You know both terms, but what’s the difference between frugal vs. cheap? Both relate to our relationship with how we save money, spend it and our feelings towards it. In this article, I’ll go over the difference between frugal vs. cheap, some examples of both and how you can practice everyday frugal habits to kickstart longterm positive financial habits.
Read on to learn more about being frugal vs. cheap.
Being Cheap
When Cheapness is a Good Thing
Being cheap – do you hear that phrase and immediately feel a negative association with it? If so, you aren’t entirely wrong. However being cheap isn’t always bad. For example, you can buy cheap items at the thrift store such as gently-used designer bags or sweaters. The items are cheap, but they aren’t of cheap quality. When you do an activity on the cheap, it doesn’t mean you don’t have a good time. For example, if you decide to pack a picnic lunch and drive down to the beach for a budget holiday, you’re doing a vacation ‘on the cheap.’ You still have a fantastic time but you save tons of money!
The Negative Side of Cheapness
While there are many ways to buy things cheap or do things on the cheap without sacrificing quality or experience, there are two main ways that being cheap is bad:
Cheap Quality Goods or Services
Cheapness can mean a often means that you’ll buy something for the lowest price possible. Oftentimes, a cheap looking item might be poor quality. A cheap sweater may unravel after 2 or 3 washer and dryer cycles. In addition to cheap quality goods, you can also pay for cheap services. By cheap, I don’t mean inexpensive or a good deal – I mean paying for a cheap manicure that looks cheap, as in your nails chip after 3 days!
People Can Be Cheap As Well
Cheapness isn’t limited to low-quality products or services. A person can be cheap as this is a way of being and doing. Cheap people not only tend to purchase low-quality products and services. Their entire mindset and relationship to money is cheap. Cheap people tend to be scared to spend money and always want to pay the lowest price with no regard to quality. The antonym for frugal is being cheap – the opposite.
Examples of Being Cheap Instead of Frugal
Not sure if you are a person is cheap? Here are some signs to help you determine the difference between being frugal versus cheap:
- Constantly worrying about the price of something without care or attention to quality
- Always relying on the other person to pay for the restaurant bill
- Always lamenting about how expensive everything is, even if he or she is paying for a quality item
- Reusing or hoarding disposable cutlery
- Wearing an item of clothing until it smells bad instead of throwing it in the laundry after a couple of wears
- Consuming foods after their expiry date
- Overloading laundry loads to save money on water and/or electricity
- Refusing to turn on their air conditioning when it’s excessively hot
- Never buying gifts for a family member or friend for the sake of saving money
- Taking handfuls of condiment packages from the restaurant
- Wearing clothing with stains, holes or piling
- Refusing to use hot water or turn on the stove to save a few dollars on the electricity bill
- Always choosing to go to the cheapest restaurant and ordering the lowest-priced food and/or or drink item
- Leaving a low tip or no tip at all
- Taking excessive food samples from the store and regularly relying on them for meals
Why is Being Cheap a Problem?
While there’s nothing wrong with being frugal, worrying and complaining about money doesn’t do any good. Practicing cheap methods like the ones listed above hurt others emotionally and/or financially. Additionally, unsanitary or unsafe practices such as overloading the laundry loads can cost you in the long run.
While many people can and should avoid being cheap, keep in mind that many others have to be cheap out of necessities due to poverty. However, if you can afford to pay for things, avoid the cheap practices listed above to avoid damaging relationships and harming your health.
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Being Frugal vs Cheap
Aside from the many ways a person can be cheap or purchase a cheap produce or service, how about the positive side of saving money: being frugal?
Firstly, what’s the difference between frugal vs. cheap? Easy. Frugal people not only care about price, but they also care about value. A frugal person doesn’t mind paying a bit extra for an item that will last longer and cost less to them in terms of finance and time in the long run. Frugal people aren’t afraid to try out different trips and tricks to get the most out of their money without cutting corners.
Let’s review the various ways a person can practice frugality.
Example: The Cost Per Use and Unit Method
One major way a one can practice frugal food shopping is to focus on the cost per use and cost per unit of an item such as a food product or clothing item.
The Cost Per Unit Example
After comparing a few different items and their prices, a frugal person will determine the cost per unit.
For example, let’s say a large brand-name box of oats costs $8.00 for 500 ml and a small box costs $6.00 for 250 ml. At first, it may seem cheaper to buy the While it may initially seem cheaper to buy the smaller box – after all the cost is lower, right? However, the cost per unit of the large box is cheaper ($0.016 vs $0.024). Therefore, a frugal person knows to buy the larger box.
While this may seem like a small cost difference, if you apply this to every single item you purchase, it really adds up over time. Additionally, when you purchase larger items, you’ll save time by going to the grocery store less. When you buy larger boxes, they’ll last longer. Frugal grocery shopping is win-win for your schedule and your wallet!
How Do I Know If I’m Frugal vs. Cheap? The Dress Shoes Example
While the cost per unit is easy to figure out, how about the cost per wear? While it’s difficult to know exactly how many times you’ll wear an item per year, you can make an estimate. Let’s say you buy a pair of cheap black shoes for $50. You wear them 40 times in 1 year. After 1 year, they wear out, so the cost per wear is $1.25 ($50 / 40). Once they wear out, you decide you’re going to go for higher-quality shoes that last 5 years. The shoes cost $100 and you wear them 200 times over the course of 5 years. After 5 years, the cost per unit is $0.50, less than half of the cheap pair of shoes!
While there is only a $50 difference between the cheaper and more expensive pair of shoes, the cost does mean you’ve saved money. Additionally, taking time to practice frugal shopping also equates to saved time – you only had to purchase the item once instead of replacing it 4 more times. You’ve also helped the environment as you didn’t throw out multiple pairs of unwearable shoes. Nicer shoes generally look better, too. You get what you pay for!
Living Within Your Means – a Core Aspect of Being Frugal vs. Cheap
Do you know what ‘living within your means’ means? It’s really quite simple. This means spending less than what you make. Furthermore, the money you don’t spend is put to good use – whether saved, spent or invested.
As human beings, it’s natural to develop envy or a desire to be like others. We are constantly presented with the latest product or service that seems so much better than the current version we have. When your neighbor or friend buys the latest gaming console, do you feel a twitch of envy and a desire to go and buy the same thing? If so, you aren’t alone.
It’s completely natural to feel like this and there’s nothing wrong with indulging every once in a while. However, if you always act on your desires to have the lates and greatest thing, you’ll be in debt faster than you can say “Treat yourself!”.
What strategies can you try to stick with a budget and practice frugality? Here are few different ideas.
30 30 30 10 Budget
The 30 30 30 10 budgeting method is a strategy where one directs a certain percentage of money towards different types of expenses. 90% of your total net income goes towards the necessities of life, and the last 10% goes towards discretionary purchases – things you don’t need to survive but are an enjoyable part of life.
Here is the ideal way to break the 30 30 30 10 budget method into their respective spending categories:
- 30% towards housing (your mortgage or rent payment)
- 30% towards gas, groceries, utilities and other mandatory bills
- 30% for investing and saving
- 10% for other expenses such as travel and entertainment
The housing percentage is flexible. If you live in a large city, you may have a larger rent or mortgage payment. If so, you can allocate 35-40% towards this category instead and take 5-10% out of investing and saving or 5% out of two of the categories of your choosing. The 30 30 30 10 budget method is flexible. Adjust it to your unique spending needs. If this method doesn’t appeal to you, try out a zero based budget template. Use either a physical or digital version to track every single dollar you make and where every single dollar goes – is it saved, spent or invested, and on what?
The Printable 52 Week Money Challenge – Kickstart Your Savings
The printable 52 week money challenge is an easy and fun way to kickstart good savings habits.
Pick a special financial goal you want to work towards such as a brand-new car or vacation. Not sure what to pick? Spend 15-20 writing down ideas in a journal. After the 15 to 20 minutes are over, pick an item you want to save up for.
Next, determine the approximate cost of the item. It’s a smart idea to add approximately 10% to the cost to account for any inflation or tax – or inaccuracies in your calculations. For example, if I want to buy a used car and my budget is $9,000, I’ll want to add an additional $1,000. The total I’ll want to save over the course of a year (my goal is to reach the 10 grand in a year) will be $10,000. Each month, I’ll save around $833 towards my goal ($10,000 / 12).
Once you’ve determined your goal, choose a printable 52 week money challenge template to help motivate you. Keep it in a visible place so you’re reminded to update it.
Do a No Spend Month
Another great way to start good saving habits is to try a no spend month challenge. This challenge involves cutting out any expenses not necessary to your survival – yes, that includes your three times-weekly Starbucks latte! 30 days of cutting out ‘fun’ purchases can help you get used to living a simpler life. However, set an end date to this challenge – don’t do extreme frugal living too long. Why? If you deprive yourself for too long, you may end up going on a spending binge – not something you want to do when you’re trying to save and build good habits. After the no spend month, set a limited budget for recreation, takeout and other fun expenses that add to your life.
If an a whole month of no spending overwhelms you, start with a no spend week – or even a Frugal Friday challenge where you cut out all unnecessary purchases on a specific day. Once you’ve masted one day or one week, try two days or two weeks. Before you know it, you’ll be a frugal pro!
Repairing Your Clothes Instead of Buying New Ones
Are you a skilled sewer? If not, why not learn how to sew and mend your clothes? This skill is extremely helpful. Instead of throwing out clothes or paying someone to repair them for you, you can do it yourself!
Additionally, sewing and mending clothes can turn into a side hustle. If you love patterns, fabric and assembling clothes, why not set up an online store on a platform such as Etsy? Selling clothes is a great way to be creative while making money in your spare time.
Even if you don’t turn it into a side hustle, learning how to repair your clothes will help your wallet and the environment. When you aren’t throwing out piles of clothes, less items will end up in the garbage – and subsequently, the landfill. Frugal and thrifty living benefits you and the planet!
Frugal vs. Cheap – Is Frugal Living Worth the Effort?
I’ve gone over a number of reasons proving why frugality is worth the effort and the clear difference between frugal vs. cheap. Frugal living takes time and effort. However, it’s absolutely worth it. Small amounts of money and time saved really add up in the long run. Once you see your savings account grow, you won’t want to stop frugal living!
A Final Word on Being Frugal vs. Cheap
Frugality and cheapness carry similar weight and meaning, but they are different ways to save money. Frugality is fine – and so is being cheap sometimes, but not always. If your cheap habits are hurting you and others, it’s time to focus on frugal habits that bring you value in the long run. If you can afford it, don’t live as cheaply as possible. Invest a little bit more money on the quality pair of shoes or dress. Over time, you’ll spend less money and your higher-quality belongings help you look and feel good. Take it slow and enjoy frugal living!
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Janita is a frugal living expert and owner of Frugal Fun Finance. With over five years of personal experience finding and trying out the best ways to make and save more money, she's eager to share her knowledge. Janita's strategies have helped her save thousands of dollars for funding investments and traveling to over 20 countries.
Janita completed training in personal finance at The University of Western Ontario and McGill University, two prestigious Canadian universities. Her expertise has been shared on GoBankingRates, Yahoo Finance, and NASDAQ.com.
