Download My FREE Income Ideas Cheat Sheet!
Make. More. Money. Join 20,000+ subscribers learning how to boost their income and take control of their finances.

Don't worry – we hate spam too. Unsubscribe at any time.

Frugal vs Cheap [Ultimate Guide]

Don't Work Another Day is reader-supported. We may receive compensation from the products and services mentioned in this story, but the opinions are the author's own.
  By Forrest McCall | Last Updated:  October 7, 2021

If you are someone who likes saving money more than spending money, you have likely been identified as one of two things – frugal or cheap. What are the differences between these defining words? It is critical to know the difference between cheap and frugal so you can effectively focus on your financial goals.

There is a fine line between the two that is vital to distinguish. A frugal person is very different from a cheap person, though both tend to refrain from spending unnecessary money. It is critical to know the difference between the two as one is generally better than the other. You should be saving money in a fulfilling way, both in your life and bank account.

In this post, I’ll explore frugal vs cheap, what it means to be frugal and cheap, and some ways to save money and live frugally. Le’t get started!

Definitions of Frugal and Cheap

The topic of frugal vs cheap starts with the definitions of the word. They are both pretty straightforward to understand. Each deals with a different way to spend money. Frugal people and cheap people both want to save funds as much as they can, but they approach this goal differently.

Keep reading to understand the definitions of frugal people and cheap people. Knowing frugal vs cheap can help you to make smart choices, ones that will save you money while permitting you to live your life. When you hear these words again, you can understand what they mean to you and the way you deal with funds in your life.

What Does It Mean When You Are Frugal?

Being frugal is more often a compliment than an insult. Frugal people are mindful about what they waste a few bucks on, but they don’t seek out a low price simply for the sake of saving as much money as possible. Frugal living means getting more value out of your financial decisions. The best deal will make a frugal person happier than falling into the habits of penny-pinchers.

Frugality is not wasteful. Those who adhere to this trait make more money by being prudent and making conscious spending choices. Their investments have a high value and last a long time. Money is a priority, but they are not willing to give up what they like and what makes life worth living. Being cheap is different.

What Does It Mean When You Are Cheap?

A cheap person wants to spend the least amount possible. When making purchases, cheap people enjoy saving money more than getting a great deal that is equal in the value it offers. A low price is the only thing that matters to a cheap person when looking at the bigger picture, as this will save more money in the short term.

A cheap person will invest in things and experiences that cost them the least, even if this means lower quality. They’ll splurge for cheap tickets or a free ride, rather than investing in moments and transportation that are enjoyable. Money is the focus of life, rather than making choices to decrease the cost and enjoy the sustainable object for the time to come.

Frugal vs Cheap

What Are the Signs of a Cheap Person?

Several indicators show if a person is inclined to cheap means. By understanding these, you can spot a person who looks for the cheapest price as a way to bring in money. You can also note if you are a person who values buying things at a low cost versus a great value.

Some of the signs of a cheap person are:

  • Desire for saving money: A cheap person prioritizes saving money rather than investing in things built to last. They want an instant way to save.
  • Inclination to low price: A low price is always the most critical item in a cheap person’s eyes. They will select a low price over quality any day of the week.
  • Impacting other lives: A cheap person impacts everyone around them, from family to the waitress at the coffee shop. Looking at the big picture, they should be easy to identify.

All of these are clear signs that reveal cheap people.

A good example of frugal vs cheap is with clothing. A cheap person will invest in affordable clothes, opting to save money. Frugal people would opt to buy one expensive item that will last. We will go over the signs of a frugal individual next.

Related: How to Be Fiscally Responsible

What Are the Signs of a Frugal Person?

If you are on the hunt for a frugal person, several signs give away a person who has this spending habit. Once you understand what sets them apart, it will be simple to distinguish cheap people from frugal people.

Some of the signs that indicate a frugal individual include:

  • Love of value: They prioritize value over a low price
  • Enjoyment of fun: They enjoy spending time doing things that matter to them
  • Resourcefulness: They are resourceful in what they spend their money on

All of these characterize a frugal person.

A frugal person tends to be more resourceful with the money they have. They make choices and shop with a plan in mind for saving. Rather than avoiding expensive opportunities and items, they indulge in the ones that make sense to them. A frugal person has a guideline in their mind of how they want to utilize their funds.

Truebill (Now RocketMoney) helps you take back control of your finances and start budgeting with ease. Register below to get started!
Register Now!
Disclosure: This link is an affiliate link, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Differences Between Frugal and Cheap

Now that you understand the basics of frugal vs cheap, we can touch on some of the differences that separate the two. These differences help clarify whether an individual is saving money in a way that is stingy or smart. Frugal vs cheap is a vital separation to clarify.

The biggest differences when comparing frugal vs cheap include:

  • Value in a purchase: Cheap people tend to invest in an item solely for the price (aka – you hate spending money). On the other hand, frugal individuals prefer to get as much value as they can from a piece.
  • Length of thought: Cheap people think in the short-term, valuing an instant way to save money. Frugal people look into the long-term and make their decisions for the future.
  • Impact on others:  A cheap person can harm those close to them and the world around them. Frugal people only affect their households and those they take care of.

These are just a few of the key differences between frugal and cheap.

Cheap and frugal are two different mindsets when it comes to the world of saving. Frugal tends to value purchase of quality, while cheap would enjoy something that cost them less out of their pocket. Read on to dive further into the difference between the two and how this might impact your life.

Is Being Cheap a Bad Thing?

The spending habits of cheap people seem unappealing to most. If you feel you fall under this money mindset, you might wonder if being a cheap person is a bad thing. After all, the word cheap tends to bring a bad rap along with it.

Though it may not seem like being cheap is a bad thing, there are many reasons why this way of saving money is not a great example of being smart with money. There are many impacts a cheap person can have on the world around them as well as themselves. Paying less is not necessarily a better thing for your quality of life.

Want to earn money shopping? Sign up with Ibotta to get $5 instantly! With hundreds of participating retailers, you can earn hundreds each year doing your normal shopping!
Sign Up Now!
Disclosure: This link is an affiliate link, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Why Being Cheap is Bad

There are several reasons why being cheap is a bad thing. It is vital to understand these so you have a better idea of the cases where more money in your pocket is not the best option. To get your fair share out of life, you should attempt to spend your money in frugal ways.

Some of the reasons why being cheap are bad include:

  • You might impact your relationships: By being cheap, you could harm the relationships you have in your life. Friends and significant others don’t want to be around a person who isn’t willing to spend money on them.
  • You could harm other lives: If you are cheap, you could harm the lives of others. A cheap person is more likely to tip a waitress less at a restaurant, impacting them significantly.
  • It can cost you more: Cheap individuals prioritize low cost over quality. The items they buy often fall apart quickly, meaning it costs even more money to replace the cheap item.
  • It decreases your enjoyment: If you are cheap, the cost may drive you away from doing things or investing in items you enjoy. You may stop enjoying life the way you once did, all for the sake of little extra savings.

These are just a few of the reasons why paying less all the time is not a good thing.

While being cheap might make a difference in the money you save, it can harm you and the people with who you come into contact. Cheap will only get you so far in life. If someone is calling you cheap, you may want to reconsider your saving habits and if you have gone too far. This tendency is not a good way of life to fall into.

Is Being Frugal a Bad Thing?

On the flip side, you might wonder if being frugal is a bad thing. After all, getting a good deal can easily slip into a territory that seems obsessive to most. If you adopt frugal means into your life, is that a bad thing? Should you take on frugal living? Those who consider themselves frugal will be glad to know that frugality will get you farther in life than being cheap.

Frugal people put a lot of thought into every purchase they make, and they are not as limited as those who take the cheap route in their investments. Read on to learn about the qualities that make being frugal something good to be.

Want to Make $150 With Paid Focus Groups? 💵
Survey Junkie is a great option to get paid to take surveys online and complete paid focus groups. You can make over $150 on qualifying focus groups you complete.
Sign Up Now!
Disclosure: This link is an affiliate link, meaning, at no additional cost to you, I will earn a commission if you register through my link.

Why Being Frugal is Good

There are quite a few reasons why being frugal is a good thing. It is critical to understand these so you can see the benefit of this mindset and perhaps adopt it for yourself. Those who think in this manner have a unique ability to save money and enjoy life while doing so, something cheap people cannot afford.

Some of the biggest reasons why frugality is good to include:

  • It allows focus on the future: Cheap people focus on the near future, but frugal people tend to look far into the years to come. This permits smart decisions that will last a long time.
  • It can be sustainable: Frugal people often invest in items that will last for a long time. This choice means fewer belongings will go to waste, helping out the planet at the same time.
  • It permits enjoyment: While cheap people will often skip out on the fun to save money, frugal people enjoy what makes them happy. They apply an informed mindset to what they do for the best results.
  • You still save money: Best of all, frugality still permits you to save money. The difference is that you can enjoy your life, your friendships, and your belongings along the way.

These are just a few of the reasons why being frugal is a good thing.

Rather than an unhealthy addiction, frugality is another way of viewing the world in your daily activities. Rather than force things out of your life, you can apply a frugal mindset and determine the smartest choice. Frugal people have more freedom to enjoy life while saving money. Frugality can bring a unique peace of mind to any individual.

Related: How to Live Below Your Means

How to be Frugal

How Can I Be Frugal But Not Cheap?

The line between frugal and cheap is very small. If you desire to save money, you might wonder if you can focus on being frugal without being cheap. Is it possible to remain frugal if you want to save money? What are some measures you can take when spending to ensure you become a frugal person rather than a cheap one?

Read on to learn more about how you can be frugal with your money, but avoid becoming cheap. It can be a hard barrier to maintain, but once you figure it out it is simple to set yourself in the mindset of intelligent financial choices. Saving cash should be fun, not stressful. If you are avoiding fun just for the sake of saving money you are not doing it right.

Be Intentional With Saving Money

When you save money, ensure you are intentional at the same time. Being frugal focuses on keeping with a purpose. There should be a routine you stick to when you go out. Make the way you avoid the full price purposeful to successful be frugal without being cheap.

To be intentional, you should make a plan for your spending for the week. Look at products you want to invest in, and determine if you hang out with friends. Your goals may change, but this will give you a rough estimate of how much will be leaving your bank account. From there, you can plan how much you want to save. Every financial move should have a purpose.

Enjoy Your Lifestyle Without Sacrifice

One of the things that set frugal people apart from their cheap counterparts is the sacrifices they make. Rather than giving up enjoyable lifestyles to save more money, frugal people are unafraid to spend a few dollars to enjoy the fun things in life. If you want to be frugal, don’t say no to items you can afford to obtain the lowest price.

Here are a few activities a person might enjoy if they are trying to be frugal:

  • Adventuring outside: There is plenty of low-cost things to do outside. You can ride a bike, hike on a trail, and even rock climb. Check out your local park to see if they offer any exciting activities.
  • Visiting public spaces: Public spaces can offer some activities for those on the go. You can check out your local library, go to a park, or take a plunge in a pool. You have to share with others, but it is frugal without sacrificing enjoyment.
  • Looking at museums: Many museums are free or discounted, particularly if you are a student or a senior. Check out local places where you live to find a frugal activity that is as educational as it is enjoyable.

These are all fun and affordable activities that someone being frugal might enjoy.

Of course, being frugal does not mean you have to stick with low-cost activities. It simply means making smart choices about the ones you do spend money on, rather than wasting cash on items you may not enjoy. Rather than going to a concert every month, select an annual one you and your friends can enjoy together. That’s a quality investment, rather than cheap.

Don’t Become a Cheapskate

Being a cheapskate is the clearest notation of a cheap person. Being frugal does not mean you have to be a cheapskate. This problem can be a driving factor in many of your relationships.

Some indications of a cheapskate include:

  • Failure to tip at a restaurant or giving a subpar tip after the meal
  • Investing in cheap clothes that fall apart rather than waiting for the name brand to go one sale
  • Refusing to go to certain places due to the price
  • Complaining about expenses constantly

These are all signs of a cheapskate.

Not only will this attitude harm your mental state, but it will also drive away those around you. Avoid becoming a cheapskate to stay frugal and allow your life to blossom rather than come to a standstill. You can still save and be smart with your money while having fun with the people you love.

Eat and Drink In

Eating and drinking out is one of the biggest expenses for most people. These items can add up quickly. While it is completely fine to have fun every once in a while, it is possible to have just as much of a good time eating and drinking from your own home. You can buy the supplies you need and make meals to last for days.

Rather than going on, a frugal person might:

  • Make coffee at home before work, rather than spending money on a drink out
  • Invite friends over to make food, rather than splurging on a big meal
  • Make a budget for eating out, still permitting time to enjoy those investments

These are all items a frugal individual could take on, rather than constantly spending money on eating and drinking in a restaurant or cafe.

It is vital to clarify that this doesn’t mean you should avoid having fun out every so often. A cheap person will stay away from fun altogether to keep money in their pocket. Instead, it means making a conscious effort to spend money on enjoyable things and make intelligent choices about how often that should occur.

If you catch yourself staying in to save money, you are leaning on the side of cheap. This action is fine but might result in losing friends or a sense of unhappiness as life turns into a race to save as much money as possible.

Buy Used When Logical

One of the best ways to get a low price is to buy used. While a cheap person will cut the cost on every item by investing in used, a person who has adopted frugal means should buy used when it makes sense. If it is better to get it new, get it new. However, if it makes more sense to continue prudently saving by investing in used items, buy them used.

Other examples of logical used decisions include:

  • Shopping at a thrift store for clothes and other closet staples that need replacing
  • Investing in furniture used and retouching it, or taking pieces passed down from family members or friends
  • Looking for books and other items at preowned stores

All of these are great examples of buying used items logically.

Other items are more practical to buy on sale or new. These might include dishware, shoes, and anything that is not usable if owned before. Being frugal does not mean everything needs to be used, but it does mean taking advantage of preowned price markdowns when the time is right to do so.

Test Your Choices to Save Money Frugally

If you are unsure of your spending habits, test your choices to see if you tend to spend money in the manner of a cheap person or a frugal person. Once you determine where you land, you can decide what changes you want to make in your life to save money more effectively and positively.

Answer these questions honestly to help determine whether your habits fall under the category of cheap or frugal:

  • Do you check the price right away when you find something you like, or do you examine the quality and necessity of the item in your life?
  • Do you complain about things that cost a lot of money, or are you able to pick yourself up and move forward?
  • If someone asked you out to have fun, would you try to find coupons and deals to make it cost less or stay home out of fear of spending money?
  • Do you donate extra money or hang on to it out of fear that you might need it one day?
  • Do you buy brands you love on sale or buy a cheaper version if it’s available right away?

How you answer these questions shows whether you are saving in a way that is effective to your life.

In the end, perception is the main difference between these two. Saving money for the sake of saving money is different from making logical choices with finances. You shouldn’t be wasting your funds, but you also shouldn’t be depriving yourself of joy just for the sake of keeping everything hoarded in your account just in case.

If you fear cheapness is consuming your life, take a few steps back and work on your mindset. If you want a new pair of shoes, wait for the name brand to go on sale rather than buying a cheaper pair. You can print coupons when you go out to eat. Find free and fun activities to do with friends. Start to focus on the value of what you invest in rather than the price tag.

Related: Why Am I Broke? Here’s Why!

Frugal vs Stingy

You might also be wondering what the major differences are between being frugal and stingy.

Being frugal means looking for the best value in a product or service vs searching for the lowest price.

For example, if you don’t like to paying for items that are more expensive just because of the price tag – you could be considered stingy. If you’re willing to pay for a item that is a good value – that’s more frugal.

Related: 67 Cheapest Foods to Save Money

Final Thoughts on Frugal vs Cheap

Frugal people and cheap people both want to save money, but they have entirely different approaches to the world of low spending. A frugal person prioritizes value over price, saving money by investing in things that matter to them. A cheap person, on the other hand, wants a low price above all things. They will select one brand over the other whenever cost is a factor, based on cost.

If you want to save money, you should aim to be frugal rather than someone cheap. Cheap and frugal are two varying things, and the difference between them is vital. Save money by making quality purchases instead of buying junk. This action will allow you to enjoy the life you’re living while saving up for the future that is still to come.

Forrest is a personal finance, entrepreneurship, and investing expert dedicated to helping others obtain life long wealth. He has a Bachelor's degree in business and has been featured in many popular publications including Forbes, Business Insider, Bankrate, CNET Money, and many others. To learn more about Forrest, visit the About Us Page for more info.
Download My FREE Income Ideas Cheat Sheet!
Make. More. Money. Join 20,000+ subscribers learning how to boost their income and take control of their finances.

Don't worry – we hate spam too. Unsubscribe at any time.