Getting it Straight: Being Cheap VS Being Frugal (aka smart)

This post was originally written for the amazing site Budgets Are Sexy – where J.Money gives amazing advice about money and how to save it all while being sexy. It’s good stuff.

I’ve always gotten offended when people use the word “cheap” to describe my spending and savings habits. When I hear cheap, I think women with blue eyeshadow in bedazzled skirts that are three sizes too small. I picture products that fall apart after one use. I always cringe, and then politely correct them – “I am not cheap! I’m frugal. There’s a big difference.” I suppose that it’s a common misunderstanding of words, but I personally feel that it’s important to straighten this whole misconception out. Why? Because since no one ever wants to feel as though they are being judged as “cheap”, they spend money they don’t have on things they don’t need all because they simply weren’t being referred to as “smart” instead.

So let me break down the difference. When it comes to describing spending habits, cheap is appropriately used in instances where people hold out on doing things for others because they don’t want to spend money. In this case, cheap can be interchangeably used with the word selfish. For example, a man can refuse to pay for his date’s meal because he claims to believe in sharing all costs, but if she can’t really afford it (and he absolutely can) – the dude is being cheap. Another example – we all have that friend who always “forgets” your birthday gift at home when they get to your party, but it never materializes. You know damn well they didn’t get you a gift – because they’re that cheap friend of yours.

cheap vs frugal

On the other hand, being smart with your money (also known as being frugal), is when you are getting yourself out of debt or creating a savings by being mindful of how you spend your money. It’s politely declining offers to go places that you can’t afford instead of pulling a “lost wallet” trick. It’s letting your friends know your situation so they understand where you’re coming from when you want to split off your portion of the bill and pay separately from everyone else who’s boozing it up. If you can’t afford to go on an expensive date – plan a thoughtful picnic in the park. This is respectable, and more importantly it’s smart behavior that will get you to the position where you no longer have to worry about saving every dollar.

I hope this clears up the confusion a little. More than worrying about what other people are thinking, it is especially important to be mindful of how you’ve defined money-saving habits in your own mind. Labeling certain behaviors as being cheap will make you less willing to do them – even though you’re fully aware that it’s in your best interest. Remember, even millionaires – especially millionaires still practice frugal behavior once they’ve reached where they want to be financially. Keeping modest homes and cars, not spending foolishly on big nights out — and trust me, they’re definitely not worried about people labeling them as cheap. When you have real money, you don’t really care what people think of you at all.




  1. Thanks for posting this article Ashley! I see nothing wrong with being cautious with your money as long you don’t cause a burden to others (or worst use others for free stuff!)

  2. Thanks for this! I am recently starting to save heavily and I have never really budgeted. Feels good to feel smart with money and like you said when I have money I wont care what others think of me. My friend and I just had this conversation yesterday. Thanks again!

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