Frugal vs. Cheap: What’s the Difference?

In starting down this quest of financial freedom, one of the first concerns I had was I didn’t want to become a cheapskate. When all hands point to you and you become that person in your social circles, you’re doing more harm than good.

Of course, if you want become debt-free and fully financial independent, you have to make concessions. You can’t always have everything you want, but there are some exceptions in my mind that can keep you a frugal and not a cheapskate.

First off, to avoid debate, what does frugal and what does cheap mean? Is there a difference? The dictionary says so, but what matters is your definition. How you define frugal and cheap will help you meet your financial goals, help you avoid awkward social situations and help you make better financial decisions all around.

I’m a single female who works full-time with no one to support but myself. My level of frugality is going to be different than a large family on a single income. I have specific needs I’m not willing to make concessions on and some wants where I can. However, a family on one income may have to make larger concessions for the better of the family unit.

Some specific examples of frugality for my situation include:

  • Opting to go without cable
  • Turning off lights when I leave my home
  • Consolidating my government student loans to get a better interest rate
  • Choosing generic prescriptions over name brand
  • Selecting a movie matinee instead of going at night
  • Mending a hole in a pair of jeans that are otherwise fine
  • Spending more on a winter jacket and boots to invest in quality so I’m not replacing

Some examples of cheapness (I’m calling that a word) that I could exhibit but I do not:

  • Nitpicking over restaurant bills; if you want your bill separate, ask for it to be separate!
  • Keeping the thermostat at an unreasonable temperature when I have visiting guests: if they’re cold, it goes up, if they’re hot, it goes down!
  • Skimping on gifts for special occasions: if I need to get a gift for someone, I budget an amount and stick to it! I don’t show up to an event and not give them anything.
  • Wearing clothes that are torn, stained and tattered; I can afford to keep worn clothes in good repair, buy them secondhand or on discount. Rarely do I pay full price for any article of clothing!
  • Not offering to help others: if you can’t donate money, donate time! Unfortunately, I can’t afford 5% of my take home pay to go to charitable causes. However, I can afford to donate my time through my employer’s causes and happily do so.
  • Asking for more: a lot of people recommend that you ask for something more or try to barter to get something extra out of a deal. I do this on occasion, but I don’t make it a habit. Whether it’s a drug sample at the doctor’s office or a free giveaway at a trade show, there are some appropriate situations to ask for more and some that are not. Unfortunately, some people abuse this.

In order to separate the two, it all depends on how you choose to define frugal and cheap in your life. Minding where your dollars go is something to be admired; however, being the token friend who no one calls to visit anymore because you made a scene over the bill at the last restaurant you ate it is not.