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The difference between frugal and cheap

Ylan Mui

In the past two months that Nancy and I have been writing this blog, I've thought a lot about the difference between being frugal and being cheap.

I'll keep it real: I was not frugal before my husband and I bought our house and the recession threatened our income, jobs and retirement. I routinely pulled cash out of the ATM only to wonder a day or two later: Where did it all go? Coffee, lunch, happy hour, Ann Taylor Loft -- my money just seemed to disappear.

Now that I'm trying to reform my spendthrift ways, I wrestle with the value of my discretionary purchases. Is skimping on a friend's birthday present being frugal? Or is that just cheap? What about insisting on only paying for your meal when dining out with a large group of people? Frugal or cheap?

Since I'm new at this, I decided to get advice from some of our favorite bloggers. Here are their thoughts on the difference between being frugal and being cheap. Share your thoughts with me via e-mail or just leave them in the comments. I'll post the most insightful ones!

David Weliver of MoneyUnder30.com: In a nutshell, I would define being frugal as protecting your hard-earned money by looking for ways to save on the things you need and want and getting the highest value from everything you buy. I would define cheap as spending as little money as possible, whatever the cost.

For example, somebody who is frugal would probably buy a used car instead of a new car, but they would choose a high quality vehicle and choose to maintain it properly even though that maintenance costs money. In the long run, they know that maintenance will save them from needing to buy another car too soon. Somebody who is cheap would look for the least expensive car without regard for quality, and they might choose not to spend money on maintenance. Both methods save money, but the frugal car-buyer will get a lot more value out of the vehicle thanks to their decisions. The cheap consumer might wind up with a car that breaks down on them once a month. Sure, it may not have cost a lot, but it also might not provide reliable transportation.

Julia Scott of BargainBabe: Being frugal is making choices to conserve money in your own life: riding a bike instead of driving, renting a movie instead of going to the theater, brown bagging your lunch instead of buying it.

Being cheap is forcing your frugal choices on others: buying a gift on sale even though it is the wrong size for the recipient or insisting on ordering the cheapest bottle of wine at a restaurant.

Being frugal feels good. Being cheap leaves a bad taste in your mouth (and it ain't the wine)!

By Ylan Mui  |  June 1, 2009; 7:00 AM ET
Categories:  Faces of Frugality , Ylan Q. Mui  
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Comments

Unfortunately, not everyone has the luxury of opting for frugal over cheap. If you don't have the money to buy a friend a nice gift, why not take her out for coffee (we know it won't be a guy expecting a birthday gift) and just spend time together. If she's really a friend, she'd rather have you than an expensive sweater in the right size anyways.
And dinner? Make your expectations clear ahead of time. Anyone who doesn't know the weight of "I'd rather just throw in my costs, money's a little tight these days" can afford to pick up your tab :) Seriously though, if you're deliberately ordering just a salad with a tea because of costs and not menu preference, the 7 wine drinkers at the table should man up and respect that.

Posted by: capecodner424 | June 1, 2009 8:36 AM | Report abuse

I like Ms. Scott's definition -- that's how I've always thought of it.

For me, it's about looking for value. My husband and I call it "the knee of the curve." You know those graphs where the line starts out on a gentle upslope, then at some point shoots straight up? That point right before it shoots up is the knee of the curve. Financially, that's where paying more money stops getting you noticeable improvements in quality.

My kitchen is actually a bad example for a column about frugality, because it was a real splurge (and I'm normally WAY cheap), but it does illustrate the principle. Long story short, we bought a house with a he**-hole of a kitchen (we're talking formica held together with masking tape); but because the house was WAY cheaper than everything else we were looking at, it seemed like a fun opportunity to design my own dream kitchen. Because I cook (a lot), and because we hope to be here forever, we decided to splurge on pro-style appliances.

Then we went shopping, and I couldn't bring myself to pull the trigger! A 48" range was $9K+!! A 48" fridge was $7K! Even though we could afford it, it still seemed ridiculous.

So I tried to maximize value for the money. First, I decided to reserve the "pro-style" brands for where it mattered: the range. Then we looked for ways to get the same functionality for better price. Turns out a regular side-by-side fridge with a separate mini-fridge actually gets you more storage space than the 48" model, for less than half the price. For the range, I realized that a 36" range and side oven would give me all the space I needed for those big dinners. Add in the $1K saved from the smaller range hood, and again, the whole thing cost about half our original plan. End result is I still have a kitchen I'm looking forward to cooking in for the next 20-30 years, but chopped the appliance budget in half.

Posted by: laura33 | June 1, 2009 9:16 AM | Report abuse

IMHO, frugal is about getting the bets value for your money (and trying to spend less of it in the process). Cheap is when you save your money at the expense of others. Be it buying the wrong size sweater on sale or loading up on ketchup packets from a buisness. Cheap is when someone else pays for you to save money.

There is a correlary to cheap, when you physially suffer to safe money. Like I think we are being cheap when we haven't replaced our air conditioner. At the moment, we aren't suffering, but come July I know we will regret it. Yet we can't ante up and spend the $5k we need to (we have it, just its too painful to spend that much in a chunk)

Posted by: rubytuesday | June 1, 2009 9:58 AM | Report abuse

I'd say part of being frugal is not crafting ingenious justifications to spend rafts of money on opening one's pores:

http://www.doublex.com/section/news-politics/how-your-pedicure-could-end-recession

Posted by: Lindemann777 | June 1, 2009 10:35 AM | Report abuse

Here's an example of frugal versus cheap: At the store, there are typically several varieties of salt. I bake my own bread (which, it will be noted here, is far, far cheaper than buying it, takes a negligible amount of time with a bread machine, and results in me having tastier bread. But that is not my main point) and bake other desserts routinely, and thus have need for lots of salt.

Through experimentation, I have noticed the following things:

1. Using expensive sea salt in bread does not make bread taste better

2. There is no blessed difference between Morton's salt and Giant or Safeway salt that costs a dime less

So I always buy the Giant or Safeway salt. This is being frugal.

Unlike at the beginning of my living-alone says, I am now able to afford the occasional canister of sea salt, and I have found that it is a little better than the regular salt in dishes which it is not cooked - guacamole, for example, and salsa. Or atop fries. Because there is an actual improvement, and because I can afford it, I will use the sea salt for such applications.

Being frugal here involves absolutely maximizing the value of every dollar I spend on salt.

Also, because I ride herd so ruthlessly on my grocery expenses, I am able to spend money a little more casually when out with friends. There, obsessing about the additional dollars can wreak havoc with others, whereas wringing the last nickel out of my grocery expenses (balanced appropriately for taste considerations) does not.

Posted by: Lindemann777 | June 1, 2009 10:59 AM | Report abuse

In addition to those above -

To me, being cheap is compromising on quality so you can spend less, more or less, simply so you can have it.

Frugal is also not spending money on stuff you don't need.

Posted by: cmecyclist | June 1, 2009 5:03 PM | Report abuse

I have just a thought on the frugal or cheap column in today's Post. My comment is centered on each diner paying for their own meal. I would probably "throw it on the table," so to speak, during dinner and see what kind of response(s)I get. It would not surprise me if it would be a relief for many, but they didn't have nerve enough to suggest it.

Posted by: gensgenealogy | June 2, 2009 2:12 PM | Report abuse

A lot of ideas and thoughts here echo much of what I was intending to say, so let me add this:

After reading the comments, all of which made sense to me, I noticed that frugality's positive aspect seemed to be that it required sense, thought, consideration, and/or research. Being cheap seems to specifically exclude those qualities. So a homemade gift that suits the recipient is frugal, whereas an affordable but ill-suited gift is cheap.

Posted by: MaxH | June 4, 2009 11:55 AM | Report abuse

I really don't think there's any difference between cheap and frugal. In the recent era of "bling" (for want of a better phrase), there's been a stigma attached to both terms, cheap being the most offensive and frugal being a polite version of cheap. Everyone's had the sixty dollar salad: splitting dinner equally among friends when you had the five-dollar sandwich is not fair unless you want to buy your friends dinner. And it's the thought that counts with gifts: even the smallest present from a friend means a great deal to me.

Posted by: jnurbanski | June 4, 2009 1:36 PM | Report abuse

This is a great discussion. I am a Catholic school teacher with two kids (read: tight budget). The difference for me is what do you really care about and what can you just as easily do without. Here is my small example: I love green tea, drink it all day. The TAZO brand from Starbucks is available at the grocery store, a whole box (18 tea bags) for the price of one at Starbucks. I brew my own iced tea in a small bottle at home and get much more value for my money. Ditto baked goods--instead of stopping at the bakery on the way to school for the kids, we bake a batch of muffins on the weekend and enjoy our own treats. I want to teach my kids how to make careful choices--another example--for an entire month we didn't eat out and then we went to the bookstore and they got each got a book they had been dying for (still not as much as dinners out and we NEVER buy books, we go to the library), so we discussed the difference between spending money on a one time thing (a meal out) or on something they now have for a long time (the book).
great discussion!

Posted by: drabbits3 | June 4, 2009 2:26 PM | Report abuse

Drabbits3: I agree wholeheartedly. Tea at Starbucks and take-out muffins are there for people who can afford to have someone else make their snacks for them. I brown-bag my lunch and take tea in a mug with a lid. The ubiquitous credit card has all but quashed our necessary connection with our expenditure. The current crisis is an opportunity for us to realize how we are spending. Those who have always been frugal are suffering the least right now.

Posted by: jnurbanski | June 4, 2009 2:42 PM | Report abuse

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