The Line Between Frugal and Cheap

Nobody wants to be called cheap. We dread being labeled a scrooge, likened to a mean, greedy recluse who would do anything to avoid parting from a penny. We want to be known for our generosity while still saving enough for ourselves. Those who decide to be money-wise are often nervous of being accused of being ‘cheap,’ so where is the line between frugality and miserliness?

Collecting Money vs. Optimizing Value

There is a stark difference between spending for less and spending for value. Someone who is frugal will be willing to pay more for something of quality that will provide more value or last longer, whereas someone who is cheap is only concerned about the dollar amount. Their miscellaneous drawer might be cluttered with free sunglasses rather than one reliable pair (totally guilty of this one, by the way).

Someone who is frugal optimizes the value of money. They have a closet of well-loved items with true utility. They don’t buy based on the whims of sales and e-mails with frantic messages blinking “buy now or else miss out FOREVER!” The effort to curate their home inventory is measured and strategic.

A few well-loved items can mean the difference between frugal and cheap

Joel of the Pour not Poor Podcast tells a story about how his decision to go with the cheapest ceiling fan option resulted in a delivery of a fan with tiny blades, barely long enough to turn the air in the room. His story highlights how sometimes the cheapest option is not always the most valuable. He regrets that he didn’t spend more time researching the best option, lamenting his “cheapness” in this example.

Personal Relationships Are Impacted

The line between frugal and cheap feels even fuzzier when it comes to personal relationships. Should you be pressured into going to your second cousin’s destination wedding? I would say skipping out on that might be a frugal-minded decision. However, it depends on the relationships. If you frequently turn down going out with friends because you don’t want to pay for the outings, that might be a sound financial decision in the short term, but you’re missing out on crucial relationship building.

A cheap person might skive off hanging out rather than pay up, but there are always alternatives to strike a balance. A frugal person would organize events that you can do for less: an art night in the home rather than a “brushstrokes and beverages” class at $40 a head, for example. They might offer up their home for a potluck or organize a hike for the friend group.

To save money on frequent outings, suggest more frugal alternatives

One area I always waffled on was lunch with coworkers. My coworkers and I would walk every day to the local food carts downtown. At $7 a day, the cost of eating out was tallying up to ~$1,800 a year, and my desire to not seem cheap was costing me a lot. I looked at my options and decided to start bringing lunch to work. The compromise was that I would walk with them, chat in line while they got their food, and then we would all eat together as usual. If personal relationships can be maintained while spending less, that is frugal, but if you duck out of things consistently because of the cost, beware: you might be cheap.

Being Cheap Negatively Affects Others

I know I have been cheap in the past trying to walk this line. I cringe thinking back, like the time I sent money as a gift towards a friends’ wedding that I later learned only just covered the cost of having me there. After severely miscalculating the cost per head at a wedding, I feel a lot of shame about it! I tried to make it up later with a nice housewarming gift but let’s be real– at that point, it is too late. The truth is my being cheap negatively affected the bride and groom, and that is what makes all the difference.

The clarifying contrast between frugality versus cheapness lies in how others are affected. If you keep your house in the low 60°F (15°C) to save on utilities, that is great! It is definitely a positive to be conscious of electricity use and the effect on the environment. However, if you have guests that are shivering in your living room, that choice suddenly becomes cheap.

If your guest looks like this in your home– chances are you are being cheap

You might be frugal by eating out less, but if you do go out to eat with friends and skimp on the tip, that is cheap. When you decide to tip less you are affecting others negatively with that choice and you have crossed the line over to cheap.

If you regift items– you better be sure that the person will benefit from the gift you give them. If it is just about recycling clutter in your home, it benefits you but reflects poorly on the effort and thoughtfulness that is meant to be represented by a gift. A frugal person might craft a gift, or even shop thriftily, but one crosses the line into cheap when thoughtfulness devolves into trinkets meant to tick a box.

Final Thoughts

Taking charge of your monetary situation is something to be lauded. To avoid being cheap, refocus on the value of your purchasing decisions. Take the time to research for lasting quality. While investing in the stock market, be sure to also invest in your relationships. Finally, evaluate how your monetary decisions affect others.

What do you think?

How do you optimize value in your life?

How do you foster relationships on a budget?

How does your thriftiness affect others?

What is the difference between frugal and cheap to you? Have you– or a friend– crossed the line before? Share your thoughts in the comments below!


Other bloggers tackled this topic. Check them out, whether you’re frugal or cheap or not!

Anchor: Our Financial Path
Link 1: Othalafehu
Link 2: Working Optional
Link 3: The Financial Journeyman 
Link 4: Kiwi and Keweenaw
Link 5: Physician On Fire

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  1. This is a thought provoking post. It’s a challenge to be both generous and frugal at the same time. My experience of cheap is when someone socializing with me and other friends and orders the most expensive thing on the menu (and specialty drinks etc. ) then expects everyone to split the check equally.
    Here is another example of cheap: A friend told me about how her brother gives cheap gifts to her children. While she found it acceptable that he finds a gift at a thrift store because he doesn’t have much money, it was not OK that the sweaters he gave them last Christmas smelled like they hadn’t been washed!
    So I have a question for you (or any of your followers): Is RE-GIFTING cheap or simply sensible frugality?

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