For me, I feel that the difference between being frugal and being cheap is cost verses the value of something. A cheap person only looks at the cost of something, whereas a frugal person looks at the value of the item, as well as the cost. A cheap person is more limited to the short term, whereas a frugal person looks at the bigger picture.
But, the difference between them is really straight forward; you have to make your choices count.
What I mean by that is ensuring the financial decisions you make on a daily basis are choices that will benefit your life from that point forward, without having a detrimental effect on another area of life, or indeed someone else’s. Every single decision should mean improving your life in one way or another, otherwise why would you choose it?
One scenario is buying a new mattress for your bed. A cheap person would go for the least expensive option, regardless of the quality of mattress, because the price dictates the sale. A frugal person may spend more on their mattress, but would choose one that is better made and therefore will last longer. In the long run, the frugal person wins because they spend less overall on their mattress; the cheaper mattress will wear through faster and probably become more uncomfortable and need replacing a lot sooner than the more expensive one. The cheapest option is definitely not always the best one, and this comes back to making choices that count, including your finances.
Another place where cheap verses frugal comes into play is when you’re dining out with friends. A cheap person will want to pay the least, irrespective of others, including scrimping on a tip. They may spend more on their meal overall, but not leave any tip whatsoever. A frugal person may spend less on their meal overall, but never scrimp on a tip. They might choose to have water instead of soda or alcohol, or only have a starter and a pudding, but leave a % of their bill as a tip. Tipping isn’t as common in the UK as it is in other parts of the world, but I always feel that if you’ve had good service in a restaurant, then it is only fair to leave a tip. Another choice; putting people over saving a few pence/pounds is much more important.
Making all of these decisions, where you are prioritising your spending in order to make positive steps to ensure you have the life you want, are all about making it count. The frugal person will make short term sacrifices, so that the long term goals are met, that dreams can be accomplished and life is much less complicated. A cheap person will sacrifice the long term in favour of making and saving a quick buck, regardless of the consequences. In terms of our frugal journey, I am more and more conscious of the decisions we make and how they will impact us on the long term. This includes minimising our general spending and questioning what we need in our lives, and what we can do without.
There is a fine balance between being frugal or cheap and sometimes it is easy to lose sight of what the long term aims are. But, if you make your choices count, then you are already on the right path.
Do you agree? What do you think the main differences are?
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Excellent post. You’re exactly right. The distinction between cheap and frugal is a difference between perceiving only cost and only value.
I will happily spend more on something than other people in one area if it offers something valuable to me. But spend more on something for something that offers value? Not at all.
Tipping is an interesting one in the UK. I understand that the “average” is 8%. Either that means service is universally poor or Brits tend to be a little “cheap” on the tip. Who knows!
Thanks again for the interesting post.
There isn’t really any consistency with tipping; it can really vary from place to place. Lots of people don’t seem to tip at all, which I find a little strange.
Yep we have cut down what we eat, but we eat well, less but well, and leave a tip (we drink beer/cider rather than wine for example!)
Sounds like a good plan to me 🙂
A few years ago I was in London. We went to small restaurant close to Palace Buckingham. My total bill incluyed tips…I was surprised because in Italy, France they never expect a tip . It is optional but i always leave a tip because in America we alway let some 10-20% of the bill according how well the waitress meet your expectations… 8% I will pay attention next time.
Most places don’t add on a tip in the UK; it’s more usual for the customer to decide 🙂
Nicola, thanks for differentiating the two. When it comes to frugal choices, we’re considering it’s long-tern value plus the cost. We have to be reminded that whenever we buy products and services, frugal choice is to be made.
Indeed, value is so important when considering anything.
It’s all about balance! “Buy it for life, not twice” is how I approach a lot of purchases.
We recently bought a new mattress, a rather expensive one, and have been a bit disappointed with how it has performed. It’s way better than the old one, but I am wondering if a cheaper one would have made us just as happy.
I like that little saying, I’m going to remember that for future purchases 🙂