Frugal Vs Cheap: What's the Difference?

Anybody that knows me really well would say that I have been frugal for most of my life. However, that is not really true. For most of my life, I have been cheap.

Let’s talk about this frugal vs cheap difference, because these two terms seem to be conflated a lot, but they are really quite different.

So what is the difference between frugal and cheap?

Cheap is equivalent to stingy, meaning that you are reluctant to give or spend and that you are not generous. Cheap is also equivalent to miserly, which means that you are willing to live in wretched circumstances just to save or hoard money.

To say that I used to be cheap is a rough thing to say about yourself, but that was the reality. When I had my first apartment, I had a good paying job, with a salary and benefits. My electric bill was somewhere between $15 to $25 a month. Why was I still getting shut off notices?

Going over a receipt

I hated to put money out for anything. I was living in an apartment building where there were dry chicken bones in the hallway. There was a resident creepy dude who would stand at the doorways of the buildings and watch people with their comings and goings so that he could eventually rob our apartments of our belongings.

I could have done better. I had the money to do better. Why was I living this way? The fact of the matter is that cheap people are not strategic with their money at all. They are just tight-fisted with it. They do not want to let it go, no matter what.

For me, the definition of cheap is if you choose to buy a lower price item, even though you know it is such bad quality that you are going to have to buy five times more of the same item over the next year, just to avoid paying more right now. That is cheap, and that was me.

How did I come to be this way? I can trace it back to my early teens, when our family of six was going through financial struggle. I was the oldest, and my three brothers were always in need of new clothes: the oldest one was growing like crazy, the middle brother was always chewing up his sleeves. I, however, was set, because my aunts would give me their clothes, and they were good quality, too.

This was when I learned to make do with what I already had instead of spending more money. This was when my creativity got a boost and I started to look around for ways to make things that I wanted or needed on my own. By the time I was 13, my whole motto was, why pay for it when you can do it yourself?

Fast forward back to when I am in my first apartment. Like I said, I would not pay for a $25 electric bill, and I did not pay the rent either, so of course I got evicted.

Next thing you know, I am back at my parents’ house, with no job, and feeling completely done. I remember the Spirit of God saying to me, you do not have to be depressed and you do not have to complain. Do something.

So I closed my eyes and I got a vision in my head of what I wanted my life to look like. This is the point where I started to transition from being cheap to being frugal.

Frugal means that you avoid waste and extravagance, you save prudently, and you are not wasteful with your money or your resources.

Jeans for sale

You might be frugal if you compare two items by quality and price and when you realize that that lower price item is going to require you to buy multiple of that item within a short period of time, you opt to buy the higher priced item because you know it is going to last.

My rule of thumb for telling the difference between being cheap and being frugal is this. Cheap people focus on minimizing their costs in the moment, whereas frugal people think about minimizing their costs over time.

At this point in my life, I was leaning all the way in. I got two temporary jobs. I started to pay down the debts that I had, including credit card debt from college and the rent that I owed for that apartment. I got my student loans out of default and started paying my tithes. Trust me, becoming a frugal person instead of a cheap person was hard to do, but I was doing it.

Within about five months, I had the job that I wanted - the dream job for me at that time. I started budgeting my money out. I started saving my money. I got my credit score up. I was making a financial plan. And within a year and a half to two years, I was walking into my own house.

Frugal vs cheap

If you did not know before the difference between being cheap and being frugal, now you do.

So where do you think you stand in being cheap vs frugal? What would you like to change about the way you spend money? Leave a comment and I will gladly read what your thoughts are.

Next, check out my 10 Frugal Living Challenges to Save Money.

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