For the longest time, I was terrified of being labeled as “frugal.” I tended to equate frugality with cheapness, and saw both of those as being akin to greed. Any mention of frugality flooded my mind with images of Scrooge McDuck, diving into his sea of golden riches and meticulously counting his innumerable stacks of bills.
Over the past several years, though, I’ve come to see that I was wrong. Adopting a frugal mindset does not mean resigning yourself to a lifetime of miserliness, nor should it come saddled with the negative connotations that characterize cheapskates. Truth is, there’s a world of difference between being cheap and being frugal.
Cheapskates care only about price, while frugal people care about value.
When making purchases, cheap people care about one thing, and one thing only: the price. They will do whatever they can to get the lowest price possible; they’ll negotiate, use coupons, comparison shop. You name it, they’ll do it – so long as it saves them some money. Paying anything more than they absolutely have to is unthinkable to many cheap people.
While frugal people often use many of these same strategies, they’re not always laser-focused on price. Instead, frugality is more concerned with value; a frugal person will often buy a more expensive product that is likely to last longer and/or provide more value through its use, while cheap people will choose the least expensive product, no matter what. Those with a frugal mindset understand that, sometimes, the cheapest option isn’t always the one that saves you the most money. It could be better, for example, to spend $200 on a pair of shoes that will last for ten years, rather than $60 on a pair that will need to be replaced every two years.
Cheapskates are selfish, while frugal people are selfless.
Google’s dictionary defines “cheapness” as “the quality of being selfish with money,” while “frugal” is defined as “sparing or economical with regard to money or food.” These definitions point to a key difference between these two traits: being cheap is often rooted in selfishness, while being frugal can be backed by much more altruistic motives.
Cheapskates are motivated to save money because it means that, at the end of the day, they’ll be able to continue living out their Scroogiest fantasies, relishing all of the bills and coins they’ve hungrily accumulated. And while saving money is an important impulse for frugal people, it’s often just one component that drives their actions; frugality can also be the result of the desire to reduce your carbon footprint, or make more of your income available for charitable giving. Generosity is much more common amongst frugal people than amongst cheap ones.
Cheapskates seek happiness through money, while frugal people find it elsewhere.
Cheap people care so deeply about minimizing their spending because they use money to measure their success. They buy into conventional wisdom that your net worth is the sole measure of your value, and anything that detracts from its total is unnecessary and invaluable.
Frugal people, on the other hand, are much less myopic. They understand that building wealth, though important, is not the only thing that makes for a worthwhile life. Their impulse to curb their spending is rooted less in the desire to accumulate wealth and more in a thorough examination of their values and priorities. A frugal mindset is one that encourages you to use your money to build a life that you find rich and fulfilling, and discourages you from squandering your money on things that you feel don’t matter.
Big City, Small Budget 
