“Some people are so tight with their money that by the time you wrestle a penny
out of their hands, Lincoln has a bloody nose.”
Anonymous

Being frugal is about smart spending and getting the most for your money, while cheap is looked upon as being selfish and stingy.

To be frugal means making wise, thoughtful decisions with what you have, so that you can give more generously of both time and resources. Frugality isn’t about pinching pennies, it means understanding the value of the dollar and thinking long term about that value.

Someone who is “cheap,” on the other hand, doesn’t think intentionally about the wise use of their savings, but rather “cheap” people are generally unreasonable and cannot understand why they can’t get something for free. Value is not part of the equation, so a “cheap” persons monetary demands are made simply so they can say that they saved a buck.

Living well for less money is frugality. Leeching off of people to get by is cheap.

fru•gal – economical in use or expenditure; prudently saving or sparing; not wasteful: a frugal manager. thrifty, chary, provident and careful.

cheap – stingy; miserly, shoddiness, inferiority, showy imitation, complete unworthiness.

Cheap people think short term. – Frugal people think long term.

Cheap people only seem to care about the cost of something. – Frugal people care about the value.

Cheap people try to get the lowest price on everything. – Frugal people try to get the value on things, but will spend a lot on things they really care about.

Cheap people’s cheapness affects those around them. – Frugal people’s frugality affects themselves.

Important Note: Frugality is not just for those who are on low income. Warren Buffet who has a net worth of more than 42 billion dollars still lives in the house he bought more than 40 years ago at $31,500. He also prefers a burger and a coke over an expensive lunch.

Another Life Lesson From The School of Hard Knocks