When it comes to spending money and money management, almost everyone wants to double-check the figures before swiping their credit cards. Even wealthy people don’t want to miss out on a chance to cash in on some discounts.
However, when you try to save a few bucks, people may see you as a cheap or frugal person. Who cares? No one should dictate to you how you spend your money. After all, you made it yourself. But it is essential to understand your spending character. Therefore, this article explains the differences between cheap and frugal people.
It is not a bad idea to look for the cheapest offer when shopping online or waiting until an item is discounted before placing an order. However, it may portray you as cheap if that happens at the expense of comfort or quality. On the other hand, looking for the lowest price with the best quality can make one seem frugal with resources. As they say, there is a thin line separating cheap and frugal.
A frugal person will want to be certain that they are getting value for every dollar spent. However, a cheap person will insist on getting the cheapest offer available, even if it means lower quality.
One of the best ways to explain the difference between cheap and frugal people is their spending behavior when running on a tight budget.
Our spending habits differ, and that’s why some people prefer to get fairly-used products instead of going for new ones. But that does not exactly define anyone as cheap or frugal. The following paragraphs further explain the difference between cheap and frugal people.
The bottom line for cheap people is price; for frugal people, it is value
Frugality places a focus on value over the cost of an experience or a product. A frugal person would emphasize the importance of getting value for every cent they spend. They may take some time to investigate which choice brings them the most value at the least price before parting with their money.
On the other hand, a cheap person is fixated on the cost of a thing, with minimal regard for value. Being cheap means that you would prefer buying cheap groceries over getting fresh and nutritious ones.
A cheap person is mainly interested in saving money even in situations where it’s obvious that a compromise is the better choice. For instance, a frugal budget will buy a second-hand desktop printer that works just fine, while a cheap budget is merely interested in paying less for the same product.
Read Also: Why Saving Money Feels So Hard
Frugal people spend on necessities, while cheap people hardly do
Cheap people have a penchant for spending only when it’s inevitable. They prefer to run in ordinary trainers because they want to avoid spending hundreds of dollars on just running shoes. Cheap people think that everything is overpriced, and they’re always eager to haggle over the price of anything.
Frugal people don’t mind spending on things that make life easier and simpler. They’d rather part with a few more bucks just so they’re able to have things run smoothly. This does not mean that they don’t evaluate their spending, but they make sacrifices when necessary.
Cheap people don’t mind saving more at the expense of quality
A cheap person is merely interested in cashing in on every discount without a second thought. A frugal person doesn’t mind giving generous tips and leaving the cashier’s change at the counter. After all, if service was great, it won’t harm a bit to appreciate the individual who spearheaded your pleasant experience.
Although this may seem over the bar, a cheap person would hardly think of it. Instead, they would wait behind the counter until the cashier gives them every cent of their change — tips are just expensive and unnecessary. When it comes to saving more, quality doesn’t count as much for a cheap person. The natural impulse is to grab the cheapest offer. Interestingly, such people fail to take into account the cost of settling for cheaper and lower quality items or services.
Frugal spenders are sometimes better money managers because they see the bigger picture
A frugal spender turns out to be a better money manager than the cheap spender in the long run. Frugality places a focus on managing resources than merely settling for the least expensive alternative.
For instance, if faced with the choice of buying a new vehicle at a lower price or paying much less for a fairly used one, a frugal person may opt for the first option. In this case, the frugal spender is concerned about the quality of a new vehicle. But, a cheap person is only interested in spending less. In the long run, they may find that they need to spend more to bring the new purchase up to par, thereby spending more than they initially bargained for.
A frugal person also makes a down payment after securing a loan to cut down the amount of interest to be paid later. Under the same circumstances, a cheap person may skip making a down payment, not minding higher interest later. Once again, a frugal person is not a spendthrift, but they don’t mind saving more money when the opportunity strikes.
Cheap people don’t bother about taste
The question of taste and style is irrelevant to a cheap person. While frugal people may not necessarily be particular on style and taste, they’re willing to go all out when it comes to comfort and personal image. They would dislike being perceived as cheap.
Frugal people are quite keen on quality. Hence, they can delay other purchases to save some extra dollars to get the quality they want.
The difference between cheap and frugal people lies primarily in their natural inclination towards spending. While a cheap person will naturally settle for the cheapest offer on display, a frugal person stops and asks which offer has the best value for the best price before paying.
Tycoono Media Inc. and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. Please refer to our disclaimer for more information.