Difference between Frugal and Cheap

There is a difference between being frugal and being cheap. Being frugal and prudent is wise. Being cheap and stingy is self-centered.

Frugal people understand that paying more can mean better value. Cheap people don’t want to pay regardless of the value.

Frugal people go to Starbucks once in a while. Cheap people settle for the 3-in-1 sachet all the time.

Because of his simple lifestyle, billionaire investor Warren Buffett is branded as frugal. Your neighbour next door, who boasts that all her belongings were second hand and bought in a garage sale, is probably cheap.

Here are some differences between being frugal and being cheap:

1. Frugal people put relationships above costs. But live within their means. Have you ever gone out to dinner with somebody who didn’t mind being all sweaty and uncomfortable, didn’t mind the taste of the food, just to be able to spend the least? This is a person who has money and love it more than his loved ones, and because of his cheapness the quality of life of others, such as his wife and kids, are greatly affected.

Eating out doesn’t have to be extravagant. You can dine out in a simple restaurant with an air-conditioning system but also spend less. Or you can just eat at home, spend less, really spend time with the family and be more happy and comfortable.

2. Frugal people prioritize quality over quantity. A cheap pair of running shoes that gives you blisters is not being frugal. A cheap second hand computer that costs you hours of troubleshooting is not being frugal. A cheap bathroom scale that isn’t likely to tell you your real weight is not being frugal.

Those are being cheap. Frugal people are not obsessed with brands, but they don’t sacrifice quality to buy what is cheapest.

3. Frugal people live simply. And enjoy it. Enjoying life doesn’t have to be expensive. Enjoying life now doesn’t mean sacrificing the future.

How to enjoy life without spending so much? Be thankful of your life. Be content with what you have. Appreciate the simple things in life. Rediscover what’s important. Make people a priority. Find time for yourself. Sometimes splurge. Be in the moment.

4. Frugal people know when and when not to spend. Frugal people are wise spenders; cheap people are as often as possible non-spenders. Frugal people manage their money better than cheap people.

For example, when a frugal person and a cheap person go into an appliance store to purchase an A/C unit, the cheap person looks for the lowest priced model. That’s it, period.

The frugal person, meanwhile, also looks at performance, researched about the brands and models, minds the Energy Efficiency Rating (EER) for lower operational costs, reads customer reviews, and looks for items on sale first before buying.

5. Frugal people prioritize the necessities. Have you ever known somebody who doesn’t go to the doctor because it costs too much? Or someone who prefers to skip meals just to spend in a computer shop?

Cheap people overlook the real needs, or necessities. Frugal people prioritize needs and looks to get the best price to have them.

6. Frugal people are aware of the higher purpose. Frugal people are disciplined savers, but they are also generous givers. They believe that this life on earth is temporary and that we can’t bring our wealth in the afterlife.

They believe in giving to worthy causes, and those family and friends with real needs. They believe that every financial blessing comes from the Great Provider, and that they are only managers of these blessings.