5 Ways Frugal People Aren't Cheap
By John Schmoll
Many people often confuse frugality with being cheap. It's an understandable thought, as their definitions share similarities. Both traits are considered economical. Both want items at a lower price. Both want to use as few resources as possible. The end result in many of these situations is saving money.
There is, however, a key difference. We all love to save money, but it's the approach taken that makes all the difference. It's this difference that separates someone who is frugal from someone who is considered cheap. So, before you confuse a frugal person with someone who likes to be cheap, take a look at some of the following traits.
1. Frugal people take a macro-level view of finances. I've found that most frugal individuals often take a big picture view of their money. Yes, they're concerned with what they might spend on a certain item. That's a given for a frugal person. The amount spent isn't the determining factor of the spending decision, however. The determining factor is the value the item will bring into their lives.
For example, if there is a certain hobby they enjoy, they will spend the money necessary to enjoy that item. They won't cut every corner; they will get value because they'll derive value out of what the item will add to their lives. On the other hand, someone who is cheap will simply look to spend as little money as possible. While understandable, cheapness misses the bigger picture for the sake of saving a few dollars.
2. Frugal people look at quality. Similar to taking a macro level view of finances, frugal people look for quality. They also realize quality might mean spending a little more to get it. The simple reason is spending a little more, in the beginning, will mean less money spent in the long run. Not only does this desire to spend on quality mean less money spent overall, but it also means less waste -- another hallmark of frugality.
%VIRTUAL-WSSCourseInline-884%3. Frugal people don't steal. When was the last time you were at a restaurant and saw someone grab a bunch of extra napkins or sauce packets and thought the person was frugal. We've all seen it happen. Perhaps we've even been guilty of it at times.
This isn't frugality; it's theft. While it may help you save some money in the long run, it's not worth the hassle or embarrassment to a frugal person. You're betraying your values, which are worth more than money.
4. Frugal people look at time. A frugal person is keenly aware of the time spent on an item or task. A cheap person, on the other hand, forgets about the aspect of time and looks simply at the money saved. For example, when was the last time you heard someone brag about buying gas for ten cents less a gallon than you did?
That might sound great, on the surface, until they tell you it took them 20 minutes to drive across town to get the savings. A frugal person sees that 20 minutes and extra few dollars as a waste. They'd rather spend their time on something that brings greater value than chasing savings.
5. Frugal people splurge on occasion. Splurging on an item sounds like it might be contrary to a frugal mindset. It really isn't. In fact, it's a key part of frugality. Frugality is concerned with value, not being so miserly that you never have anything you want.
A frugal person is going to order their spending to get something they want, even if it's seemingly expensive. Whether that be a nice vacation, a certain brand name or more expensive and healthier food, a frugal person is going to adjust spending to allow for that splurge.
The bottom line is that frugal people are not overly worried about money. Frugal people simply want to make money work for them in the best way possible. They want their money to grow. They want to receive quality for their spending. They want more time to do the things they enjoy and they use wisdom to accomplish those things.
Frugality and cheapness are often confused. That's understandable. Before you confuse frugality with being cheap, look at the kind of life the person is living and the value they're receiving from it.
John Schmoll is the founder of Frugal Rules, a finance blog that regularly discusses investing, budgeting and frugal living. He is a father, husband and veteran of the financial services industry who's passionate about helping people find freedom through frugality.