Frugal Living - Frugal vs Cheap – A definition to go by

Frugal and cheap are two words considered by many as synonyms while they differ greatly in the meaning they render. Cheap is when one values the money saved more than an associated loss while frugal points to the contrary. Here are everyday encounters of cheap and frugal actions to nail the definition:

1. Paring down a bill among friends at a restaurant to justify the difference in spending. The loss associated with this action can range from a decline in goodwill among one’s own friends to even losing a friend. This loss is not worth the few dollars saved. Volunteering to split-up the bill in this situation would be a corresponding frugal action and would be considered a no-brainer at best.
2. Bargaining on an item listed at a throwaway price at a garage sale. Here again, at the expense of goodwill, you could fail to purchase the item because the seller would rather not deal with you. Happily purchasing the item and/or adding a small tip would be a related frugal action in this situation.
3. Spending 2 hours to save $2 (coupon clipping, driving long distance, etc.). Failing to recognize the time value of money. Science has a long way to go before we can turn back time. A matching frugal action would be to plan shopping around bargains.

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Last Updated: 06/2011.