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Am I Frugal or Cheap?

frugal or cheapAfter writing my wildly popular article, “25 Examples of My Extreme Cheapness“, I actually freaked myself out a little. Am I really as cheap as I sound? Then, after receiving a few comments like, “Wow, I can’t imagine living like this”, I was taken back even more! Being frugal is one thing, but to be called cheap is quite a different animal! So what is the real difference between being cheap and exercising frugality? And where do I actually fit in? Am I frugal or cheap?

1) Deciphering the Difference Between Value and the Lowest Cost

If you are constantly buying products because they offer the lowest cost, then you are probably cheap. So why is this a bad thing? Often times the cheapest product is the most poorly made. Instead of spending $5 on a quality can opener that will last 10 years, you spend $3 on a can opener that will only last 2 years. Over the course of ten years, your cheapness has actually cost you $15 for can openers vs. only $5 if you were thinking with a long-term frugal mindset.

What about me? Frugal or cheap? Yeah… I think I have to put myself in the cheap category on this one.

2) The Difference Between Having Fun or Staying at Home

There are so many ways that we can entertain ourselves these days. The list is almost endless! Well, that is, unless you are cheap. If you have the quality of cheapness, then you will likely limit your activities to those that are free. You know, things like hiking, biking, tennis, running, yoga, picnics, etc. These activities can definitely be fun, but you may be letting your cheapness get in the way of some other quality adventures (like concerts, dining out with friends, hosting parties, traveling, etc.). Those that are frugal will find excellent deals on these events, but will still have to fork over some money to attend. Overall, they will spend more money than you, but they won’t be sitting at home having no fun for days on end either.

What about me? Frugal or cheap? I have morphed into the cheap category on this one too…

3) Being Cheap Comes at the Expense of Others

There was a show that aired a couple of years ago that I’m sure you have all heard of. It was called “Extreme Cheapskates”. The featured cheapskates were absolutely out of their minds. There was one guy that rode his bike around town all day to find change. He collected soda cans, found change in and around pay phones, and even walked into restaurants to check all of the seat cushions for change that had fallen out of customers’ pockets. In the end he collected $7. There was another man that would save money by taking leftovers from other couples at the restaurant! These two guys embarrassed their wives terribly and their cheapness was definitely affecting their spouses negatively.

Those that are cheap also avoid saying thank you with their money. For birthday parties, they either come empty handed or recycle a gift that was given to them in years past. With these actions, they are hurting their friends who feel unappreciated by the crappy gift they receive.

What about me? Frugal or cheap? I give myself a frugal rating here. I might give a two-year old a gift from the Dollar Tree, but they typically love it!

4) Crossing the Line into the Office Joke

Nobody wants to be the joke of the office, especially if it hurts your chances of getting promoted. Those that are cheap don’t participate in secret Santa’s, potlucks, and they never give gifts of appreciation to their coworkers. Because of this, they often seem anti-social, elusive, and unappreciative. People like this rarely get promoted. Those that are frugal will get deals on gifts and give them freely. Again, they’ll spend more on a day to day basis, but they have a much better chance of being liked and being promoted within the company.

What about me? Frugal or cheap? I’m calling myself frugal. I do participate in secret Santa’s. I do buy food for potlucks. And, I once brought donuts into work on my birthday. That counts as frugal right?

5) Saving Money vs. Earning More

The major difference (in my mind) between being cheap and frugal is how you perceive money. Either it is a fixed number that cannot be changed or it is a nearly infinite resource.

Cheapskates often feel like earning more money is not easy, so instead they focus on reducing expenses in order to boost their savings. Frugal people think of ways to free up their time so that they can earn more money through other avenues. In other words, those that are frugal might have a lawn care service, a personal assistant, and a house keeper because these services allow them to spend more time working and earning more money in the long run.

Frugal people might appear to be wasting money on services, but in fact their overall income after expenses is often larger than those that are cheap and do everything themselves.

What about me? Frugal or cheap? Unfortunately, I am cheap in the category. I do almost everything for my website business to decrease my expenses, but this does not allow me much time to expand the reach of the site. While I am saving money, I probably am limiting my earnings potential.

So what do you think? Are you frugal or cheap? Why do you think so?

Money Save Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Your question is really a subjective one depending on how a person views themselves and their actions. I rather doubt Ebenezer Scrooge thought he was cheap and that he was merely frugal. Know what I mean?

    Since money is personal each of us choose how we want to use it or not. I personally know people in each category and while it is their decision to make on their resources there are some that I prefer to stay away from.

    • Sometimes I do need to step back and realize that my way of living is not always the best way. Some people find much more enjoyment in spending their money and having little in savings. Others would rather stock up their bank account by living cheaply. For me, I want to be smart with my money, but never limit my earnings potential. This is how I view the difference between frugality and cheapness.

  2. I remember when there wasn’t a real difference between frugal and cheap. It’s actually funny to me that people are trying to create a line in the sand here. I think what it comes down to is that a cheap person is someone who spends less on some thing that you yourself value.

    I call myself cheap, as an endearment. There are definitely people who spend less than me though. I usually use cheap and frugal interchangeably.

    • I do not want to be cheap when it comes to creating wealth. Cheap people always think about saving money, but rarely see that spending money can actually make you MORE money (and therefore have a net gain that is more than simply not spending money). For instance, perhaps hiring a virtual assistant would cost me money, but would free up my time to work on projects that would earn me thousands more dollars per month. Frugal is better than cheap, and that is what I am striving for.

  3. OMG- this is such a great eye opener for me. I too am consistently in both areas. I truly think and believe that I’m going to reach a point that heap or frugal will not matter. Why? Because I will build an empire that delivers passive income and I will then enjoy all I want in life. “Nothing comes with out hard work”. By the way I still enjoy the now though.

    • I figure that I will be the same, but lately I am just so timid about spending ANY money and I don’t want to be that way through life when I have millions in the bank. I want to enjoy it! I think I have to check myself a little bit today so that I have the emotional ability to let go of my money sometimes.

  4. I am more on the frugal side. But I think being frugal or cheap can also be based on the situation. There are times that it’s best to become frugal than to be cheap and vice versa.

    • For the most part, I consider cheap as bad and frugal as the way to go. What is an example where cheap is the best option?

  5. I’m more frugal than cheap. I was more cheap a few years ago, especially with #1. But after getting burnt on a few products, I am more willing to spend more on a quality item that is going to last me.

    • It’s good to know that you learned your lesson. I think I’m still learning mine… 😉

  6. Do I really need to answer this one? I’ve always made most purchase decisions on value rather than cost and that sometimes means spending more for an item. I’ve bought items because they were cheaper and that does not always equate to better value.

    • Haha, it took me a while to catch your sarcasm…Frugal Toad. Perhaps I should visit your site more often and learn how to be frugal instead of cheap!

  7. Hi Derek,

    Frugal or cheap… I’m cheap on clothes… I don’t know why but I always hated to buy clothes. I’m a manager and instead of wearing suits (I hate suits) I wear very casual clothes. I started slowly, one or two days per week and then three days per week and then no more suits! Other managers slowly started to do like me and now those who have suits look weird ahah! 🙂

    I should be more frugal or cheap with food. I spend so much money on food and restaurants…

    I tend to give a lot of tips while I don’t give to big organizations. People working at the minimum wage have a tough life. I’m trying to help them a little. I often leave big tips. So I’m far from being cheap on that…

    In the end I’m not really cheap and not very frugal either. I could definitely do a better job at cutting expenses. I already stopped spending more than I earn. I stopped using my credit cards. I also now save 30-40% of my salary on average but there’s still room to save even more!

    Thanks for sharing this with us

    • Sounds like you’re on the right track Allan! Saving 30-40% of your salary is a huge feat in today’s world of consumerism. Are you saving for a purpose? An early retirement? Or perhaps just a carefree one?

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