Personal finance writers often make a distinction between frugal and cheap. I’ve read two great definitions of each:
I Will Teach You To Be Rich: Cheap people care about the cost of something. Frugal people care about the value of something.
The Simple Dollar: a cheap person will always take the route of least financial cost in the here and now”, while “a frugal person seeks to find the best deal on an item that meets the desired level of quality.
I’m often looking for ways to be more frugal – it’s a by-product of having a reduced income significantly over the last 6 months. As such, when there’s an option to save some money, I generally look to do it. This often means avoiding Whole Foods and going with store brands from Safeway. Or it may mean wearing out some of the clothes that I have before I look to buy new ones.
Somewhere along the way, I think I crossed the line from frugal to cheap. You see my wife came home yesterday with a new purchase. It looked to be about $5 worth of hair clips. She showed all of three of them to me. I imagine my reaction mirrored most husbands reactions to their wife’s fashion (“That’s nice dear…”). Later that night, my wife confessed that she thought I’d say something about the cost of the hair clips. I’m still a little surprised. If my wife thinks I might react in a manner that I would consider cheap, does that mean I might have reacted that way in the past?
Without having the above definitions of frugal and cheap available to me, I tried to explain the difference. I said that when you have long hair, hair clips can be a necessity (and in fact, they were since her other ones broke). That doesn’t mean you go to Tiffany’s and get a diamond encrusted hair clip – I would have been upset by that. I believe in purchasing things that perform a necessary function. Of course, now that I say that she’ll probably pipe up in the comments where I was indeed much cheaper than I should have been.
And if I am cheap, perhaps I’m not the only one straddling that line.
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