Many people are confused with the difference between frugal and cheap. Being frugal means making smart spending choices or getting the most for your money. Cheap while on the other hand, is looked more upon as selfish and stingy. When I looked up the synonyms for frugal, I got thrifty, chary,
provident, careful and economical. Synonyms for cheap resulted in stingy, shoddiness, inferiority, showy imitation, complete unworthiness.
Living well for less money is frugality. Leeching off of people to get by is cheap.
For example, I want to get a book for my brother for his birthday. Say I saw a nice book in new condition at a garage sale and I only spend $1.00 opposed to the $24.99 price at Barnes and Noble. Some people would see this as being cheap, only spending a dollar for a gift, however if this is something that my brother would like, it doesn’t really matter how much I spend. There is no point in spending more for the gift if I could get something the person would like just as much for a lot less. Now this kind of giving is just good money management, it’s not being cheap.
Some more example of frugal vs cheap:
- Frugal - Going to a buffet and eating enough to get full and satisfied.
- Cheap - Getting full and satisfied, then filling your pockets and bags before leaving
- Frugal - In a group, a person with 10 dollars would order at a restaurant taking in consideration of tip and tax.
- Cheap - In a group, a person with 10 dollars would order 10 dollars worth of food and intentionally leave the tip and tax for others to pay.
- Frugal - Satisfied with only spending a dollar on a kids meal for your child.
- Cheap - Ordering an extra kids meal for your self to avoid the regular price.
- Frugal - Deciding not to go out to eat because you don’t have enough for the food + tips, instead you go to buy something to make at home.
- Cheap - Intentionally going out to eat when knowing you don’t have enough to tip.
Important note: frugality is not just for those who are on low income. Take Warren Buffet for example. Big Warren, with a net worth of more than 42 billion dollars still live in the house he bought more than 40 years ago at $31,500. He also prefers a burger and a coke over an expensive lunch at his desk.