The difference between cheap and frugal, revisited

Posted by Maneesh Sethi :: November 28, 2007 @ 10:13 am

In a very recent article, I talked about the difference between being cheap vs. being frugal. I defined the difference between the two as follows.

• Being cheap - You are unwilling to spend money on anything. Even stuff you need. You go out of your way to save money, even when it might not be a great idea.

• Being frugal - You don't waste money. You spend it on things you need, and save it on things you don't.

Well, Trent over at The Simple Dollar wrote a great article about the major differences. He takes the same standpoint that I did--being cheap is inherently bad, while being frugal is not. He writes:

"In a nutshell, a frugal person seeks to find the best deal on an item that meets the desired level of quality... On the other hand, a cheap person will always take the route of least financial cost in the here and now."

But, as I said before, being cheap is often more expensive that being frugal. Trent agrees. If you are cheap, you buy lower quality items much of the time. When they break, the cheapskate has to spend extra money fixing or replacing them. Fortunately if this happens to you, you can get a good P2P loan on Lending Club for all of your household needs.

Are you cheap or frugal? At Lending Club, we want to make sure you aren't wasting the money you worked hard to earn.