you envision yourself living? What financial security do you need to make that happen?
When you have answered those questions, you can start making a master plan to get you there.
Why you should aim to be frugal vs cheap
Looking for a savvy way to save money? Frugality is the answer. Choosing to make more out of your finances — while still having cash to set aside — is never a bad idea.
Now that you know what the main differences between cheap and frugal are, you can aim to become a frugal spender.
This lifestyle and spending choice has many benefits. It means that you will feel in control of your finances rather than having no idea where your money goes.
When you are clear on that, you can properly decide how and when you spend your money.
Start living frugally and notice the difference in your spending!
Take the time to consider how you use your finances and make a budget that aligns well with your long-term goals.
While you don’t want to miss out on the joys life has to offer, there are ways that you can get premium products and services without overspending.
No matter where you’re starting from now is the perfect time to get started with this new approach to money management.