We’ve all thought about saving money and may have even made plans. When researching saving strategies, you may come across the words frugal and cheap. There are some minor differences between being frugal and cheap, and each approach to money has its advantages and disadvantages. Keep reading to learn more about the differences between being frugal and being cheap.
The Basics Between Frugal vs. Cheap
Being frugal means being the most strategic with a purchase or experience. While being cheap means simply wanting the lowest-priced option. Most people would definitely want to refer to themselves as frugal rather than cheap, as the word cheap often gets a bad rap. However, cheap and frugal people don’t have many differences in their primary goal to save money and prevent overspending—though their approaches can differ.
For example, if a frugal person plans to buy a car, they may think about gas mileage, price specs, and resale value. While a cheap person will only look for the cheapest car on the lot.
Some Pros and Cons of Each Lifestyle
Whether frugal or cheap, each lifestyle will come with its own pros and cons. Here are some to consider:
Pros of Being a Frugal Person
- Can often mean the most quality for the price.
- You won’t have to miss out on some of your favorite things.
- It can be easier to find balance with money when approaching things frugally.
- Being frugal may not impact your relationships as much as being cheap can.
Advantages of Being a Cheap Person
- You will save the most money possible.
- It can help you reach financial goals the fastest.
- Being cheap can save a great deal on a purchase.
Cons of Being a Frugal Person
- It can be stressful and time-consuming to think critically about every purchase or expense.
- Being frugal can mean missing out on an optimal experience or purchase.
Disadvantages of Being a Cheap Person
- This type of lifestyle can be highly limiting in your experiences.
- Being cheap can lead to strains in households and relationships.
- It may mean spending more money over time, even if you save a few bucks upfront, as the cheapest option usually means sacrificing quality.
- A cheap person may be too attached to a few dollars, and it may lead to emotional turmoil if they have to spend money.
Can You Be Both Frugal and Cheap?
Yes! Cheap people can also be frugal people and vice versa. And chances are that if you are one of these people, you have traits of the other. For example, let’s say you are going on a trip. A person who is considered primarily frugal would likely try to bundle their flight, stay, and car rental to get the most from their trip. If that same person also strictly goes with the lowest-priced bundling option; they can also be cheap.
How Frugal/Cheap Living Can Benefit You
Like anything else, living frugally or cheaply can become a problem when excessive. However, in moderation, it can actually be a great way to save, boost your budget, and help you build better spending habits. Here are some things that frugal people and cheap people can teach you:
A Bigger Picture of Your Money
Most people don’t really think about how they spend money. By taking on some practices that frugal or cheap people have, you can get a bigger picture of what you spend the most money on. From here, you can either build a budget or simply try and cut down on whatever it is you spend the most money on.
How To Have Fun With as Little Money as Possible
You can still enjoy experiences and buy things while saving money, and frugal and cheap people can teach you that. The truth is that most products and experiences are often overpriced, and simple things like buying off-brand, using coupons, or making your purchases through a third party can help you get those same experiences or items for a much lower price!
Getting the Best Value at the Lowest Price
When you are frugal, one of the most important things is to get the most value from your money. And so, instead of buying the first option, shop around and look for the best deals. This can help you save money while ensuring you get the most from spending.
How To Stop Spending Money
Bad money habits are an issue that many people who aren’t frugal or cheap deal with. If you constantly overspend, miss bills, or are trapped in debt (due to a payday loan online, a credit card, personal loan, etc.) living frugally or cheaply can be a great way to change those bad habits.
Think About Savings
Most Americans don’t have an adequate safety net that could help them if an emergency or unexpected expense happens. If you need to start saving, living frugally and cheaply can help you! Whether it is downsizing, skipping fast-food restaurants, or saving a few bucks on everyday essentials, living like this will mean saving money without having to really think about it. If you are overwhelmed with the idea of starting a savings fund, begin by living cheaply or frugally for an easy start.
Develop a Different Money Mindset
For people who live cheaply or frugally, their money provides a plan for their everyday expenses and their future. If you don’t really think about things like financial goals, retirement, or planning for significant milestones, learning some frugal or cheap tactics can help put things into perspective. There is so much that you cannot do if you don’t have the funds. Whether it is starting a family, going to school, or retiring, you will need funds to do so. By living cheaply, you can make room for those goals and allow them to guide your financial decisions.
When To Rethink Your Cheap and Frugal Lifestyle
Whether you consider yourself a cheap person or a frugal person, sometimes, an intense focus on money can negatively affect your life. Here are some behaviors that should alert you to take a breathe and let go with your money:
- Your money habits are starting to severely impact your quality of life.
- You are struggling to spend money on essential items like food, clothing, and housing.
- When you start judging other people on how they spend their money.
- You frequently take things that are not yours, like office supplies from work, condiments from restaurants, etc. Although this may not technically be stealing, it can be frowned upon.
- Other people in your household are negatively impacted by your frugal or cheap lifestyle.