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Our site is called Frugal For Less so we are big advocates of being frugal. What we don’t advocate is being cheap. What’s the difference? There is a big difference between being frugal versus being cheap.
What is Frugality?
Frugal people don’t hate spending money; they merely want to get the most for the money they do spend. Frugal people don’t mindlessly spend money nor do they try to keep up with the Jones’s. Being frugal does not impact your quality of life.
What is Cheapness?
Being cheap means a hatred of spending money, on anything. Being cheap can impact your quality of life and the lives of those around you. Cheap people know the price of everything and the value of nothing. We’ve probably all spent a little more than we should have on a special meal out.
A frugal person will see that as money well spent. We enjoyed the food, the wine, the company. We remember the value of that night, not the price of the meal. A cheap person will stew over the cost of that meal and that will be the only memorable thing about it for them.
A frugal person who has a leaky roof will do some research and find a reputable company that will make the repairs for a fair price. A cheap person will put buckets under the leaks.
A frugal person will stock up on the nice toilet paper when it goes on sale, maybe even find a coupon to save a little more money. A cheap person will buy the cheapest, roughest, one-ply toilet paper available.
Being Cheap Costs Money
The sad irony is, being cheap costs more money than it saves over time. Take the roof and toilet paper examples above.
It’s much less expensive to repair a few leaks in a roof than to replace an entire roof and half of what is under it when it collapses. Which is precisely what can happen when minor repairs are not addressed.
As for the toilet paper, you have to use twice as much single ply as you do double ply. Buying the cheapest option means what you are buying is not of good quality. It’s not true of everything you buy, but it’s true of many things, and it’s definitely true of toilet paper.
Thin, cheap bath towels become threadbare after a few washes. The same thing happens with cheap clothing. When you buy better quality items, you don’t have to replace them as frequently as you do the cheap things, so it saves money over time.
A more significant cash outlay up front to avoid multiple, smaller cash outlays in the future is the frugal option.
Penny Wise and Pound Foolish
There is a strange offshoot of cheapness where the person thinks nothing of blowing a lot of money on expensive things, perhaps tech gadgets or designer clothes. They aren’t entirely unaware that they need to control their spending, but they go about it in the wrong way.
Rather than cutting back on expensive clothes, they develop strange habits they think save money like washing out used paper towels and hanging them up to dry or taking excessive amounts of free condiment packets from fast food restaurants.
Saving these little picayune amounts of money does nothing to offset the overspending on expensive clothes, but somehow the person feels virtuous for their money-saving tricks.
Very few people will judge you for being frugal. Most people will judge you for being cheap. If a frugal person is making plans with a friend and the friend suggests a place that is a little too pricey, the frugal person will either decline or suggest a more affordable restaurant.
A cheap person will still go to dinner but either sit there eating free bread and water which makes the person they’re dining with feel uncomfortable or maybe worse, just sit there when the check comes, expecting to be treated.
Your Time Isn’t Free
Do you know people who make their own laundry soap or cleaning supplies? There isn’t necessarily anything wrong with doing those things. For some people, those kinds of DIY projects are their hobby. They enjoy making those things so good for them.
Some people do it because they don’t like the chemicals that are in commercially sold laundry soap and cleaning supplies. There is nothing wrong with that either. The fewer chemicals we’re exposed to, the better for our health and the environment.
But those things take time and your time is not free. If you turn down an offer to work overtime because you need to get home to whip up a batch of laundry soap, that is a poor use of your time. You would undoubtedly make more money working overtime than you will save by making your own laundry soap.
You also aren’t saving very much money. The average family spends $141.57 a year on laundry detergent. You still have to buy the ingredients to make your own and add in your time. So you put in all that effort and maybe saved $100 a year. Hardly worth it.
A frugal person who wants to save on laundry costs too would see that the real way to save is not to make your own laundry soap but to wash clothes less frequently (only things like socks, underwear, and work out gear need to be washed after each use) and to dramatically cut down on the amount of soap used.
There is no reason to fill up the cup that comes with commercial detergent. A few tablespoons are plenty.
Know Your Limitations
Being frugal means sometimes doing a little DIY. Many small home and auto repairs and maintenance jobs can be done by anyone. Fixing a clogged sink or replacing windshield wipers is nothing you have to pay a professional to do.
If you aren’t sure how to do something, find a how-to video on Youtube to walk you through it.
A frugal person will know their limitations. A cheap person might ask themselves, “How hard can it be?” and then attempt to remove asbestos from their attic or replace the cracked windshield in their car.
Well, it’s harder than you think and some things require specialized knowledge. Trying to do big jobs to save money can end up hurting or injuring you or just making such a big mess, you have to hire a professional to clean it up after you.
Doing that will cost way more than if you had just hired someone who knew what they were doing in the first place.
You’re Hurting Your Career
As we said, most people don’t judge others for being frugal, but they do judge cheapness. Being cheap in certain social situations can hurt you. You may refuse to join your co-workers for their weekly lunch because you think eating out is a massive waste of money. But it’s more than eating that takes place at those lunches.
People are networking and talking shop and building closer ties. And you’re not part of it. Refusing those lunch invitations can hurt your chances of advancement at work. They don’t know you don’t like spending money; they think you don’t like them.
You might be seen as not a team player, and while that’s an annoying buzzword, it matters in your career.
The frugal person may also agree that spending money going out for lunch at work isn’t the best use of it, but they see the bigger picture. So rather than turning down an important opportunity to socialize with co-workers, they will just cut back somewhere else and accept the lunch invitations, at least once in awhile.
And Your Love Life
No one wants to feel like the person they’re dating is only after money, but if you are cheap in your dating life, you’re going to have a rough time attracting a partner. By no means do you have to spend tons of money to have fun, exciting dates that will impress a potential partner.
But if you are the kind of person that uses a two for one coupon on a first date or insists on going out to dinner before the sun has even set because the early bird special only lasts until 6:00, you are not going to get many second dates.
Displaying financial cheapness to a person who doesn’t know you yet can be a red flag that you are cheap in other areas of your life. That you are also stingy with compliments or affection or your emotions. Those are not qualities any of us want in a partner.
And Your Social Life
Being cheap isn’t a great way to attract and keep friends either, and it gets harder as you get older. When you’re all broke college students or recent grads working entry level jobs, you can disguise your cheapness amongst everyone else’s frugality.
None of you have lots of money to spend, so everyone is more or less on the same page. You’re not going out to dinner a few times a week or meeting at happy hour every day after work. You’re ordering a pizza and playing board games. Great, a cheap night and everyone had fun.
But when you all get a bit older and start making some more money, you understandably want to loosen the reigns a bit and enjoy the fruit of your efforts. Everyone but you that is. So you’re sitting there eating the free bread while everyone else has appetizers, main courses, and a few drinks.
Or you’re the one insisting on splitting the bill to the last penny when everyone had more or less the same things. Or you just refuse to ever go out with your friends because you’re home checking your Mint account for the tenth time that day.
Eventually, your friends will get fed up and just stop asking you to do things with them. So you’ll have all the time in the world to sit home alone counting your money Scrooge style.
Finding the Balance
No, not your bank balance. We’re aware that you already know that. We mean finding a balance between being frugal and being cheap.
What Are Your Priorities?
We all have things in life that are important to us, but we also have a limited amount of money. Frugal people have a good sense of what their priorities are and are willing to spend more money on those things and cut back on less important areas.
Maybe you have a friend who is always going on vacation. You see their social media posts from exotic locations around the world and wonder how they do it because while you don’t know the nitty-gritty details of their finances, you know they don’t have a career that brings in six figures.
So how are they affording all those trips? Think a little about the rest of their life. Maybe they drive a 15-year-old car and still live in an apartment when all your other friends are buying houses. They go out once in a while, but they don’t come to Happy Hour every Thursday.
Travel is that friend’s priority, so they spend what money they do have on that rather than new cars, big houses, and going out every week. Decide what your priorities are and structure your budget to support them.
Make Meaningful Changes
Wanting to save money is a good thing, but you want the ways you save money to be impactful. Reusing every sandwich bag isn’t going to do much for your bottom line.
Things like moving into a less expensive apartment, continuing to drive your ten-year-old car that still runs perfectly well rather than trading it in for a brand new car, or maxing out your 401k contributions, at least enough to get the match, are ways to save real money.
Be Generous in Other Ways
Spending money on another person is indeed one way to show generosity, but it’s not the only way and not necessarily the best way. Planning an inexpensive, thoughtful date is more meaningful than just taking someone to an expensive restaurant.
Offering to spend time and listen to a friend who has recently lost a loved one is more meaningful than sending flowers to the funeral. Donating your time to a charitable cause that you care about is just as impactful and perhaps even more needed than just donating money.
Explain Your Situation
You may have reasons for being cheap that have nothing to do with being miserly and ungenerous and you may really not see how some of your behaviors look to other people.
Cultural norms may be one reason. People raised in other countries but now living in the US may have behaviors that seem cheap to those born and raised in the US. Those behaviors aren’t wrong, just different.
Some people may have grown up in real poverty, and no matter how much money they accumulate, they are so afraid to ever go back to being poor, they just can’t stop those behaviors.
Some people may have grown up in relative comfort but their parents did not, and the behaviors of the parents have been handed down to the children, maybe even unintentionally. Like many of our habits and behaviors, we learn them from our parents and families.
If any of these things sound familiar, explain them to those around you. Most people will be understanding. Maybe even ask the people closest to you to gently and privately point it out when you are “being cheap.” Bad habits can be unlearned just as new habits can be learned.
You Can’t Take it With You
It’s an old cliché, but you really can’t take your money with you. It’s admirable that you want to have a comfortable retirement or pay for your children’s educations, or whatever financial goals you have.
But blind accumulation for nothing more than the sake of accumulation is not a healthy financial goal. No one who has reached the end of their life wishes they hadn’t taken that vacation or gone to that concert or had that special dinner.
Money is supposed to be a tool that you use to enjoy your life. You worked hard to earn it, and maybe you worked even harder to save it. As long as you are meeting your financial responsibilities, you are allowed to enjoy some of that money.
So by all means, continue to be frugal. We have devoted an entire website to help you do just that. But know where the line between being frugal versus being cheap is and try, at least most of the time, to stay on the right side of it.