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The comparison of a frugal versus cheap lifestyle is in order as there tend to be some misconceptions.
You may have wondered to yourself – “Am I exhibiting frugal or cheap behaviors?” and are wanting to investigate further.
You have come to the right place.
Today, I will give you my view on frugality, the distinct differences between being frugal and cheap, and the overall mindset of both ideas.
A View of Frugality
In my view, the term frugality describes living below your means, practicing purposeful spending, and prioritizing savings.
Although I don’t agree with everything Dave Ramsey has to say. I agree wholeheartedly that every dollar should have a name.
By name, I mean the money gets allocated to different categories to get the most use out of your hard-earned money.
Every paycheck provides a finite amount of money.
Each time payday arrives and the funds hit your bank account, it gets put to work in a number of ways.
This can include paying bills, infusing cash into an emergency fund, funneling contributions to long-term investments, donating to charities…and so on.
The key to frugality is that it lends itself to the process of saving money. When you live below your means you are being more mindful of how that money can be put to good use!
This process of increasing savings necessitates reducing elsewhere, namely expenses.
In order to reduce expenses, oftentimes, we have to make a decision on how to cut those costs, as some methods may be more drastic than others.
Frugal versus Cheap
Frugality is NOT the same as being cheap.
You may have witnessed the terms frugal and cheap being used interchangeably.
Other than sharing some of the same characteristics, they differ in many ways. Let’s explore a few situational examples to provide a clearer view of the two terms.
» routinely going to dinner with a friend and expecting them to pay
» expecting to get a deal on things and settling for subpar items for a good price
» seeking the lowest price – always
» shamelessly re-gifting or gifting used items
» showing up at the potluck without a dish
» worrying about how you are going to stretch each and every dollar to an unnatural extent
» eating out with friends less often or inviting friends over for home-cooked meals
» willing to pay a premium for items that are of good quality
» seeking value for the money – mostly
» purchasing gifts well ahead of time to avoid going over budget or crafting do-it-yourself (DIY) gifts, if you have a creative side
» bringing a yummy cost-effective dish to the potluck, like Hearty Crockpot Beef and Veggie Soup or Stuffed Bacon Cream Cheese Chicken which can be adjusted in size and cost depending on the size of the group
» allowing for money to be spent in areas that are important to you by putting a name to your dollars
The main idea behind the distinction between cheap and frugal is the underlying mindset that drives each of the approaches.
The cheap mindset emphasizes the intrinsic value of money in and of itself. This approach would have one believe that money is to be collected and that great pains should be taken to keep it. This is a short-term mindset as there is no end goal.
On the other hand, the frugal mindset emphasizes the money as a means to an end. It is not the money itself that is valuable, but rather the items or experiences that it makes possible.
From this perspective, it is not a “crime” to spend money as long as there is value behind the expenditure. This is a long-term, goal-oriented mindset as frivolous expenses of the present are sacrificed for the more valuable expenses of the future.
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Keeping Your Friends
This section is for the people who are curious as to why it’s easier to keep friends when you are frugal and not cheap.
One of my beliefs is that a genuine friend is there for you through thick and thin. Generally, you find this characteristic most often with family members – because you can’t get rid of them, right?
But to find a friend that will still be there when you decide to live a cheap lifestyle may be a task unto itself.
This is why it’s more socially acceptable to be frugal and not the annoying cheap friend.
Because frugal behaviors generally don’t affect your friends and cheap behaviors do.
For instance, if a frugal friend shows up to dinner, they pay for their portion, and heck they may pay for yours too.
Alternatively, with a cheap friend they may show up to dinner and end up embarrassing you by doing a number of things to keep their end of the cost down – to the point that it’s not enjoyable to be around them.
This discussion is certainly not a one-size-fits-all approach.
There may be a time in one’s life in which being cheap is a necessity to survive.
I know, I have been there.
In time, these views may shift, and enhance the ability to live a more fulfilling life. Implement what works the best in your life at the current time, because this is a very personal decision that only you can make for yourself.
Read more about my mission HERE.
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What are your thoughts on my take on frugal vs. cheap? Share your input in the comments below!