Are You Frugal or Cheap?

Yes, there is a difference!

This post is 591 words, a 3-minute read. Enjoy!

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Being Frugal or Being Cheap can appear to be the same thing on the surface. Two people can make the same decision, but one would have acted out of frugality and the other being cheap. So, what makes them different?

Oxford dictionary defines Frugal as "sparing or economical with regard to money or food."

Oxford dictionary defines Cheap as "miserly or stingy".

The key difference between the two is the thought or lack of thought behind the action. Here is a good example of a situation that comes up quite regularly.

If you go out to dinner with friends, everyone orders different things at different prices. The bill comes at the end of the night, what do you do?

• Pay for your friends

• Split the bill without a thought of who ordered what

• Pay for only your meal

• Run to the bathroom

My answer is it depends.

• Most of the time, I only pay for my wife's and I's meals.

• If the restaurant is one of those useless places that requires everyone on one ticket, I will split it evenly and not stress too much. Although, I will be ticked off.

• If I invite someone specific to hang out, sometimes I will cover the meal. But I tend to plan ahead if it is a place I can afford to do this or not.

The key thing here is a part of my life vision is being generous. However, I am not Dangote or Bezos. Which means I can afford what I can afford. I do not try to overextend myself and end up in a bad place financially. This would no longer be me living a generous life but prideful stupidity.

This is the core difference between being cheap and being frugal. It is asking a simple question:

Is this in line with the person I want to be and the life vision I want to live?

This is why some decisions I make can be very cheap but in my head it is economical. For example, I could care little to nothing about clothes. I only buy clothes if I have to, and I tend to be very price-hawkish about it. Whenever someone is like, "You are so cheap, you never buy new clothes. You've had those things forever." In my head, I say to myself, "No I am economical, I would rather use the money for the wedding I have coming up or have the ability to be generous to random things that catch me."

Life Tip: Most people do not remember what you wear, they are too focused on what they are wearing.

Now this is not to say that I am not cheap. But for the most part, my spending is driven by the vision that I have for my life.

With that being said, "ARE YOU FRUGAL OR CHEAP?"

If you are not sure, here is a quiz created by Brett from BackofNapkin.co. It is based on the things we talk about every week on this Substack. I found the quiz eye-opening. It caused me to reflect on if I am living by design or by default.

The quiz will take you no more than 5 minutes to complete.

GO DO IT

Shout-out to Brett for reaching out and putting this together out of the blue. He has other types of calculators on his website that could be helpful to everyone.

Next week, I return with Everything to Know About Your Money (Improved): Part 3 - Protect The Downside.

Generosity>greed

✌🏾