Frugal and cheap. What’s the difference? There is a clear distinction between cheap vs frugal. In this article, I’ll review the difference between frugal and cheap. Additionally, I’ll explain how frugal and simple living will benefit you in the long run, while being cheap will cost you. The tips I’ll share have helped me save thousands of dollars while still enjoying my life.
Read on to learn about the difference between frugal and cheap.
Explaining the Difference Between Frugal and Cheap
Frugal Lifestyle Defined
Simply put, being frugal means valuing your time, money and other resources. A frugal person looks at the big picture when making a purchase. He or she is happy to spend more money on a higher-quality product if it will save them money and provide better value in the long run. For example, a frugal person will be happy to spend more on a quality leather jacket instead of a cheap one from a fast fashion store.
Cultivating a Frugal Mindset
Being a frugal and thrifty person isn’t just about the practical aspects of saving money – it’s all about mindset. As I mentioned above, being frugal also pertains to your time. Frugal people understand that spending a little bit more money will save them time in the long run. Ever heard the phrase “time is money?” Time is an incredibly important asset. For example, the more time you have to invest $100, the longer it’ll benefit from compound interest. A person who starts saving $100 at age 30 will be a lot wealthier than someone who starts saving $200 at age 40.
The example of compound interest applies to frugality. Striving to become and stay frugal with your time and other resources means you’ll free them up for other ventures such as starting a business or taking on a side job. People who are truly frugal know that it’s better to spend a little bit more money on something that will help them save in the long run. For example, I’m happy to spend more money on a round-trip high-speed train ticket to and from the city center instead of paying less for a ticket for a bus that will take twice as long to get me from A to B. Why? I use that extra time to take on side jobs and increase my income.
Characteristics of Frugal Individuals
Frugal people not only value their time, but they share two other distinct characteristics: resourcefulness and creativity. Resourcefulness means finding ways to save money by acquiring stuff and spending mindfully. For example, let’s just say that your sofa wears out and you need to replace it. Instead of going out and buying a brand new sofa, you ask friends and family if they have an old sofa they no longer need. You’ll either ask for it for a low rate or see if it’s possible to take it off their hands for free. If no one you know has a sofa, you’ll peruse the classified ads and try to find a quality, used couch a fraction of the cost of the retail price. Additionally, you’ll spend time looking in thrift stores. Your last and final resort is buying a sofa brand new.
Frugal people are also creative. They’re happy to repurpose old items and turn them into something new. Even something as simple as using old t-shirts as dishrags is a way to save a few dollars. Once you integrate a large number of frugal living habits into your life, you’ll be well on your way to saving hundreds, if not thousands per year!
What Does It Mean to be Cheap?
Thinking Short-Term versus Long-Term
Now that I’ve covered the definition of frugality, what does it mean to be cheap? Cheapness means saving money at all costs. A cheap person will try to get the lowest price or the best deal on something even if it won’t last as long. Cheap people think short-term. For example, cheap people will frequent fast-fashion stores to buy both the latest trends and staple items. These staple items may only last one season before they need to go out and replace the items.
Being Cheap is a Mindset
A cheap person has a scarcity mindset. Millions of people around the world cannot spend money on quality products and must buy cheap products due to limited income, so I’m not referring to them. Cheap people can spend more money on quality items, but simply choose not to. They have a sense of fear of departing with their hard-earned cash instead of understanding that the items they purchase or services they use will bring them value.
The Downsides of Being Cheap
Spending More Money Than Necessary
The first and most obvious downside to being cheap – wasted money! Cheap items are often defective and of subpar quality, which means they’ll need to be replaced more often, costing you more in the long run.
Wasted Time
There are many downsides to being cheap. A cheap person will spend a lot of time needing to replace worn-out items. For example, when I was just starting out in the working world, I was getting used to budgeting when living on my own. I developed a mild scarcity mindset and wanted to spend the least amount of money I could on kitchen items, so I headed over to IKEA and bought the cheapest pots and pans. I have nothing wrong with IKEA – it’s a great place to find some fantastic items that will actually last you a while. For example, I’ve found some great rugs and lamps there! However, not all items are built equally. Within three months, those pans had worn out and I had to go and replace them.
Strained Relationships
Being cheap can cost you your relationships. If you’re continually declining to go out for drinks or a movie simply because you don’t want to spend any money, your friends may invite you out less. While there’s nothing wrong with being frugal in the way of reducing your non-essential spending, completely refusing to spend money is a new level of cheap.
If you are dating someone who wants to go out for dinner regularly but you’d rather just stay in, it can put a strain on the relationship. Spending even just a little bit of money is a way to show appreciation for the people you love by gifting them with flowers, jewellery or a vacation. Refusing to spend money on things because they’re too expensive even if you can afford them can show someone else you don’t value your relationship – even if you mean well and just want to save money for the both of you.
Contributing to Environmental Waste
Since a cheap person often needs to go out and replace items, the old items will end up in the trash. Many old pieces of junk cannot be recycled and end up in the landfill. While it’s my personal belief that corporations are responsible for the majority of environmental destruction, we all have a part to play. When you buy higher-quality items, you’ll end up tossing less junk in the trash!
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Frugal and Cheap: Choosing Frugality
Now that I’ve covered the difference between frugal and cheap and why being frugal is important, let’s get into:
- The advantages of being frugal
- Some practical tips on how to be frugal but not cheap
Advantages of Embracing a Frugal Lifestyle
There are many different benefits to adopting a frugal lifestyle. Aside from saving money, frugal people can:
- Enjoy the sense of satisfaction that comes with finding lower-cost alternatives to more expensive choices – for example, making homemade cleaning supplies that are both cheaper and better for your health
- Have fun planning creative and frugal travel getaways
- A sense of peace that comes with being more financially stable
- Consuming healthier foods – being frugal often means reducing takeout and restaurant dining spending, both of which are usually less healthy than cooking at home
- Reduced stress and pressure to increase your income – living simply and frugally means you’ll avoid lifestyle inflation and the pressure to continually increase your salary. Oftentimes, a larger paycheck means a more stressful job with more hours.
- An increased appreciation for simpler living – learning to enjoy low-cost or free activities. When I forced myself to focus on low-cost and free alternatives, I developed a greater appreciation for what I already have in life. For example, when I started hosting game nights and dinner parties instead of always going out for dinner and cocktails, I had fun bonding with friends without spending a lot of money.
Tips for Embracing Frugal Living
Below are my top tips on embracing frugal living. These practices have saved me thousands of dollars per year!
Frugal Lifestyle Tips
Savvy Shopping
Before you go to the mall, ask yourself if you can get the item for free or cheaper somewhere else. For example, let’s say you want to buy new utensils. Do you know of a family member or friend who has some extra lying around in their basement they’re happy to gift to you for free? If not, move on to the next option that’s the cheapest – buying secondhand. Check your local thrift store to see if there are forks, knives and spoons you can pick up for a fraction of the cost of buying retail.
Renting Instead of Buying
If your son or daughter has a school dance coming up, you’ll need to help him or her buy formalwear. Instead of buying brand new, check to see if you can rent a dress. Alternatively, visit a factory outlet or thrift store to find dresses. I found my 8th grade graduation dress at a department store warehouse that was a fraction of the cost of buying at the regular department store.
Meal Planning and Cooking
Meal Planning
Before you go to the grocery store, go through your cupboard, fridge and freezer and commit to using items that are close to expiry. Additionally, go through your leftovers and commit to using them before they go bad. Next, create a meal plan for all your meals for the upcoming week.
Grocery Shopping
Before you go to the store, use an app such as Flipp to compare the price of the same item at multiple stores. Take the time to visit each store and pick up the cheapest item at each respective one. Bring a list to the grocery store and commit to making only one shopping trip per week. This way, you’ll minimize the temptation to spend on items you don’t need. If you pass by the snack aisle 1 time per week instead of 3, you’ll be a lot less likely to throw that bag of chips in your cart!
Cooking
Cook meals in bulk and portion them into containers so you have meals ready to eat after a busy day.
Minimalism and Decluttering
Commit to decluttering your home. When you have a clean space to live in, you’ll be a lot less likely to lose items. Lost items often mean unnecessary trips to replace those items that are often just lying under a pile of other junk.
Commuting Frugally
Instead of taking a car to work, do you really need one? Consider taking public transportation instead. Taking the metro has saved me an average of $800 per month. Also, consider getting a job that lets you work from home for some or all of the time.
Frugal Home Management
Wash your clothes in cold water instead of hot water. Additionally, consider hanging your clothes to dry instead of putting them in the dryer. Both of these frugal practices have saved me nearly $100 per year on my energy bill.
Health and Wellness Tips for Frugal People
Do you use your gym membership that often? If not, consider getting rid of it and doing home workouts. Anything from yoga to stair workouts are free and fun alternatives.
Conclusion: Navigating the Difference Between Frugal and Cheap
There is a clear difference between frugal and cheap. It can be easy to slip into cheap territory. However, with some careful planning, it’s easy to be frugal while still enjoying your life. Have fun saving money and feeling the sense of satisfaction that comes with it. If you’re feeling ambitious, go even further and try out some extreme frugality practices. Just be sure to find balance!
Additional Resources When Understanding the Difference Between Frugal and Cheap
Recommended Reading
- ‘Frugal vs. Cheap’ article by Frugal Fun Finance
- ‘Being Frugal and Thrifty’ article by Frugal Fun Finance
- ‘Signs a Person is Cheap‘ article by Frugal Fun Finance
- ‘Frugal Living Comprehensive Guide‘ by Nerdwallet
- The Difference Between Frugal vs. Cheap, Thrifty and Stingy article by Walletmoth
- ‘127 Easy Frugal Living Tips to Try Out‘ article by Walletmoth
- ‘The Major Differences Between Frugal and Cheap’ article by Believe in a Budget
- ‘Frugal vs. Cheap’ article by How to Money
- ‘The Cheapskate Guide: 50 Tips for Frugal Living Guide‘ article by Zenhabits
- ‘10 of the Best Budget Templates and Tools‘ article by Clever Girl Finance
Financial Planning Tools
- Free Net Worth Calculator by Nerdwallet
- Free Budget Spreadsheets and Excel Templates by Nerdwallet
- YNAB app
- Goodbudget app
- Honeydue budgeting app for couples
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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.
