Frugal versus Cheap

Frugal versus Cheap

Warren Buffett, one of the world’s richest men, and the most successful investor of the 20th century still lives in the home he purchased in 1957 for $31,000.  At the same time, he’s pledged billions, billions with an (s) to the Bill and Melinda Gates Foundation.  Warren Buffett is frugal but not cheap.  Frugal people (or Frugs) are sometimes called cheap because they wear older clothing, drive old cars, skip expensive luxuries.  I believe there are a few key differences between being frugal and being cheap. Here they are:

Frugal people are not afraid to spend on others.

Someone who’s cheap may shortchange someone on something as simple as a well-deserved tip. Sometimes the bellman, the excellent server, or the maids that cleaned your hotel room are the people who need that tip the most. Always tip generously for good service. Cheap people may skip a charitable donation or ignore others in need.  Saving, so there’s more to spend on others, is one of the most rewarding parts of being frugal.

Frugs don’t buy cheap stuff or sacrifice quality to save a buck.

Cheap people often buy cheap stuff, on SALE.  Walk into any big box store and you’ll see some of the most beautifully packaged and presented junk anywhere this side of the western hemisphere.  To be truly frugal, don’t replace anything until it’s worn out or unrepairable. When the time does come to replace that necessary appliance etc., search for quality and value. Who knows, in your search you may find you don’t need that new item at all.  At the very least, you’ll want to find something you know will last for years and avoid the hassle of having to replace it or repair it in the near future.

Frugs don’t have FOMO

This is what I call it the “think it over skill” that Frugs have. A cheap person may snatch up a sale item for FOMO. Fear of missing out on the deal without thinking about the real cost of every item you add to your pile of stuff.

If you don’t have the “think it over” skill, here’s a quick remedy that really works. When making a significant purchase, just wait 1 day. One day. You may  find the impulse to purchase it goes away or the sale will be over and you won’t want to buy it at all.  That’s it, just wait one day. If after thinking about it and looking at options (like what is already in your closet) then buy something that will last a decade.

A frugal person would not skip necessities.

Someone who is cheap may skip an important doctor’s appointment or drive around on bald and dangerous tires to save a buck.  Part of the benefit of being frugal is saving  to assure necessities for you and your family are met. A garage and basement full of stuff won’t do you any good from a hospital bed.

Speaking of hospital beds, a Frug sees the benefits of living lean, like avoiding the 99 cent value menu because there is really not much value there at all.

In many ways, making health a top priority (yes, even over work) pays great dividends.  Fitness is a great substitute for the latest styles. For years, I thought replacing perfectly good clothing going from a 32 waist to a 36 was just part of the aging process.  A frugal person will be able to replace something when it’s truly worn out versus getting rid of clothes that just don’t fit anymore.  I’ve decided to stop at 36 or maybe even go backward a bit. Everyone is different but adding, long term financial benefits to fitness helps motivate me.

Frugal people or (Frugs) look at the real cost of ownership versus buying something just because it’s a great deal.

Another benefit of living lean. Time. The more cheap stuff we bring into our lives, the more time we need to spend repairing it, storing it, cleaning it, shopping for it, and finally getting rid of it. A Frug understands the value in not owning something at all, and the freedom of living lean, freeing up time for a more experiential lifestyle.

Frugal people practice moderation and understand the virtues of delayed gratification.  

Fugal people aren’t afraid to spend on experiences they’ve saved for. They understand that experiences have far more value than stuff.   While a cheap person may skip travel or a nice meal in a restaurant altogether, a frugal person understands that by saving on life’s everyday expenses, they are pursuing a goal of adventure and experiences.

Cheat sheet for being Frugal versus Cheap.

• Frugal people are not afraid to spend on others.

• Frugal people (Frugs) look at the real cost of ownership versus buying something just because it’s a great deal.

• Don’t buy cheap stuff or sacrifice quality to save a buck.

• Frugs don’t skip necessities like healthy food, medical treatment or important repairs.

• Frugal people practice moderation and understand the virtues of delayed gratification.

The Frug