4 Signs That Indicate You’re Not Being Frugal — You’re Being Cheap
Written by
Cody Bay
Edited by
Chris Cluff
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Nobody can fault you for being careful with your money, but what’s the difference between frugal people and cheap people? Though the profit margin is thin when penny-pinching, the gap between the two financial concepts might be bigger than you think.
Whether it’s rebalancing your budget, developing better spending habits or paying off credit card debt, how can you tell where the cut off is? Simply put, living frugally doesn’t mean you’re cheap — it means you know how to extract the most value out of what you spend. That’s a good thing.
Out of the other pocket, being cheap can result in sacrificing too much of your happiness and the happiness of those around you for your strict bottom line. To find out where frugality ends and cheapness begins, GOBankingrates consulted several financial experts to identify the telltale signs of being cheap.
You Make Extreme Sacrifices
“Being frugal is a great practice no matter your income or net worth, because frugality means you’re smart and strategic about how you spend money and manage your resources,” said Lynnette Khalfani-Cox, author of “Bounce Back: The Ultimate Guide to Financial Resilience.”
She continued, “By contrast, being cheap is more like being penny-wise and pound-foolish. Cheap individuals take shortcuts to save money in ways that wind up costing them more in the long run — financially or in terms of overall quality of life. Anytime you’re making extreme sacrifices, scrimping excessively to save money, or making choices that seem to help you financially but hurt you in other ways, then you’re ventured into the cheap category.”
Case in point: Khalfani-Cox recalls offering this advice to one self-described “ultimate cheapskate” — There is no discount code for a higher quality of life.
“He wouldn’t even flush the toilet in his house except once a week — all to supposedly save money on his water bill,” she recalled. “That practice was driving other family members crazy, and it also impacted his ability to have dating relationships because he said the women he dated were turned off by this so-called money-saving move.”
Consider This:
You’re a Burden on Others
According to Todd Stearn, founder and CEO of The Money Manual, being frugal simply means finding ways to save instead of spending a lot of money. “This could mean shopping sales, thrift or garage sale shopping, using coupons, repairing or repurposing items you already own, or simply avoiding the urge to buy things you don’t need,” Stearn said.
However, he warned of a key sign that you are bein cheap. “If no one would describe you as generous, and you’ve become a financial burden on friends and family, you’ve crossed the line from frugal to cheap. Letting loved ones treat you to a meal out for a birthday, a promotion, or even just because sometimes is fine, but you should try to return the favor at appropriate times. The same goes for letting others pay your way for movies, trips, and other outings.”
Your Stuff Is Falling Apart
Wearing items out past their point of usability or safety is another red flag, Stearn warned. “If you’re wearing clothes, shoes, and accessories that are falling apart rather than buying affordable thrift or clearance items to replace them, you’re probably cheap,” he said.
He added, “It can have a negative impact on how others see you and on how you see yourself. It can even become dangerous and cost you opportunities, like if you keep driving an unreliable vehicle because you’d rather save that money than spend it on a more reliable used vehicle.”
Your Main Concern Is Price
“The biggest difference between being frugal and cheap is how you determine the value of a purchase,” said consumer savings and budgeting expert Andrea Woroch. “Frugality focuses on value, quality and relevancy rather than just price. If you’re being cheap, that may mean you’re worried about spending money, while a frugal person is not as much concerned about spending money but rather what they are spending on and if it’s worth the cost.”
If you’re so concerned about spending that you’re not willing to pay a reasonable tip, or won’t spend on “things or services that would improve your quality of life,” Woroch warned that you’ve probably become cheap. Being in a constant state of panic with your personal finances is not a lot of fun, but neither is operating from a place of deprivation rather than abundance with every interaction you have.
Final Take To GO: How To Shift From Cheap Back to Frugal
The real bottom line is that even the most miserly of characters can see the light and change their ways. Getting back into the frugal zone just means a bit of reprioritizing and healthy budgeting, our experts said.
“Shifting back to a frugal mindset is about recognizing that while there are trade-offs in life, you don’t have to engage in ‘cheap’ behaviors that are completely unnecessary or unsustainable,” Khalfani-Cox said. “Ask yourself: ‘What am I willing to let go of or cut back on without overhauling my entire lifestyle or putting my mental peace, relationships, happiness, and health at risk?'”
Woroch recommended reassessing your priorities to focus on what makes you happy. “What is it that makes you happy, or what is it that you need to create the life that would make you happy? Spend on the things that can help you achieve this and rid yourself of any wasteful spending that doesn’t support these goals.”
So fear not, careful spender. Budget for the things that matter, pick up the bill now and then, leave nice tips for good service, and no one will be giving you that cheapskate side-eye. And for everyone’s sake, flush the toilet.
Caitlyn Moorhead contributed to the reporting for this article.
More From GOBankingRates
