Get my 5-day email funnel that generated $400,000 from a single launch

Want an email sales funnel that's already proven to work? Get the entire word-for-word email funnel that generated $400,000 from a single launch and apply it to your own business.

Yes! Send me the funnel now
Start Here: “The Ultimate Guide to Personal Finance”

Cheap versus frugal

73 Comments- Get free updates of new posts here

116 5

Everybody knows a cheap person, and probably hates them. But I think we often mislabel frugal people cheap. These are just my opinions, but here’s what I think differentiates the two:

Cheap people care about the cost of something.

Frugal people care about the value of something.

Cheap people try to get the lowest price on everything.

Frugal people try to get the lowest price on most things, but spend a lot on items they really care about.

Cheap people are inconsiderate. For example, when getting a meal with other people, if their food costs $7.95, they’ll put in $8.00, knowing very well that tax and tip mean it’s closer to $11.

Frugal people won’t order a Coke if they’re on a budget, so that when the bill comes, they don’t look cheap.

Yes, being cheap and/or frugal can be a cultural quality. I won’t spend much more time on this one, but it is an important topic in personal finance.

Cheap people keep a running tally with their friends, family, and co-workers. Some frugal people do this, too, but certainly not all.

Because of the fear of even one person suggesting they spent too much on something, cheap people are not always honest about what they spent on something. Neither are frugal people.

Cheap people are unreasonable and cannot understand why they can’t get something for free. Sometimes this is an act, but sometimes it’s not.

Frugal people will try as hard as cheap people to get a deal, but they understand that it’s a dance and, in the end, they don’t intrinsically deserve a special deal.

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

Both cheap and frugal people will be more assertive than most people when trying to get a deal. Over the long term, they’ll both save more money. But one has a cost, while the other pays dividends.

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


116 5

Related Articles

Best travel credit cards from a man who’s traveled to 193 countries

Are you finally ready to book your dream vacation BUT… you want to make sure you get all the rewards ...

Read More

The psychology of breakfast

I got a few emails from people who said, “Dude Ramit, I signed up to learn about business. Can you ...

Read More


116 5
  1. Webster’s defines frugal as “economy on the use of resources” and cheap as a synonym for “stingy”. Seems a bit biased to me, but I think the bigger difference is that people call themselves frugal and others cheap. I am frugal, but my employer, based on my measly paycheck, is definitely cheap.

  2. Well said, I know some people who have running tabs on their friends and it seems like too much of a bussiness-like way to live life.

  3. What a great post. I know one family whose daughter is constantly comparing what she got to what her sister got – she lives in a constant state of anxiety. Not a very fun way to live.

  4. Cheap is so tacky!

  5. Frugal is the difference in attitude about money, spending, saving, and more precisely, where saving makes the biggest difference.

    Frugal people know how to do the math, and know when to skip nickels and dimes for bigger savings (like cars, jewelry, home prices, etc.).

    Cheap people are cheap all the time with everything, because they’re in a constant worry about money and where it goes. They’re willing to forego quality and durability for price–in effect, they are prey by price alone.

    Frugal people get more for their money by being alert to scams and marketing gimmicks, astute shopping and price comparison, and negotiation for a lower price.

    Cheap people are always in fear over losing money or getting ripped off, because they don’t know basic money defense tactics. “Poor” people are poor for the same reason.

    They all need a good fishing teacher.

  6. “Cheap people’s cheapness affects those around them. Frugal people’s frugality affects themselves.”

    The above statement from your post is exactly how I’ve always destinguished between cheap and frugal.

  7. Well, I consider myself a frugal person but then again I’m cheap because of limited income I have. Sometimes I think that that your income determines whether you can be frugal or you have to just buy what you have to. I don’t regularly come to the website if you would like to email me with advice please do so. Merry Chrismas!!

  8. “I am frugal, but my employer, based on my measly paycheck, is definitely cheap.”

    No, he is frugal. Since you’re working for such low wages, he gets a good value from your employment. If he were cheap, someone else would be doing your job… in addition to their own.

  9. i know a man-83 yrs old is so damn cheap he maked you sick, he says cause he went thru the depression its instilled in you, B.S. i know a lot ofdepression people that arent like that.if something cost 20 cents more in a grocery store he wont buy it.he has sooooomuch money. he worked 2 jobs all of his life and he wont let go. it makes a person sick to be around him.

    • that’s is not a nice thing you have said. have YOU lived through a depression? NO I bet you haven’t so don’t be so judgemental – you mean person! ok so he’s cheap – maybe you can do something nice like give him a nice book that explains the difference.

  10. Cheap people are
    a) “penny wise pound foolish”.
    b) don’t value time. They will spend 5 hours to save 2$.
    c) don’t value people. Will destroy the goodwill they have developed by diplaying the cheapness brazenly.
    d) Loose sight of the big picture. Spend 5 hours every week cutting coupons when they time could have been devoted towards family, career or leisure.