Quit Being Cheap and Start Being Frugal
Before we even get into this topic, I want you to honestly ask yourself if you know the difference between cheap and frugal and which category do you put yourself in?
Unfortunately, most people confuse someone’s frugalness for being cheap when in reality they are just making conscious spending decisions for their personal goals. Being cheap is about counting every dollar and cent, and I mean down to the penny (talking from personal experience here). Frugal is all about knowing how much money you have and spending it according to what you truly value versus what you simply want. Yes, you still track and get deals but you are not obsessive.
Here are some examples:
I shop at Aldi for my groceries. For those that don’t know, Aldi is a discount grocery store and in most people’s eyes, cheap people shop there. While I do have the ability to shop somewhere more expensive, for instance, Whole Foods, I just don’t value that. It doesn’t make me cheap that I shop at Aldi, nor does it make the person who shops at Whole Foods bad with their money. All it means is I would rather save some money on groceries and use it for something I value more, like a round of golf. The person that is shopping at Whole Foods is most likely saving money in some other area of their life.
Being frugal is all about weighing your options. Do you want that coffee every morning or do you want that money for going to the movies? There is nothing wrong with drinking a cup from McDonald’s. It doesn’t make you cheap, it doesn’t affect anyone else, it is just a conscious spending decision.
Cheap, on the other hand, would be ordering something at a restaurant that you don’t really want when what you do want is $2 more. How much is that extra $2 really going to hurt you in the future? News flash: IT’S NOT.
Being cheap is exhausting, a waste of time, and it will affect the people around you. No one wants to go out with someone who sends them a Venmo request at the end of the night for the exact amount they owe for a drink. Life isn’t all about dollars and cents, and having a long-term point of view will make your life more enjoyable.
I could go on and on with examples, but luckily Ramit Sethi, author of the book, I Will Teach You To Be Rich, came up with this brilliant chart to help you distinguish the difference.
Cheap |
Frugal |
| Cheap people care about the cost of something. | Frugal people care about the value of something. |
| Cheap people try to get the lowest price on everything. | Frugal people try to get the lowest price on most things but are willing to spend on items they really care about. |
| Cheap people’s cheapness affects those around them. | Frugal people’s frugality affects only them. |
| Cheap people are inconsiderate. For example, when getting a meal with other people, if their food costs $7.95, they’ll put in $8 knowing very well that tax and tip mean it’s closer to $11. | Frugal people know they have to pick and choose where they spend their money. If they can spend only $10 on lunch, they’ll order water instead of Coke. |
| Cheap people make you uncomfortable because of the way they treat others. | Frugal people make you feel uncomfortable because you realize you could be doing better with your money. |
| Cheap people keep a running tally of how much their friends, family, and coworkers owe them. | Some frugal people do this, too, but certainly not all. |
| Because of the fear of even one person suggesting they spent too much on something, cheap people are not always honest about what they spend. | Neither are frugal people. |
| Cheap people are unreasonable and cannot understand why they can’t get something for free. Sometimes this is an act, but sometimes it’s not. | Frugal people will try as hard as cheap people to get a deal but they understand that it’s a dance, and in the end, they know they don’t intrinsically deserve a special deal. |
| Cheap people think short term. | Frugal people think long term. |
How do you feel now? Are you cheap or frugal? Are there areas in your life you could maybe cool it with the penny counting and enjoy it more? Let me know below!