Cheap vs Frugal: What’s the Difference?
Have you ever heard the quote:
‘Beauty is in the eyes of the beholder.’
I have a remix to that quote:
‘Who is cheap & who is frugal is in the eyes of the beholder.’
Frugal does not have a negative connotation to it.
It has a practical connotation.
You are wise with your money.
While cheap has a negative connotation to it.
It implies that you can pay more, but due to a scarce mindset, you choose not to.
What one person considers frugal; another person considers cheap.
Let me tell you a quick story.
The Best Buy Trip to Hell
A few weeks ago, my laptop stopped working.
This was a problem because I needed to get some work done that day.
I quickly went to Best Buy to buy a new laptop.
I knew exactly what I wanted & I was a hot lead.
By the time I got to Best Buy, I was greeted by an old man who said he would be helping me.
I told him exactly what I wanted.
A basic laptop that handles Microsoft Word, allows me to seamlessly surf the web, big screen and has a numbers keypad on the right.
Budget of ~$800.
He processed what I said, then said:
‘Follow me.’
He took me to this area where they sold video game laptops.
These laptops were priced at $3,000-$5,000.
He began giving me his sales pitch for the video game laptops.
I let him know that I don’t play video games and that these laptops were out of my budget.
Then I reiterated what I wanted.
Once again, he processed what I said.
Then he said:
‘I know you don’t play video games, yet. But one day, you may.’
He began selling me on these laptops again & tried convincing me that $3,000-$5,000 was a “steal.”
At this point, I was getting annoyed.
I told him I only had $800 to work with.
He looked back at me in disgust.
He viewed me as cheap.
While I viewed myself as frugal.
Was I Cheap or Frugal?
From my perspective, I was frugal.
I have clear tasks that I use the computer for.
There is no need for me to add a bunch of clutter for no reason.
From my perspective, I was not trying to spend more money without a reason to.
This was frugal.
But from the salesman’s viewpoint, he saw me as a cheap guy who was not willing to invest in himself.
His perception of me being cheap may have been strengthened if he sold a few video game laptops earlier that day.
He thought:
‘Other people can afford it, why not this guy?’
Lesson?
One person’s perception of cheap is another person’s perception of frugal.
Try this Exercise
- Find something that you are super laid back about.
- Find someone who is very picky about the thing that you are laid back about.
Imagine you 2 are interacting.
Who will get their way?
I’ll give you an example.
With food, I am very laid back.
I can easily eat at Taco Bell, Mcdonald’s, Chipotle, etc.
I don’t need to go to fancy places where they give you little food but a big check.
On the other hand, I know this one guy named Arnie who is a food snob.
It’s very hard to impress him!
Me and Arnie used to be good friends.
But nowadays, trying to chill with him is a hassle.
He always wants to go to these fancy places that barely give any food.
If I agreed to his suggestions, then I’d end up spending 50 bucks while leaving hungry.
No thanks!
A Chipotle bowl will do.
I view Arnie as lavish with food, while I view myself as frugal with food.
Arnie views me as cheap with food, while he views himself as reasonable with food.
What’s something you are very laid back on?
Is it your living situation during vacation?
Maybe you don’t care whether you stay at a motel or a friend’s extra room.
You think:
‘I’m just going to sleep there. Other than that, I’m traveling on vacation.’
But your spouse has an alternate viewpoint.
Your spouse says:
‘Motel? Heck no! We are staying at a 4-star hotel for sure.’
Recap:
- Find something you are laid back on.
- Find someone who is very picky about the thing that you are laid back on.
Imagine you 2 are interacting.
Who will get their way?
This exercise will open up your mind to why it’s difficult to label people cheap or frugal.
Final Thoughts on Cheap vs Frugal
Sometimes, the cheap vs frugal debate is not that serious.
It can be taken lightheartedly.
When I win on where to eat, Arnie will rib me for being cheap with food for a few.
Then we go back to our lives.
Other times, the cheap vs frugal debate is to be taken seriously.
Especially if you are someone who offers some type of service.
Let’s say you are a consultant who offers a book-writing service.
And the potential client is haggling with you left and right.
He says his dream was to always write a book growing up.
But he doesn’t want to pay $1,500 for the service.
Instead, he believes $500 is more than enough.
Sure, this person may be viewing himself as frugal from his end.
But from your end, he’s being cheap.
Due to that intense disconnect, working with someone like that is not smart.
They will only be a headache.
Even if they agree to your $1,500 price, they will set unrealistic expectations.
They believe the money they are shelling out on your services will give you superpowers to fix every problem in their life.
Not worth it!
Take a pause before deciding to work with someone.
What are they prioritizing?
Are they really being frugal & your prices are too high?
Or are they cheap & your prices are reasonable?
Ultimately, when determining who is cheap & who is frugal, it becomes subjective.
Just like every hero is a villain in someone’s story.
Every frugal person is cheap in someone’s transaction.
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