Happy 2017 everyone! Instead of starting the New Year with a post about financial resolutions, I wanted to focus on a subject that bothers me: Cheap or frugal? It absolutely drives me nuts when people call me cheap. Yes, I like to save money, but that doesn’t mean I’m cheap. I just prefer to spend money on things that mean a lot to me.

Honestly, calling a frugal person cheap is pretty insulting. Frugal people understand the value of money and are willing to pay when it counts. On the other hand, cheap people are only looking for ways to save money regardless of how it’s done. When you think about it, figuring out the difference between cheap and frugal people is pretty obvious when you look at certain situations.

cheap and frugal people

Eating out

Frugal and cheap people both eat out, but they do it in different ways. Frugal people are always looking for value options (don’t confuse this with the value meal), and will usually opt for water instead of drinks. Cheap people may try to manipulate you when eating out. When sharing meals with friends, they might suggest splitting the bill equally when they know they spent more than the rest of the group.

Spending money

Cheap people do not like to spend money! Honestly, cheap people don’t like to part with their cash, and when they do, they look for the lowest price possible. Some cheap will buy the cheapest groceries even if it affects their health. Frugal people prefer value and understand that getting the right product or service may require spending more money. They’ll consider the different price points and options before making a decision.

Entertainment

This is one area where cheap and frugal can be interchangeable in the right situations. Choosing not to go to the movies because it costs too much is a valid point for both cheap and frugal people. I would say cheap people end up spending no money on entertainment, but that wouldn’t be fair since there are many free ways to stay entertained. I might be over generalizing here, but I want to say that cheap people are so cheap, that they won’t even spend money on home internet. To stay entertained at home, they’ll just borrow movies from the library. Again, this isn’t a bad thing, but no internet at home? Come on!

Travel

Frugal people are smart about their travel. They look for ways to save on flights and hotels, and they take public transportation to help keep their travel budgets reasonable. Cheap people who do travel will always opt for the cheapest option such as taking a long bus ride instead of flying. While travelling, frugal people will balance their experiences by looking for free things to do while spending on the things they really enjoy. Cheap people will refuse to spend any money at all which practically defeats the purpose of travelling.

Knowing what matters

Frugal people always understand the value of a dollar, but they’re willing to spend when it counts. Cheap people tend to complain about the price of things even if the prices are the accepted norm. Listen, I don’t enjoy paying $40+ for my cellular service, but that’s what it costs. Cheap people don’t want to part with their money at all!

Final word

I admit, the difference between cheap and frugal can be difficult at times. To be honest, the people who call me “cheap” are usually ones who have no concept of saving. Instead of trying to brand people like me, perhaps it would be a better idea to look at your own spending habits and figure out if you can be doing better.