Frugal vs Cheap: The Difference Between Frugal and Cheap

Being frugal is not the same as being cheap. There are significant differences between the two.

Frugality is a way of approaching your finances. It’s a way of being mindful and strategic with your spending. A frugal person focuses on value and saving money for the important things in life.

A cheap or stingy person avoids spending money and makes financial decisions based on price. Things like value over time, life satisfaction, and other people’s feelings do not influence their spending habits.

What’s the Difference Between Cheap and Frugal?

The difference between frugal and cheap is in the attitude toward money. Being frugal is about spending according to your priorities, getting the most value, and not being wasteful. Being cheap is about spending as little money as possible and choosing the lowest price despite the consequences.

A cheap person and a frugal person both aim to save money. The key difference is they have different attitudes and approaches to saving money.

Cheap vs. Frugal

Person holding a dollar bill with both hands.

A frugal person doesn’t hate spending money. They don’t buy things for status, attention, or self-esteem but are not afraid to spend. They consider long-term financial goals, quality of life, value, and how their behavior affects others.

Being cheap is about spending as little as possible and opting for the lowest-priced items. Frugal people try to get the most value for their money.

For example, you could purchase the cheapest mattress you can find. When you toss and turn all night and then wake up exhausted with back pain the next day, was it worth the money you saved? A frugal person can spend the additional money on a good night’s rest without fear, guilt, or resentment.

If you run or go for long walks for exercise, a cheaper pair of sneakers won’t do. You might have no problem shelling out more money on high-quality running shoes. If you only cared about price, you could hit Walmart or scour shopping malls and online stores for rock-bottom prices and then buy the cheapest pair of shoes possible.

A quality pair offers arch support, cushioning, and durability, which cost more. Cheap shoes won’t provide those things. Spending more on higher-quality items, especially when they might impact your health, could save you far more money in the long run.

Cheap people want to save money above all else. They sacrifice quality and their time to squeeze out short-term savings. They’re driving to a store half an hour away to get the lowest price on scratchy, off-brand toilet paper.

Frugal people look at cost in the context of the total value. The types of things a frugal person might think about before buying something might include:

  • Longevity
  • Service and maintenance fees
  • Replacement cost
  • Energy consumption
  • Time savings
  • Overall satisfaction

After considering value, it might be wiser to spend more upfront. Sometimes, the cheapest product offers the most value. But frugal people don’t zero in on the lowest cost option immediately without considering the alternatives.

I’m not satisfied with a cheap item I will have to fix or replace sooner rather than later. I occasionally suffer from frugal fatigue, but I always keep the big picture in mind instead of spending like a madwoman or trying to squeeze an extra dollar or two in the short term.

Is Being Frugal Bad?

Being frugal is not a bad thing. Frugality is being intentional with money, maximizing value, and making financially sound decisions. Being extremely frugal can hurt more than help, though. If you focus only on saving every dime instead of investing, being frugal can cost you money in the long run.

Is Being Called Frugal an Insult?

Being called frugal is not an insult. Being frugal means being smart and exercising good judgment when spending money. Frugality is about spending money wisely, considering value, and prioritizing long-term financial goals over unnecessary spending and small short-term savings.

Being called frugal is more of a compliment than an insult. When the term frugal is used to mean cheap, stingy, or greedy, then it’s insulting.

Why Is Being Cheap Bad?

Here are five reasons why being cheap is bad:

  1. Cheap people often place more value on money than anything else, including relationships. They don’t recognize the signs that their relationships are affected or deteriorating because of their cheapness.
  2. Cheap people can be shortsighted and obsessive about money. They might display selfish behavior, show little gratitude, and lack generosity.
  3. Cheapskates can be cheap to their detriment. Avoiding the doctor to avoid paying the out-of-pocket costs is not smart. Saving a few bucks by skipping routine auto maintenance is dangerous but also something a cheap person might do.
  4. Cheap people make others uncomfortable. Cheap people routinely do offputting things like stiffing waitstaff on tips, criticizing others over how they spend their money and mooching off others. Some of their behaviors are detestable and hard to be around.
  5. Cheap people sometimes place saving money over honesty. Some people are cheap enough to steal a neighbor’s Wi-Fi or crash a wedding for free food and drinks. Not all cheap people are dishonest, but the quest to save a dollar can lead people to lie, cheat, and steal.

Is Being Cheap Always Bad?

Being cheap does work for some people.

If you’re middle-aged, have raised your family already, are established in your career, and have a solid social life with friends who accept you as a cheap person, that’s great. Pinch a penny until it screams. Reuse paper towels, go miles out of your way to find the cheapest prices, and raid thrift stores for incredible bargains.

Most of us aren’t there yet.

For me, being a cheap person costs too much. I’m unwilling to waste time, wreck relationships, and sabotage my happiness to save a bit of money.

How Being Cheap Is Expensive

Sometimes focusing on cost and going with the cheapest option backfires. You’ll waste time and money paying for repairs and replacements you could’ve avoided if you spent a little more on quality.

For example, you could buy the cheap $20 brand you have to replace yearly or the $50 brand, which lasts ten years. Cheap people immediately opt for the $20 version. They’re appalled at paying over twice as much for the same basic functionality of the more expensive item.

People tight with money and stuck in that cheap mindset only see the price. They don’t see the $50 option costs $150 less over ten years and requires only one trip to the store rather than ten.

Someone who automatically buys a $20 product because it’s the cheapest item is not a thrifty person. They’re just cheap.

Can Being Frugal Make You Rich?

Being frugal won’t make you rich. There is a limit to how much you can cut spending since some expenses are unavoidable.

Being frugal frees up money to achieve a financial goal, such as paying off credit card debt or starting an emergency fund. Increasing income and investing offer more potential to build wealth than frugality.

The idea that you can bank on frugality to reach your financial goals is too simplistic. Skipping lattes isn’t the key to creating wealth, and cutting out avocado toast or other small, unnecessary things you buy won’t make you rich.

In the real world, housing costs, healthcare spending, inflation, and unemployment sometimes skyrocket. Unexpected events like car accidents, family emergencies, and layoffs happen. These things hurt you financially more if you’re unprepared than saving $3 a day on coffee helps you.

Besides cutting out minor money leaks and adopting a frugal mindset, look at the big picture. Is there a way to lower your housing costs, get out of debt faster, or spend less on transportation? Can you start investing or funnel more money into your existing investment accounts?

To build real wealth, most people will have to shift their focus to making more and investing money over time. Getting a raise, starting a side hustle, creating an aggressive saving strategy, and automating your investments help you build for the future.

There are no hard limits to how much you can make through investing or increasing your income. Reducing your expenses has a definite floor. You’ll always have some expenses like food, shelter, utilities, and clothing.

How To Be Frugal Without Being Cheap

Person stuffing dollar bills in their wallet.

You can be frugal without being cheap by understanding the difference between price and value. A cheap person cares only about getting the lowest price. Frugal people look at price as one factor that determines value.

You also have to be clear on your financial goals. Does your spending hurt or help you reach those goals? Buying a reliable used car and driving it for years instead of buying a new car every two years doesn’t mean you’re a cheapskate.

Consider how your decisions impact others. That awareness will often stop you from crossing over from frugal to cheap.

Cheap people don’t care if their penny-pinching embarrasses others, hurts someone, or causes resentment. That’s one of the major differences between frugal and cheap.

Here are some frugal living tips and a few more ways you can live a frugal lifestyle without being cheap:

1. Focus on Reducing Your Important and Unavoidable Expenses

You don’t want to be penny-wise and pound-foolish where you cut out something small but overpay on something major.

Is there a way to lower your housing costs, cut transportation costs, or refinance your student loan debt? Have you done any comparison shopping for insurance?

You can do plenty to save small amounts of money here and there. Little expenses you can eliminate add up, but don’t forget that being frugal and smart with your money also applies to the big expenses.

2. Eat and Drink at Home

I won’t hit you with the “avocado toast is making you poor” argument. Starbucks is not a waste of money if you pay yourself first and handle your bills responsibly. Coffee, cocktails, and meals cost more outside your house, though.

You can put four figures back in your pocket every year if you give up your daily latte. You’ll save another four figures annually if you bring your lunch instead of buying it every day and cut down on restaurant meals.

Embracing cooking for yourself and your family doesn’t make you cheap. Not spending three bucks on coffee when you can make your own at home for a quarter and take it with you in a travel mug is frugal, not miserly.

3. Don’t Be Stingy With Friends

Nobody wants to go to dinner with the person who starts an argument when the check arrives. The exact percentage of nachos you ate and what that should cost down to the penny shouldn’t matter when you’re among friends.

Save your world-class math skills for starting a budget or planning your retirement. Negotiate hard with car dealers, insurance reps, and real estate agents, not your friends.

Unless you honestly believe your friends take advantage of you, split the check. It doesn’t matter who ordered dessert and who didn’t. Your friendships are worth more than your fair share of dinner at Applebee’s.

4. Buy Used When It Makes Sense

There are some things I would never buy used. I’ll spring for new tires, a new mattress, or a new swimsuit every time.

Other things, like cars, sporting goods, and books, I’m delighted to buy used as long as they’re in good shape.

New cars lose much of their value in the first couple of years. Insurance usually costs more for new vehicles as well. If you’re willing to shop around, plenty of reliable used cars with low maintenance costs exist.

When we ditched our gym memberships to work out at home, we found weight plates and a barely used rowing machine on Craigslist for a small fraction of what they would cost new.

My husband also has a nice collection of tools mainly acquired through garage sales or handed down. We’ve also bought used furniture, a fridge, bicycles, and baby clothes.

The fact that these things are secondhand has never caused us any issues or regrets.

5. Don’t Pay Full Price

Paying full price for almost anything these days isn’t necessary. If you can be patient and comparison shop, you can buy most things at a discount.

There are also coupons, rebates, cash-back apps like Ibotta and Rakuten, and cash-back credit cards. You can sometimes combine these discounts by using a coupon for a sale item and then paying with a cashback card.

Buying things like clothes, grills, and outdoor stuff out of season can result in considerable savings. Fruits and vegetables are much cheaper when they’re in season.

6. Forget About Brand Loyalty

Sticking to one brand or only shopping in one store stops you from comparing prices and finding newer or better products.

I know it can be difficult. For years, I couldn’t accept any substitute for Diet Coke.

Unfortunately, the Coca-Cola company never loved me back. I gave up soda entirely a few years ago, but you don’t have to go without all your favorite brands.

Certain brands fit you better, taste better, or are of higher quality, and you don’t want to compromise. That’s OK. You can probably still find a few things you’re brand agnostic about.

For example, I don’t buy name-brand aspirin. I buy the Walgreens store brand. It works perfectly for $3-$4 less per bottle.

Try store brands or lower-priced brands. You can often find alternatives for expensive products as good or better than the familiar brand.

For the things you have to have, wait for them to go on sale if possible. When you find a good deal, consider stockpiling. Accumulating makes sense if you have the space and the product won’t spoil or expire before using it.

7. Choose Lower Cost Experiences Over Expensive Gifts

I don’t wear a lot of jewelry. I don’t need an expensive necklace for my birthday that will sit in a box inside a drawer forever. I prefer spending my birthday camping in the mountains with my family over bling.

Experiences last longer. I don’t remember everything I got for Christmas last year. I’ll never forget our surprise weekend getaway in Florida six years ago.

Experiences also strengthen relationships. Shared memories and common experiences bring people together much better than material gifts.

8. Plan Your Meals Around What’s On Sale

Groceries make up a sizeable chunk of most household budgets. The easiest way to save money on groceries without couponing or buying bulk is to buy sale items.

Plan meals around the sales flyer and what you already have in your pantry instead of cravings. If a recipe calls for something not on sale or some exotic ingredient, you’re stuck paying full price. You might also buy a jar of something you’ll only use once.

You’ll save money easily and consistently if you pick out a sale item, see what you have in the cabinets, then find a recipe that minimizes the amount of stuff you need to buy.

Is It Worth It To Be Frugal?

Being frugal is worth it. As part of a long-term financial plan, frugality will help you reach your financial goals.

Frugality is worth it when you use the money you save by being frugal to get out of debt, save for retirement, or build better money habits. Living a frugal life enables you to save for other major goals, such as a house or providing for your children’s education.

Being frugal will also help you live through tough times when they happen. A frugal lifestyle that includes living below your means, eliminating wasteful spending, and saving for the future is worth it in periods of uncertainty.

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Sara Graham is a frugal living and household budgeting expert. Her writing has appeared on MSN Money, The Good Men Project, Fairygodboss, and several other online publications. She is the co-founder of, a personal finance and frugal living blog.