The comparison of a frugal vs. 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 want to investigate further.
You have come to the right place.
Get ready for these quick points:
- common view on frugality
- distinct differences between being frugal and cheap
- overall mindset of both ideas
Frugal vs. Cheap Mindset: What’s The Difference?
Common 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 do 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’re 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, one has to make a decision on how to cut those costs.
Some methods may be more drastic than others.
Frugal vs. 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 almost everything 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
→ allowing for money to be spent in areas that are important to you by putting a name to your dollars
The Frugal vs. Cheap Mindset
The distinction between frugal and cheap 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 displays a short-term mindset as there is no end goal.
Alternatively, the frugal mindset emphasizes the money as a means to an end.
It’s not the money itself that is valuable, but rather the items or experiences that it makes possible.
From this perspective, it’s 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.
Related frugal articles:
- A Woman’s Guide To Frugal Fashion
- Frugal Living: 14 Practical Tips To Save Money
- Save Money: 30+ Ideas To Trade Spending For Productivity
- Living a Simpler Life: My Mindset, Money, And Goals
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’ve 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!