While frugal can sound like a four-letter ‘f’ word instead of six, we have found a lot of benefit in embracing a frugal lifestyle. Being frugal often gets a bad rap, and this may be because it gets confused with being cheap, so we’re here to settle the score. The difference between being frugal versus being a cheap tightwad comes down to the mindset around money, as well as the intentionality behind spending–or the lack of–spending money.
The difference between being frugal versus a cheap tightwad
Sometimes it’s the approach and not the destination that makes the difference. This is true in life and when discussing cheap versus frugal. In both cases, the goal is to spend wisely. The difference comes down to the focus.
That’s right, it’s a mindset thing. And we’re all about how mindset helps with your money, so let’s compare cheap versus frugal, then dive in by looking at examples to showcase the difference.
| Cheap | Frugal |
| Focuses only on cost | Focuses on cost versus quality to determine the best value |
| Will buy something that’s not optimal because it saves money | Will spend more on something that’s worth it based on what they value |
| Avoids spending money even when necessary | Looks for discounts and deals (coupons!!!) but will buy what they value/need |
| May buy something that’s a “good deal” even if they don’t want that specific thing | Assesses each purchase, not spending excessively or impulsively |
| Can be stingy when it comes to others | Can be extremely generous |
| Focuses on short-term saving | Focuses on long-term saving & values |
| Thinks spending is bad | Thinks waste is bad |
| Often skips experiences to avoid spending money | Spends their money with intentionality |
Is it cheap or is it frugal: examples to see the difference
Stingy versus generous
Cheap and frugal people both aim to save money, but cheap people may do so at the expense of others. Let’s look at eating out as an example.
We’re frugal people who aren’t foodies, but we like hanging out with our friends. If friends invite us to go out with them, we like to socialize. Since we don’t put a lot of value on the food portion of the experience, we often eat and drink before or after meeting up and then split an appetizer at the restaurant to save money. This makes us frugal.
Regardless of what we get, unless the service is truly horrendous, we always tip 20%+ because we’ve both worked in hospitality and understand that some people make way too big a deal about their bottled water. Leaving a small tip in a country where tipping is the accepted practice is cheap and will get you labeled a tightwad.
Remember Rachel’s successful father on Friends who never tipped much? He was cheap, not frugal.
Spends money with intentionality versus doesn’t spend money
Frugal people like to save money by spending with intentionality based on what they value, while cheap people just don’t spend money. My favorite example of this is travel. We place a high value on traveling and experiencing new places and cultures. Cheap people will opt out of these experiences because they cost too much, which is sadly what I did for a lot of my twenties and wish I could do over. You don’t get back the decade where you can comfortably sleep on the cheap red eye flights.
As a refined tightwad, we travel a lot more, but we’re still mindful of our vacation budget and spend it intentionally. We “splurged” for the seaplane option to go to Dry Tortugas National Park versus taking the ferry because we found the cost versus value worth it. But then we only stayed in Key West for two nights (because barf at those prices) and spent the rest of our vacation near Miami because that value to cost didn’t justify more nights. We weren’t afraid to spend on those experiences, but in a mindful way.
Focuses on cost versus focuses on value but looks for discounts and deals
We found when moving cross country that you can snag some great deals and make some money on Facebook Marketplace with used items. So when we finally settled into a house in Colorado, we kept this option top of mind. We were setting up a home gym and my husband wanted a pair of adjustable weights because a full weight set takes up a lot of space that we didn’t have. He found a pair that he really liked that were more versatile than the set he had in Florida that we sold. Before he purchased a new set online, we searched Facebook Marketplace. There were a few sellers who had the exact set he wanted. One was the same cost as a new set. Another was $40 cheaper, but we would have had to drive 45 minutes to pick them up versus getting free delivery.
A cheap person would have hopped in the car to save $40. Actually, they might have opted for a set that was even cheaper (this set was close to $200) even though it sacrificed the functionality they wanted.
But time is a precious resource to us in this stage of life. The value of our time was worth more than $40 for that 45 minute drive, especially when coupled with the hassle of dealing with shady sellers on Facebook. So we opted for the new set, but only after looking for better deals.
Spending is bad versus waste is, well, wasteful
Cheap people see spending money as bad, while frugal people see spending more than something’s worth as bad. Let’s talk shoes now. I used to be cheap and would shop the discount options at Payless, even though their sandals gave me blisters and made my feet cramp up when walking on the packed sand of Florida beaches. As I got older, I realized shoes are the only connection our feet make with the ground, and I walk a lot. So spending reasonable money on good shoes is worth it. Goodbye cheap, hello frugal. Now I still wear my shoes a little past their prime (frugal), but I replace them when I’m out of treads for another $80 pair that my feet really like. No one wants to be cheap and end up with Monica’s boots.
Buying a bunch of the same shoes, or buying a bunch of shoes I don’t wear because they made me scream in agony–that would be wasteful. Buy buying shoes that are comfortable and keep my feet happy? There’s value in that for the frugal folks.
Foregoing necessary expenses versus valuing function
Cheap people often avoid replacing broken items, while frugal people balance the value of function versus cost. When my husband was in college, he had a car that didn’t have working A/C. Living in Florida, he had to take a spare shirt with him to change into on campus and at work because he’d sweat through the one he wore driving. He was cheap because he was broke as shit. It was a necessary evil at the time to get through school.
In our early 30s, the lock malfunctioned on my car door. We looked at getting it replaced, but Ford no longer made the parts and it was a common defect, so we couldn’t find a replacement at the junk yard. It was an inconvenience but not worth getting a new car over, so we learned to unlock it from the passenger side and crawl across. The cost of the solution wasn’t worth the value in this case. But when the A/C compressor blew on a road trip back from the mountains? The car was in the shop the next weekday. Goodbye cheap, hello frugal.
Rules to successfully navigate being frugal without being That Guy
Are you ready to make the change from a cheapskate or overspender and join us in the magical frugal realm? Here are a few rules to help you successfully convert to a frugal lifestyle.
- Don’t be afraid to spend money on yourself or others.
- Don’t buy stuff just for the sake of buying stuff.
- Focus on spending with intentionality based on your values, and make sure your values aren’t entirely money driven.
- Don’t buy crap. Focus on quality over quantity.
- Remember your time has value too and factor that opportunity cost into your decisions.
- Don’t take it personally if someone thinks your new frugal lifestyle is, well, cheap. As long as you aren’t actually being cheap, brush your shoulders off. You shouldn’t give 99% of the people you know a voice in your decisions.
- Similarly, don’t judge others. That’s no winner in the comparison game, and other people might not have the same values or focus. Your frugal will look different from someone else’s.
- You are who you hang out with, so find people who are living a life you admire and sync up with their social circle. It’s easy to stay frugal now that we live in a heavily populated FIRE community. It would have been a lot harder if we’d moved into a neighborhood where everyone was watching the Joneses with binoculars.
How to shift away from being cheap to embrace the frugal mindset
If the examples above have you worried about where you land on the frugal versus cheap distinction, fear not my friend. I have been there. In fact, I found myself realizing for the first time while drafting this article that I used to be cheap. The keyword here is used to. It’s possible to change with a little reframing and focus. The following guidance can help you turn around that tightwad reputation into a frugal lifestyle you can be proud of.
Determine what matters to you
The first step of our FIRE ladder for financial freedom is to determine your money goal so you can lay out a plan to reach it. The same holds true for shifting to a frugal mindset. Frugality is all about saving money on things that don’t matter while focusing your budget on what does matter. If you don’t know what your priorities are, then you can’t prioritize your spending.
Balance quality with cost
Being cheap is all about spending the least amount possible. Being frugal considers how long something might last and factors in the cumulative cost over time. Being cheap leads to buying Ryobi tools and shopping on Temu. Which, no judgment. We had to live through owning a Ryobi edger in my cheap era before we realized it was worth spending more on Stihl because you wouldn’t have to replace a Stihl every two years. Even though the Stihl cost more, it was the better decision in the long run. And buying a used one saved us over 50% off compared to buying a new one. Frugal.
Challenge your impulses and question your purchases
I love me a good deal. Sales or coupons: bring them on. It took me years to realize that buying two things of sour cream for the price of one and then throwing one out because it went bad before I could finish it didn’t actually end up saving me any money. And buying microwavable yakisoba meals when I could stack 50% off with a coupon when I didn’t actually want to eat that highly processed food wasn’t the best purchase, even if it was a cheap meal. There are seasons of life when we need to be cheap: I ate PB&J sandwiches every day of my summer internship because I only made a few hundred bucks a month. Such is life. But being cheap just to save money when you have money? Let’s question the necessity. Skip the yakisoba and get yourself that steak if that’s what you value and can afford.
Go slow and have grace
When you’ve been cheap for so long, especially out of necessity, it’s hard to learn to spend money once you have it. I constantly justified why I should wait to purchase something, even though it aligned with my values or talked myself out of buying it completely. (The opposite can also happen.) This wasn’t healthy behavior. At some point, I had to learn to purchase the Stihl over the Ryobi. It took practice, and I often felt guilty when I spent more than I “thought” I should. But you can’t let those thoughts win. It takes time to break this thought pattern. New mindsets don’t develop overnight. Be patient and kind with yourself as you work to rewire the way you think about money.
The final word
Being frugal doesn’t mean never spending money, but being a cheap tightwad can often mean not spending money, even at the expense of what you value. With a frugal mindset, you’re more intentional behind each dollar you spend, ensuring it aligns with your personal and financial goals. People often assume this means you must sacrifice enjoyment, but I’d counter that being frugal can actually lead to more enjoyment thanks to the focused intentionality.