Frugal or Cheap?

When striving to reach financial independence, some of us (myself included) tend to take saving every penny a bit too far. The How To Money podcast, with Joel Larsgaard and Matt Altmix, will often ask listeners the question “Is it frugal or cheap?” It usually turns into a game and a fun conversation. Side note, How To Money is yet another high reco podcast for Savvy Solos everywhere.

For example, if I decide to ride a bike to work instead of driving my car to limit the gas bill, is that frugal or cheap? If you decide to buy a loaf of store brand white bread instead of that fancy name brand 21 seed bread to save a few bucks on the grocery bill (but obviously not as healthy), is that frugal or cheap?

What’s funny about the “frugal or cheap” question is that we all have different answers. The main reason behind this is most likely that we all have different definitions of “Frugal” and “Cheap.” Let’s take a closer look at what should be a reasonably simple question.

I jumped around to all the major platforms you may think of for this one: Merriam-Webster, Oxford, Cambridge, etc. Let’s hit on the exact definitions the big boys described:

Frugal:

• Careful or sparing in the use of food, goods, etc.
• Using only as much resources as is necessary
• Small, plain, and/or not costing very much
• Sparing or economical with regard to money or food
• Characterized by or reflecting economy in the use of resources

Cheap:

• Having a low price, costing little money
• Of inferior quality or worth
• Costing little or less money than is usual or expected
• Gained or accomplished with little effort
• Stingy or miserly

Just by the basic definitions, the term frugal tends to regard one’s engagement with resources while the term cheap tends to describe the action or object itself.

According to Etymonline.com, the word “frugal” comes from the Latin word frugalis, which means “useful,” “proper,” and “economical.” Frugalis is derived from frux, which means “fruit” and figuratively means “value,” “virtuous,” or “success.” Hmm, there’s that word value again, where did I hear that one before? 🤔

From the same source, the word “cheap” originates in Old English. The noun ceap meant “traffic, a purchase,” the verb ceapian meant “to trade, buy and sell.” The word ceap is thought to have been borrowed from the early Germanic borrowings of the Latin word caupo, which means “petty tradesman, huckster, peddler.”

I guess the terminology for snake oil salesman wasn’t around back then… 👀 So, frugal is good, cheap is bad, right?

On the How To Money podcast, a listener once wrote in explaining that he always kept his windshield wipers in the backseat of his car and only put them on when he was about to drive in poor weather. 😯 On nice weather days, and/or when the vehicle is not being used, the sun/weather will break down the composition of the wipers even when they aren’t being used. By utilizing this method, the listener is estimating that he’ll get 2-3 more years out of the wipers before they have to be replaced!

Now, I ask you Savvy Solo… is this considered frugal? Cheap? Or just plain stupid?

Let’s completely dismiss the fact that this method means you are going to get soaked every time you try to put on windshield wipers on in the rain. Let’s also make the assumption you never forget to put them on and only remember once hitting the major road (this would be me every single time 😂). This is very clearly beyond frugal or cheap, this is dumb and dangerous!

What if a swarm of bugs hits your windshield on the highway? What are you going to do about naturally occurring fog/condensation on the windshield? What if a freak storm hits where you don’t have an exit? I hope this guy doesn’t live in Florida! 😬

Let’s say a new set of windshield wipers costs (on the expensive side) $30, and this method indeed does save you a full 3 years of having to replace them. The average life of windshield wipers is approximately 1 year, so that means $90 in savings over the course of these 3 years. That literally breaks down to an incredible $2.50 (yes… two dollars and fifty cents) per month! Per day, we are looking around eight pennies… Couldn’t fit that one on the MFC! eh?

The same could be said for people who categorize themselves as “cheap” when not tipping, mooching off friends/family, or getting that five-finger discount at the grocery store. This isn’t being cheap, this is being immoral, and in some cases illegal. Don’t be that guy!

All of us are at different points in our journey to financial independence, we all have different values, and different time horizons in front of us (and behind us!). Thus, all of us are going to have different takes on what is actually considered frugal, cheap, or just plain stupid.

Here’s how I define these terms:

Frugal:

• Getting the best overall bang for your buck
• Makes purchases that best align with core values
• Prioritizes spending on 5POH over other immediate wants
• Assesses the long-term value of a purchase
• Focus on value over upfront cost of product or service

Cheap:

• Consciously spends less to receive less
• Searches for the cheapest solution to meet a need
• Focus on immediate price over quality of product or service
• Does not factor in long term cost of a quick fix
• Skimps on some of the basics temporarily

Supid/Immoral:

• Has no problem with that 5-finger discount (especially on small things)
• Makes decisions that put themselves or others in physical danger
• Doesn’t tip without explanation
• Regularly mooches off friends/family
• Never offers to pay

I feel it’s important to add the third column when discussing this topic. Some people consider “not tipping” as being cheap. In my personal opinion, that’s not being cheap, that’s immoral! If the service was so obscenely poor that you feel the waiter doesn’t deserve a tip, then a conversation with the manager must take place. These people are getting paid less than minimum wage, there is no cultural norm that makes this acceptable in America. Can you tell I waited tables a few decades ago? 😂

Getting take-out food.

Frugal: Uses the promo code they got in an email to get free delivery. Tips the delivery guy a few bucks in cash at the door.

Cheap: Cut out coupon from local free newspaper. Drives to pick up the food to avoid dealing with delivery fees/tipping the delivery guy.

Stupid/Immoral: Drives to pick up the food and demands discount despite not having the coupon, then proceeds to snag a can of soda on the way out.

Side View Mirror gets knocked off in car accident.

Frugal: Diligently does local research on local body shops that can replace the mirror at lowest cost but will still pass next inspection.

Cheap: Duct tape that bad boy back on there for now. We’ll take care of this next month; there’s time before the next inspection.

Stupid/Immoral: Does absolutely nothing about it. It wasn’t our fault anyway, right? If we get a ticket, we’ll go fight it in court!

Going to an event.

Frugal: Finds a Groupon to purchase 6 tickets at a discounted rate. Pays with credit card to get rewards (and protections), then asks 5 friends to Venmo for the price of the ticket. Gets a reservation at a fair priced restaurant nearby for the group.

Cheap: Double checks with the frugal friend the exact dollar amount of the ticket price before sending the Venmo. Proceeds to eat before the event so they don’t have to pay that night to eat out.

Stupid/Immoral: Hitches a ride with the frugal friend to the event so they don’t have to drive home after drinking. Never sends the Venmo and when confronted says they will send the money next week (never actually does). What’s a few bucks between friends am I right? 👀

I really don’t like this current idea that being “cheap” is always a bad thing. I especially don’t like when people lump together being “cheap” and being stupid or immoral. There’s a big difference between going against society norms, and flat out being a miser for no reason.

Don’t get me wrong, all of us penny pinchers want to eventually align ourselves in the frugal category, but sometimes you gotta do what you gotta do. When I dug myself out of almost $80k in debt in 18 months, I’ll happily admit there were many times I chose to be cheap. I slept on couches when traveling, spent far too much time trying to save $15 on a flight, I almost never went out to eat, and overall put very little value on my free time.

That said, I never did anything really detrimental to my future in the name of saving a few bucks. Sure, I wasn’t always eating that healthy or really looking at the big picture; but I would never make a financial decision that might put myself or others around me in real risk. That would be… well… STUPID!

It’s worth it for all of us to ask ourselves from time to time: Am I being frugal? Cheap? Or just plain stupid? Depending on your current situation, it might make more sense to value time saved over dollars saved. Hit me up or leave a comment with any frugal wins, hilarious stories of being cheap, or even times you were accidentally in that last category. I always love to hear from readers!

Stay classy Solos! ✌️