Cheap vs. Frugal

By Nancy Jackson, AFCC – Credit Counselling Services of Peterborough

Do you know someone you would call cheap? Or someone you think of as frugal? Every November marks Financial Literacy Month with a burst of activities highlighted across Canada during Credit Education Week Canada, November 9 – 13th. This year their selected theme is Cheap VS Frugal. But is there a difference?

Merriam-Webster offers several definitions of cheap including; “charging or obtainable at a low price” This is in line with my view of cheap. I have a friend who proudly identifies with cheap. She will never pay full price for anything and she is the best bargain hunter I know. She knows her prices, knows how to barter and haggle the price down, and always seems to get ‘extras’, or freebies thrown in to sweeten the deal. Price matching is a must for her and her smart phone is well stocked with coupon and flyer apps.

I have another friend I think of as frugal and who Merriam-Webster describes perfectly with; “characterized by or reflecting economy in the use of resources”. This friend won’t buy anything he doesn’t need. .He carefully weighs each and every purchase, always buying things that are made well and durable, knowing he won’t have to replace them for a very long time.  He aims for as little packaging as possible, with a mind for fresh, local, homegrown or homemade. He weighs the value of everything, throws away very little, and ‘reduce, reuse, recycle’ is his middle name.

One thing that both of my friends have in common is that they like to save money. They each go about it a different way, but they both manage to save for other things that are important to them. Money saved can be “spent” to improve our quality of life and peace of mind. Things like: vacations, future goals, education, or retirement. What you do with what you save depends on your goals, and having clear financial goals is the most important element with any style of saving.

There are varying opinions about the difference between being cheap and being frugal, but I like to consult with both of my friends when I have to make a major purchase! Do you see some of their shopping characteristics in yourself or someone you know? Would you like to learn more about saving money or discover what your saving style is?  We hope that you will drop by our office during CEWC and see our Financial Education Display, and take home some great saving tips, consumer information, and learn more about the wise use of credit. If a savings plan is something you’ve been thinking about, why not register for our free lunch n’ learn on Nov 12th, and take away some great saving strategies that you can get started on right away!