Is Saving Money Frugal or Cheap? Know the Difference

Is Saving Money Frugal or Cheap? Know the Difference

What defines a frugal person (or family) is vastly different from what defines a cheap one. There is a certain strength of character and wit that a smart, frugal lifestyle embodies. Often though, the "cheap" approach is fear-based.

The difference in mind set and philosophy that separates these two lifestyles is key. The frugal and cheap person both like saving money, but being frugal will give you power over your money. If you're not sure which of these words defines you -- or you're hoping for some guidance on how to move from being cheap to frugal -- here are some concepts that will benefit you.

 

"I Can't" vs. "I Choose"

 

If you often find yourself telling friends "I can't," you may need to borrow a few replacement phrases from the frugal. How many times have you told your kids, "Sorry, but we just can't afford that right now"? It's an easy pattern to get into - especially when the kids ask for something every few minutes. But consider replacing that oft-used statement with, "We're choosing to save up for our trip to Disney, which means that new 3-D movie will have to wait." Moving from the mindset of "I CAN'T" to "I CHOOSE" is a powerful one where your money is concerned. Not only does this put you in the driver's seat, it instantly changes things from negative to positive. The result is a refreshingly secure way to live.

 

Cost vs. Value

 

The difference between cost and value can seem a bit like splitting hairs. But where frugality is concerned, the difference is remarkable. The cheap person often spends hours searching for a product at the lowest possible cost, irrespective of its quality. The only goal is spending as little as possible. Contrast this with the frugal person who understands the value of the product as well as the value of saving money by finding a quality item at a lower price. For instance, let's say you've been dying to get that new French-door refrigerator with the bottom-drawer freezer. The cheap person would purchase the lowest-priced one out there even after reading hundreds of one-star customer reviews. It's always wise to consider whether the cheaper product will actually cost you money once other factors are considered.

In this case, the frugal, circumspect consumer will spend more up front to save money (and a headache) later.

 

Short-Sighted vs. Long-Term Thinking

 

Being frugal takes time, dedication and patience. It can often require delaying some short-term pleasure to fulfill your long-term financial goals. The cheap person fails to understand this concept and thinks only of short-term savings. Learning to be a truly frugal person provides endless long-term financial benefits while at the same time saving you money. It's a win-win!

 

Relationships vs. Stuff

 

Frugal folks are smart enough to put valuable people before valuable possessions every time. They know who's important in life and will sacrifice their own comfort to benefit loved ones – to a point. Cheap people complain that everything is overpriced, including the costs of being a good friend, family member or citizen.

 

We know that changing your money saving philosophy can be challenge. Let these tips provide you with some inspiration for where to begin. If you're hungry for more ideas on how to develop a frugal lifestyle, West Virginia University has published a smart piece packed with ways to do just that. And don't forget to follow Coosa Valley Credit Union on social media for a steady flow of money-saving tips straight to your news feed.

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