The Difference Between Cheap and Frugal

I think there is a real difference between being cheap and being frugal. The difference might be small, but it’s there. I don’t mind being called frugal- but I wouldn’t say I like being called cheap. And believe me- I have been called cheap many times.

“You can afford it, don’t be so cheap- live a little- just put it on finance” is what people had told me when I confessed that it would be handy to have a ute for the odd job at the weekend. It does scare me to think that putting things on finance is such a normal thing these days- and that I was cheap for not thinking finance was an option.

The reality is that I could afford a Ute if I sold some of my investments- or raided my emergency fund- but the money is better utilised elsewhere rather than sitting in a vehicle that I would use occasionally.

Cheap=Price, Frugal=Value

My definition of cheap is someone who tries to spend as little as possible, regardless of what they might be spending on. A frugal person is someone aware of their finite amount of money and time and then tries to get as much value out of it as they can.

I think that when you are cheap, you only focus on the price of something. How much does it cost, and can I get it cheaper elsewhere. And I think that when you are frugal, you focus on the value of something. And not only the value in terms of money- but also time and quality.

If you are cheap and want to buy a certain object or product, you might do a google search and see that it’s marginally cheaper at a store on the other side of town than at your local store. If you are cheap, you will probably drive across town- whereas if you are frugal- you might think that if this object really provides value- and you value your time- you will probably buy it locally rather than waste the time driving there and back, and factor in the cost of getting there.

Everything is overpriced if you are cheap

When you are cheap, everything seems like it is overpriced. Frugal people probably feel the same, but don’t voice their opinions as much- rather they show their opinions with actions. Cheap people will always seek out the cheapest option available regardless of actual value.

Cheap people don’t pay for Necessities

Cheap people can end up not paying for necessities. There was a time that I was cheap and wouldn’t pay for any heating over winter. Harden up and just put on more clothes, or get a blanket. Heating is for softies; look at how much money I can save by being cheap.

Now, I’ve come to realise that you need at least some heating over winter. But because I’m frugal, the temperature setting on the heater is not set to a tropical sauna. It’s set to a reasonable temperature- not high enough to forget it’s winter, but only just to takes of the edge of the cold.

The main point is that just because something is less expensive does not necessarily make it cheaper if you consider other factors.

Here are some reason examples where I think I’m being frugal over being cheap.

  • I bought a quality non-stick frying pan over buying a cheap one and replacing it every few years once it lost its non-stickiness, which I experienced when I was flatting.
  • I buy quality tools rather than the cheapest available. Not only do quality tools last much longer- they generally come in better storage systems so that you don’t lose anything- which again improves the lifetime of a toolset.
  • I buy energy-efficient LED bulbs, which are more expensive than the cheaper incandescent bulbs.
  • I’ve installed energy-efficient, more expensive heat pumps rather than buying cheaper electric heaters.
  • When I want something new, I generally try to think about what I already have and how I should be grateful for that. Generally- after thinking for a minute, I realise I don’t need the newest fancy thing.

There’s no real way of knowing if I am cheap or frugal. After all, I am looking from the inside out. You might think that I am cheap, while I think I am frugal. So there is a bit of subjectivity involved in the terminology.

To summarize, being cheap is about spending less or not spending anything; and being frugal is about prioritizing your spending so that you can have more of the things you really value. Those who are cheap can often be afraid to spend their money. They can also be willing to sacrifice quality, value and time in order to cash in on some short-term savings.


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1 thought on “The Difference Between Cheap and Frugal”

  1. I like your quote ‘A frugal person is someone aware of their finite amount of money and time and then tries to get as much value out of it as they can.’ I think it is the best way to describe the term frugality that I have come across so far.

    I am also on my own FIRE journey (although without a blog). Have been wanting to connect with others like yourself based here in NZ and have a group where we can support each other as peers (like a meetup group). If you’re keen to connect, please drop me an email – as per my details below

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