“Cheap” and “frugal” are not synonymous, and yet we often confuse the two by attributing the same meaning to both.
For example, let’s say we go out shopping with a friend while on a lean budget. We may say to our friend, “I’m just going to be cheap and window-shop tonight because money is tight.”
This is an incorrect usage of the word. The correct word in this case is “frugal”, meaning “characterized by or reflecting thrift and efficiency in the use of resources,” as Merriam-Webster defines it, and not purchasing something of “inferior quality or worth” (a definition of cheap).
So, what’s the difference between buying cheap and a frugal mindset?
Cheap vs. Frugal
It’s important to understand the distinction between these words when managing your money.
“Cheap” has a negative connotation suggesting stinginess and frivolity while “frugal” implies careful management of money. It’s really less about how you approach money and more about how you approach value.
“For me, the difference between being frugal and being cheap is the criteria you use to make your decision,” said Zina Kumok, a licensed financial advisor at C.H. Douglas & Gray Wealth Management. “If you just use price as a barometer, you’re likely being cheap. But if you consider how long something will last or its importance — as well as its price — then you’re being frugal.”
This all matters a lot when it comes to how you shop. Being cheap can actually be more expensive in the long run than being frugal. Let’s look at some examples of when being “cheap” will financially backfire.
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Car Parts
Maintaining and replacing car parts are essential aspects of being a responsible car owner. If you take the cheap route here, you’re setting yourself (and your car) up for expensive failure.
“For example, avoiding replacing your tires because it’s expensive to do so could lead to a car accident, which will cost you a lot more,” Kumok said.
Food
Food is costlier than ever so it’s critical to be frugal when buying it, but sacrifice your health, which is what you’re potentially doing when you shop “cheap”.
“Some people buy processed and ultra-processed food because it’s less expensive,” Kumok said. “But doing so over a long period of time could cause health problems that will cost you later on.”
Shoes
Did you know that the vast majority of Americans have foot problems? Shoes can play an integral role in this problem — cheap shoes in particular. Additionally, cheap shoes are built to not last, meaning they’re built to make you spend on more shoes later.
“A $200 pair of quality shoes that lasts five years is far cheaper than replacing $60 shoes every six months,” Sexton said.
Certain Memberships
If there’s a place you shop at or pay admission for often and a membership is available, you’ll almost always save money by getting a membership
“When you use memberships in the right manner, you’ll find that you’re getting infinitely more for your dollar,” said Steve Sexton, CEO of Sexton Advisory Group.
You can also apply this logic to gym memberships — if it means you will actually use the membership.
“A higher-priced gym close to home that you attend consistently is far cheaper than a bargain gym you never go to,” Sexton said.
Time-Saving Services
If time is money, then you should angle to save time. Sometimes it’s worth it to pay a person or service for, say, help around the house, rather than spending hours and hours doing it yourself.
“Time-saving services like house cleaning, meal prep services or childcare support may seem like luxuries, but for many families, they reduce burnout, improve productivity and prevent costly last-minute decisions,” Sexton said.
Final Take To GO
So, whenever you’re buying anything with the intention of saving money and time, always be frugal and never be cheap.
“To be frugal is to seek to derive maximum value,” said Clay Cary, senior trends analyst at CouponFollow. “A frugal person may be willing to pay a bit more in order to have something of greater durability, quality, or, ultimately, cost savings. It’s not simply a question of cost; it’s a question of return on investment.”
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This article originally appeared on GOBankingRates.com: Why ‘Cheap’ Can Be More Expensive Than Frugal
