In the last column, we started our discussion on the difference between cheap and frugal. We looked at some dictionary definitions and some descriptions of and ideas about cheap and frugal from a number of website articles.
Perhaps this last week you refined your own ideas about the difference between cheap and frugal, and maybe you even asked others about their views. In this column ,I am pleased to share some of the thoughts that I received from family, friends and educators. Then, as promised, I will give you my thoughts.
One of my favorites responses is, “Frugal is when you are describing yourself. Cheap is when you are describing others.”
Cheap clearly has negative connotations for everyone. Here are some examples from the responses that I received — “If you are cheap, it affects others. You are a poor tipper, don’t give gifts to deserving people, never pick up the tab and are always angling for the freebie.” Also, “Cheap is an unhealthy obsession with money as an end in itself. Cheap people are selfish and are hoarders who may spend money on themselves, but not on others.”
OK, so clearly none of us wants to be known or thought of as cheap.
On the other hand, the responses that I received saw people who were frugal in a much more positive light. Here are some of the responses that I received — “Being frugal entails good management of your money, being prudent, conscientious and not wasteful. Frugal is living within your means. Frugal people play it smart, plan carefully and enjoy life’s pleasures without the guilt of debt.” Also, frugal is “being sensible about money, buying what you need and are able to pay for and thinking over impulse purchases.” In addition, frugal is “not spending more than you need to, and carefully planning with your money.”
As promised, here are my thoughts about the difference between cheap and frugal.
Cheap is a condition, whereas frugal is a purposeful, enlightened way of life when it comes to your finances. Being frugal insures that you are getting good value for every one of your hard earned dollars.
Cheap people do not enjoy life the way that frugal people do. Frugal people have financial priorities and goals and they sacrifice for them, but those goals are often about enjoying life. They will save on some things so that they can enjoy better vacations, hobbies, etc. and so that they can be more generous.
For me, it is like being organized. For those who have a lot of interests in life, being organized — building processes and procedures — gives them more time to pursue those interests that they enjoy rather than spending unnecessary time reinventing the wheel all of the time. Frugal people save money where it counts in order to have more money to do the things that they value.
This perception of enjoying life and not enjoying life with your money, especially money that you are careful with, is very important when it comes to children and grandchildren. Since some of the behavior of cheap and frugal people may look the same to them, children may see you as cheap if you do many of the same things that frugal people do, but they don’t see you as enjoying life with your money. They need to see you saving money on things so that you can enjoy life more. Then they will see frugal as a good thing.
Frugal and generous are not inconsistent. In addition to enjoying life, saving on things so that you can be more generous and charitable is important to being perceived as frugal, not cheap.
Frugal people know when quality counts and when it doesn’t, and they will go for quality when it is warranted. However, they will obtain that quality for the best possible price.
Being frugal gives you a positive feeling of being more in control of an important aspect of your life — your finances. Having goals, including avoiding debt and being better able to meet them, because you get the best value for your hard earned money, is reinforcing. It is much better than just spending out of control on wants, wishes, luxuries and conveniences and perhaps going into debt. Cheap people, on the other hand, may be in control of their spending or non-spending, but not in a healthy way.
I can’t help but end with a few more “cheap” jokes. He is so cheap, he named himself as a beneficiary in his will, won’t even tip his hat and has worn his suits for so long they’ve been in style four times.