What is the first word that comes to mind when I say the word frugal. Cheap? If so, you are not alone. Most people tend to incorrectly associate being frugal with being cheap, when in fact they are two entirely different ways of looking at financial life. Dictionary.com defines frugal as “prudently saving or sparing; not wasteful.” The same online dictionary service defines cheap as “stingy; miserly.” But the differences don’t stop with the words’ definitions. Frugal people spend, give and consume a little differently than their”cheaper” counterparts.
Followers of frugality generally believe in being lightweight consumers of resources, whatever those resources may be. For instance, many frugal people prefer to make meals from scratch rather than paying several times for the cost of equivalent foods at a restaurant. Cheap people also frequently look for deals, but still could be heavy consumers of resources. Many cheap people will buy things on sale just because they are on sale, not because they really need them. Frugal individuals hunt for sales, too, but buy only enough to live on for the immediate future.
Need more evidence? I’ll use myself as an example. I appreciate value in a product, even if it costs more than a cheaper alternative. My time is important to me, so I’ll pay a little more for convenience items in a pinch, or shop at a nearby store to reduce the commute time to drive to another area just to save a couple dollars. I recognize good service, and am willing to tip extra to show my appreciation when I receive it. In fact, I typically leave minimum 20% tips when we dine out and receive exceptional service. After all, we don’t eat out that often, and the two or three dollar difference in 10% and 20% doesn’t change my world much, but it may mean the world to our server. I enjoy giving to help family members, friends and strangers. In fact, one of my life goals is to become so wealthy that I can play Secret Santa and give a lot of it away.
The typical cheap person generally displays the polar opposite qualities. When it comes to shopping, many cheapskates will drive all over town to save a few cents on a gallon gasoline, or a loaf of bread. These types will pass up sales on quality products because the final price is still higher than the cheaper alternative. Many would never consider tipping anything above the 10% rule, even if it meant counting out the $3.90 on a $39 bill – come folks, round up and live a little!
The one thing I have found that frugal folks have in common with cheap folks is there willingness to give, however they typically do it in different ways. Frugal individuals enjoy making monetary donations for causes they believe in, while their cheaper counterparts prefer to donate non-monetary gifts such as their time, their services, etc. Both types of givers are required for most charitable programs to be successful, so there is a place for each type, and I’m certainly not discounting the good deeds others have done without shelling out cash.
I honestly believe there is a little of each category in all of us (by “us” I mean those minding their money). I encourage you to think about ways you may be perceived as “cheap” and move towards frugality. I should take my own advice here and stop trying to buy the 1000-count cheapo napkins at wholesale clubs that my wife insists could double for sand paper. I think I’ll make her day and show up with a few packs of Bounty napkins next time I’m out (I have two coupons!).