Are You Frugal or Cheap?


It seems that when it comes to money, many people fit into one of two groups: those who carefully count and save every penny they earn, and those who blow through their paychecks so fast they hardly know what hit them. In writing about money, I’ve spent a lot of time watching how other people talk about, spend, and manage theirs. And while the term “frugal” has become chic in recent years, it’s my observation that some people take it too far — way too far. While I do my best to avoid debt, put away for retirement, and save money where I can, I have no interest in shivering through the winter under a single light bulb just to keep my costs down — and boy am I grateful that I have the luxury to make that choice.

When frugality is a means to an end — a way of achieving stability and working toward future goals — it’s a good thing. But when it crosses the boundary of common sense and logic and takes a turn toward the obsessive, it’s described by a less gracious term — cheap. (See also: A Beginner's Guide to Frugal Living)

The Purpose of Frugality

So what’s the difference between frugal and fanatical? I think motive’s a good indicator. In my own experience, I find that thrifty people have a number of motives that help keep their spending under control. For example, I once met a young woman who would work like a dog for months at a menial desk job, living in a tiny apartment for next to nothing. Meanwhile, she was socking away cash, which she’d use to spend several months traveling in a foreign country. When she ran out of money, she’d start all over again. While this kind of lifestyle isn’t for everyone, I admired her thrift, because it was a means to an end — she had a goal, and she made financial sacrifices to make it happen. That’s what money’s for!

But not all of the motives that keep people from overspending are positive. I’ve also met many people who just can’t bear to spend their money on, well, anything at all. It isn’t because they’re struggling to get by or are working away at paying off a mortgage. Instead, it seems that they don’t like the way spending money makes them feel, so they just save it (and save it and save it). I understand that some people are forced to live pretty spare lives for a number of reasons, which is why I find it so baffling that some people take this route by choice, often isolating themselves in the process. Yes, how you spend your money is up to you, but when those decisions are governed by guilt or fear, I don’t think it’s much of a choice. 

Finally, there are a few people whose thrift goes beyond fear toward being truly mean spirited. You’ll know you’ve crossed into this territory when your savings come at someone else’s expense. These are the people who conveniently forget their wallets when they go out for lunch with a friend, never tip their servers, or show up at a potluck empty-handed. Some people might even cross the line into returning items they’ve had for years to the store to get new ones or stealing cable from their neighbors. The bottom line is that if you’ve cut your budget so much that you feel you need to take advantage of others, you’ve crossed line from frugal to cheap.

Which Side Are You On?

When it comes to people’s spending habits, I’ve seen both extremes, from asceticism to over-indulgence. I try to balance somewhere in the middle. Because while I’m so grateful to have money to spend on both the things I need — and a few things I don’t — frugality is a valuable skill to hone, especially in a world where so many people live paycheck to paycheck. But taking frugality to its extremes may be no better than falling prey to overspending. After all, neither approach leads to living well. And isn’t that what saving money’s all about?

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Guest's picture

Frugal: Saving up for Christmas presents and then buying when you find a great deal. Cheap: Buying Christmas presents at yard sales, because "there's only one piece missing and it's 80% off retail!"

Living frugally is something I think I will always do, no matter what my income. I do enjoy nice things, especially lunches out, travel, and great cheeses. But those are not a good enough reason to not save, to blow a paycheck, or to be irresponsible with money.

Don't Quit Your Day Job's picture

Do you get mad when people add a third category to a 2 category question? Sorry for this, then!

I'll go with rational. I'll try to save money on any purchase - by seeking out the cheapest price, sleeping on a decision, and even figuring out the best plan. However, I try not to worry about it past the purchase.

Frugal to me sometimes means to go overboard - to have space filled with bulk purchases, to spend lots of time to save a few dollars. I suppose if I had to pick one I'm with 'cheap'.

Carmen Grant's picture

I agree with the overboard-ness of some people. The stock piles people have of stuff they don't need, and don't want but buy because it was super cheap or even free is nuts! Yes it is amazing to see that some people can get $500 of groceries for $2...but...when its all snickers, corn starch, croutons, and mustard? Then its not that cool. Im with you on rational.

Guest's picture

I tend to be on the frugal side. When I've been cheap about a purchase, very often I regret it. However, I'm not cheap with friends and family though I have felt bad about being frugal. With 5 kids, money doesn't go as far as it does in a smaller family.

I have a friend who is very frugal and very generous at the same time. She's a homeschooler who buys her supplies for very little money, and then gives them away or sells them to cover her costs.

Guest's picture

I see it this way: frugal is not spending more than you have to, cheap is not spending as much as you should.

For example, buying store brand cereal instead of name brand cereal because the only difference you notice is price is frugal, cutting out the things you don't really want or need to treat yourself somewhere else is frugal too. At the far end of the scale, cheap is going to car dealerships just to get free coffee or buying clothing only because it fits and has a low price.

Andrea Karim's picture

That's actually a great definition!

Guest's picture

Damian from Quicken here. I tend to find myself on the frugal side, but some of my friends spend, spend, spend. A night with them usually includes dinner and drinks out, which adds up quickly. I have other "cheap" friends that sometimes show up at parties in their neighbor's homes without an invitation because there is likely free food. I try to encourage both groups of friends to meet in the middle, and it usually works. Instead of a night out, I invite everyone to my place and encourage them to bring what they'd like. The "cheap" friends usually bring board games and that's a great (and cheap) contribution.

Tara Struyk's picture

What a great way to bring your groups of friends together - a great tip for any host/hostess.

Tara Struyk's picture

What a great way to bring your groups of friends together - a great tip for any host/hostess.

Carmen Grant's picture

I definitely say frugal - i look for high quality items that are going to last, instead of inexpensive "cheap" items - those turn out to be more expensive in the long run because you keep having to buy them. i.e. toys, clothes. etc.

Donna Freedman's picture

Frugal: Buying thrift-shop or yard-sale clothes that are in great condition. Cheap: Making your kid wear ugly, inappropriate or stained clothes to school, where s/he will be teased.
Frugal: Shopping carefully (sales, coupons) and cooking meals from scratch. Cheap: Serving 10-for-a-dollar ramen (and nothing else) for dinner five nights a week to save money.
Frugal is being smart with money. Cheap is being mean with money, i.e., frugality that negatively impacts another person (or even you).
I am careful with my cash; my mantra is "I save where I can so I can spend where I want." With the money that I *don't* spend on dinner out five nights a week, frequent trips to the mall, cable TV, et al., I can set aside money for the future and still enjoy the present.

Tara Struyk's picture

Great examples, Donna. I'm a fan of your writing, so thanks for comment!

Guest's picture

I was just in Vegas and came to my own definition: being frugal is about selective spending. It might look cheap (especially if you're not drinking the $20 drinks!) to other people, because they select other ways to spend their money.

Guest's picture
Ben M

I think it can depend on your situation. Some people need to be frugal out of necessity, while some make it a lifestyle outside of the realm of necessity. I think someone who can not pay rent, but buys Starbucks is NEVER frugal... while someone who can take care of business can buy Starbucks and be considered frugal if it is one small piece of a big picture.

Guest's picture

People who are so frugal they are taking advantage of others are more than cheap; they are thieves. I like to see how much I can pinch a penny sometimes, but I make a point to never do it at others' expense.

Guest's picture

I'm both frugal and cheap, but I don't do the mean-spirited examples given in the article. I'm not an extreme version of being cheap; I still spend a lot on Christmas presents for others, for example. But I will stand around and wait for a manager to refund me 10 cents if I'm charged incorrectly.

Guest's picture

I'd definitely put myself in the frugal category most of the time, but I also slip into the cheap category. I've been on a spending fast for the last year, to pay off student loan debt ($14,000 paid off this year!). Because of the rules I've laid out for myself, I definitely slip into cheap at times and there are certain situations where I've felt really guilty about that. I'm going to try to level things out in the new year and stick to the frugal category. It feels way better than cheap and over spending!

Guest's picture

As far as I'm concerned, to be frugal doesn't mean save every penny and to be mean. I n fact, it does mean to live a happy, healthy and easy life with an active attitude. I think I am a frugal girl. I cook food for families and we enjoy our meals together. I only shop things I need and take advantage of all resources,such as finding discount info. from local newspaper or magezines, collecting coupons & deals from dependable sites like famous or rising-star, etc. I make gifts by myself for families. All the things I do is meaningful and I appreciate the time I spend with my family. So, to be frugal,but not cheap!

Carmen Grant's picture

I agree! Taking advantage of deals and coupons is SO important! Why throw away free money? It like saying "no thank you, I'll pay $30 more for this shirt...just because." Makes no sense right? I just hit the deal jackpot - we had been waiting patiently for tents to go on sale so we could go camping...I found one here on WiseBread's Daily Deals AND had REI dividend money left over - SO..i saved $215 on a $300 tent...AMAZING!

Guest's picture

Frugal people: care about the perceived value of the item, expensive or not, as long as it is meaningful or provides lots of utility... spend more on items that he/she cares the most, and being cheap everywhere else

Cheap people: buy every single item for cheap

I admit, I am cheap at times but mostly frugal. For example, when shopping for groceries, I compare unit prices for every item I need (frugal).

For some groceries like bread, I don't really care about buying the cheapest one because it's gonna taste the same as the more expensive brands and will mostly feature the same ingredients. It's going to last the same amount of time when I buy the more expensive brands anyways. (cheap)

However, I never skimp on buying anything less when it comes to clothes because I need to buy one that is stylish for and will last for a couple of years. (frugal)

Guest's picture

I was wondering where you would differentiate between frugal and cheap, and I think that saving at someone else's expense on purpose (particularly a good friend or family member) is a great example.

I saw traits of the "cheap" quite a bit during college, and now even after college, and have been trying to pay attention to my own habits in order to avoid going overboard with the "Save, save, save!" mentality.

Guest's picture

Even though I am a single mother of two children,and a college student, I have found my own tricks to saving money. I have learned to pay myself instead of someone else. For example I cut all cable off in the house,about 8 years ago now like I said I have two chidren and did have plans to get it back someday, but not anymore. i pay myself the $120.00 dollars a month that I gave to the cable company. I invest it in short term CD's about 6month's to a year. I then turn around and spend the money plus interest that I've earned on a nice travel expense for my family. We don't even miss the TV anymore! It was the smartest thing I have every done and I have a much healthier relationship with my children because of it. Thier grades even came up in school,and I have been able to keep off an extra 30lbs that I have been fighting with ever since my second child was born,just because we are much more active without the mindless entertainment. Well this is just one example of the many things I have cut. Have a Great Happy Day !!!!! Amy

Guest's picture

My ex husband who earns $450K per year. Stole cable , would not pay for his children to go into events (always claimed they were younger than 12 to get in for free) Declared he was out of work to get out of child support and alimony in court (even though he was earning $450K) (Stole items from my home after we had divided them up) Told his immediate family he was totally broke and could not help out with his aging parents (said he lost everything in the divorce) Would not feed his children correctly when we were married. He now has over 2 million dollars saved in cash in his home. He blows money on whatever he wishes , ignores what he has been court ordered to pay. Always forgets his wallet when he goes out on a date. Lives a extremely high end life at all of the cost of others. I put him through school and he left me with $180K worth of debt. He still treats family like dirt, dates woman and takes money from them then moves on to the next. He dates single Mom's and acts like he is going to help them out then ends up taking them out to eat and leaves them sit with a large bill. Nice guy!

Guest's picture
Not impressed With Even Beautiful Cr*p

Thank you! I'm a child of a major hoarder, my mom. She had the money to be a major shopper, at least for brand new items of clothing for her just to be stored (floor to ceiling) in her large house and NEVER WORN! I could've used the 1980's blazers when fresh out of undergrad or law school. I would've been out of style but very "work appropriate." In the '80s clothing was made in the USA (not China) and hence very expensive, in case you didn't know this. I worked hard to make sure part of her hoard went to places other than a landfill after her death, but much of it was completely wasted due to mildew and having served as a rodent reserve for decades. I only share this unpleasantness to say that overshopping for items is really disgusting to me, even if the items are pretty. It will likely end up n a huge landfill and that will be your lasting legacy Shoppers! Thanks for your blogs!

Guest's picture

I think I would dispute the basic premise here that "cheap" is just "frugal" taken to extremes. To me, the difference between the two is in kind, not in degree. Frugal people are saving money for a purpose--or many different purposes. For many, if not most, having more to share with others is one of the main motivations behind living frugally. People who are cheap, in the sense of stingy, are doing exactly the opposite: pushing the burden of spending onto others to keep as much as possible for themselves. The examples you give, such as stealing cable or not tipping servers, are not "taking frugality to extremes"; they are missing the whole point of frugality.