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October 15, 2016

Don't Call me Cheap!

People have used a lot of colorful adjectives to describe me over the years, but the most common one is probably cheap, or cheapskate. I usually wear that title like a badge of pride, but it’s starting to wear on me. In my opinion, there is a big difference between being cheap and being frugal. I want to believe I fall into the latter camp, and in this post I will explore the difference between the two.

Cheapskates Hurt Those around Them
The biggest difference between a cheap person and a frugal person is that a cheapskate lets his cheapness negatively impact those around them. A fugal fellow may endure hardship due to his reluctance to part with money, but he doesn’t let that harm those around him.

For example, if a group of friends go out to a meal, a cheapskate in the group will demand that each person pay their exact share, down to the cent. A frugal person will let the check be split evenly, although they might have a little internal conflict about it.

Another bad habit of the cheapskate at group meals is to throw in only the exact amount of money their meal cost, without adding anything for the tax and tip that must be paid. This is actually a bad habit of a lot of people, cheapskate or not. I think most people do this unconsciously, but the cheapskate does it intentionally.

Basically, cheapskates make everyone else miserable with their miserly habits, while frugal folks will generally go with the flow, but they may occasionally offer money saving suggestions.

The ultimate cheapskate purchase--single ply.
Cheapskates Place Price above Quality
When making any purchase, a cheapskate will choose the option that has the lowest immediate cost. A frugal person will consider all of the available products and select the option that represents the best overall value.

If a cheapskate needed a new window for his house, he would buy the lowest cost, single-pane window he could find. A frugal person would look at all available windows and evaluate what made the most sense. They would recognize a single-pane window would cost the least up-front, but it would result in higher heating and cooling costs for as long as the window is installed. A triple-pane window would be most efficient, but is probably overkill, with the increase in performance not justifying the higher cost. The frugal fellow would probably buy a double-pane window, which has the best balance between upfront cost and long-term performance.

I should also point out cheapskates are driven almost exclusively by cost. Frugal people are more nuanced and strongly consider cost, but they also think about the quality-of-life impact of their decisions. In the window example, the frugal person wouldn’t just consider the upfront and long-term costs associated with the window, but also how much more comfortable it would be inside the home with the better temperature control offered by the nicer window. He would also think about the increased sound isolation the double-pane window would provide. It’s hard to put a monetary value on these types of benefits, but they should be considered.

Cheapskates are Lazy
The final difference I’m going to address between cheapskates and frugal folks is work ethic. Cheapskates will almost always take the easiest/cheapest path, while frugal people are willing to work to save money.

A good example of this is landscape maintenance. A cheapskate will either do nothing, letting the weeds get waist high in his yard, or he will hire the cheapest gardener possible. The one who’s jalopy drips oil throughout the neighborhood and just blows his grass clippings into the neighbor’s yard (with the world’s loudest and worst polluting leaf blower). A frugal person will mow their own lawn, or plant a drought-tolerant garden so little water and no mowing is necessary.

Hopefully this post gives you an idea why the term cheap or cheapskate is a little insulting to me and all the frugal folks out there. We work hard for our money, and we really consider how we want to use it, but that sure doesn’t make us cheap.

What is the most egregious money saving tactic you’ve seen a cheapskate use? Let us know in the comments.

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  1. The cheapskate tactic I most loathe happens during group restaurant meals. Once it's established the bill will be evenly divided among the group, the cheapskate orders expensive food & drink he/she would never order if they had to pay for it. The cheapskate expects friends to subsidize their indulgences!

    1. I'm guilty of this to a certain extent, except I usually just up my order to the level of everyone else so I'm not subsidizing their meals.

  2. Personally I think there's nothing more unattractive than a cheapskate guy, and nothing more attractive than a frugal guy. Make sense? :p

  3. I don't think it's being cheap to only want to pay for your portion when going out.

    If someone wants to be generous and cover someone else, that's great, but I've always just paid for my portion. I usually am the first to request a separate check....and usually everyone else follows suit. I don't have anything to prove by subsidizing someone else's meal. If someone suggested evenly splitting it, I wouldn't necessarily fight it, but that almost never happens. It's easy enough for the server to split the bill. I might also leave an extra tip in that scenario because it does take some extra time to do the splitting, but with modern technology, they usually enter stuff into the computer by person anyway. When I went to Europe, if there was a group of us and it was all put one check we all just contributed what we owed and it worked fine.

    1. I agree with you, but sometimes it's just easier to split things evenly, especially at mom and pop joints that don't have fancy computer systems and who really sweat the credit card transaction fees.