Frugal vs Cheap

We have all heard it before – “oh your such a tight-arse” or some other put down when someones values don’t align to yours. It is remarkable just how negative some people can get when they realise your getting ahead by not wasting your money.

I want to start by saying I think there is an incredible difference between being Frugal, and being cheap.

Frugal is good

Cheap is not

The three tenets of Financial Independence

Being Frugal is one of the three key tenets of reaching Financial Independence. These are;

  1. Frugality
  2. Simplicity
  3. Self-sufficiency

These tenets are centered around the complimentary and overlapping philosophies of

  • Efficiency
  • Minimalism
  • Stoicism


To me, being frugal is about making a conscious decision every day to align the spending of my life energy with my values and goals. I aim to be as ruthlessly efficient with this as possible, and so flat out refuse to waste my time or money on excessive wastefulness or convinience

I think being frugal is a very desirable characteristic, and I was raised to be frugal simply because there was no other option. These days, I deliberately choose to be frugal as I know this will help me reach Financial Independence, and it just seems ridiculous to otherwise waste the precious resources that I have.

However, I will not resort to being Cheap whilst on my path to financial Independence. There is a BIG difference between being Frugal (good) and being Cheap (bad).

Quality vs Price

For example: Someone who is frugal understands the value in investing in quality products. They buy a pair of $600 RM Williams leather craftsman boots, because they know they with good care, that they can last a lifetime. My pair have lasted me over a decade already, and I have just had them re-soled.

I should get another ten years before this heel wears out. My frugality satisfaction drive goes into overdrive when I calculate my projected annual cost $800/20 = $40, or my cost-per-wear = $40/230 = 17 cents per day!

Someone who is cheap however, usually goes for the cheapest product price. They might opt for some crappy synthetic boots for $60 which fall apart every six months. Just this alone would cost you three times as much as the more expensive investment in the RMs!

Similar arguments can be made for other clothes, and even vehicles, tools, and kitchen knives. My Mum was a very smart and very frugal lady, who despite raising us as a single parent on a low income below the poverty line, always taught us to value quality over price. “Buy quality, buy once” she would say, harking back to a saying my grandparents had of “The quality is remembered long after the price is forgotten”.

Fair is Fair, Cob

In the DFC, FI and finance community in general, we always hear about ways you can dodge tax and minimize your tax bill, tax deduct your negatively geared investments and get a tax refund. Well fair is fair cob, we pay a lot of Tax in Australia and that’s for the privilege of living in the worlds best and safest country.

Being Frugal means filing your tax return, making appropriate deductions that have legal precedence for your employment, and following the tax law. You shouldn’t be paying any more tax than is your fair share, so you should claim deductions as appropriate to your working conditions.

Being Cheap means making up bullshit tax claims to try and scam the highest return possible. Being cheap means avoiding payslips and working under the table and not declaring your income. Being cheap is sherking your social responsibility, and probably being investigated and charged for tax fraud as a result.

Its your round

Its no secret that socialising and going out can be expensive, especially when your doing rounds in a big group. Someone who is Frugal might opt not to participate in rounds and just nurse their drink with a soft-drink or water in between. Someone who is cheap will drink their fill and then mysteriously disappear when it is turn for their round!

Then again, the cost of a few rounds is usually a small price to pay to enjoy socialising with a few group of close friends. In the grand scheme of things, its not worth worrying about this small cost or jeopardizing your friendships and relationships by completely abstaining all the time. Enjoy the night and make a commitment to cut down some bills elsewhere or do a bit of side-hustling to make it back!

The price of fuel

There a bunch of funny little false economies out there, and the price of fuel is a good one. I’ve heard of people driving right across town to save a few cents per litre on their fuel. I would describe these people as cheap – don’t they realise just how much of their own time they are wasting, let alone the fuel they spend driving to get this ‘cheap’ fuel and the wear and tear on their car?

Someone who is frugal however would probably just choose to reduce their fuel use, and fill up the car whenever they go past a pump at a good price.


At the end of the day, this is just a short rant where I really wanted to express my opinion on the difference of being Frugal vs being cheap.

I think being cheap is a false economy, and causes you more harm in the long term – whether that is crappy products that fall apart, doing things that waste your own time, or undermining and destroying your relationships, being cheap actually costs you more in the long run. Much better to think carefully about how you spend your life energy, and embrace Frugality.

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2 thoughts on “Frugal vs Cheap

  1. A random thought assaulted me as I was reading from your experiences and thoughts Captain. It occurred to me as odd that, being older than yourself, I found myself gaining insight into more than just the simple mathematics of dividend percentages and capital gains.

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