There's a difference between being miser and being frugal. A frugal person cuts down frivolous expenses, sticks to budget and save money. On the other hand, a person labeled as miser wouldn't pay a premium price irrespective of the quality of service.
Warren Buffet is considered as a frugal person whereas your neighbor, who doesn't pay a tip to the waiter even after having a sumptuous meal at a restaurant is a cheapskate.
. There's a subtle difference between the two and you can know about it from the following example.
A frugal person would skip the drink order and opt for appetizer to save money. But, he would calculate tax properly and pay a good tip to the waiter unless the service is really very bad. On the other hand, a person labeled as cheap would deliberately forget to pay a tip. He would eat very less on his own money and but would have a ravishing meal at others expense.
A frugal person would try to live on his household budget make a positive change to his finances. He wouldn't deprive himself of all the comforts of life. An individual labeled as cheap would try to pinch penny at every occasion and stop enjoying life altogether.
For instance, a frugal person would stop having a cup of latte from his favorite coffee shop everyday. He would perhaps have coffee at home and save money throughout the year. On the contrary, a miser would stop having yummy coffee completely.
Here are some other differences between frugal and cheap.
1. A frugal person wouldn't mind paying for the necessities. A penny-pincher may not pay a penny.
Do you know anyone who would not visit a doctor to save fees? Have you met anyone who has no plan to pay for his teen's college tuition fees? Well, these are some extreme cases but cheap people may be determined to not spend a penny for the life's necessities. . They would try to have them at an affordable price.
2. Frugal people would give more value to people rather than savings.
A frugal person gives more value to people than savings. For example, a frugal person would use coupons to have pizza from McDonalds. However, a scrooge would give tip on the basis of the amount left after using coupon and not on the original price.
3. Cheap people feel that every item costs too much.
You've seen this person. He is the one who always complains about the price of everything. He feels that the restaurant is charging more for the burger. He argues with the waiter and asks why the restaurant is charging $10 for a burger. He finds a candy sold at a gas station too costly. Now what do you call this person? Of course cheap!
A frugal person may also find the candy very costly, but he won't voice his opinion publicly. He will keep quite and not buy the candy.
4. Cheap people would spend less whereas frugal people would prioritize their spending.
Cheapskates are determined to save money at any cost. They are more than ready to save money and sacrifice time, value and quality. All they're bothered about is savings. Frugal people on the other hand, are resourceful with their expenditures. They believe in the concept of value for money. So, they're ready to spend to have a bright and prosperous future.
The basic difference between spendthrifts, frugal people and cheapskates is given below.
Spendthrifts – They live beyond their means and break budget.
Frugal people – They live within their means and stick to budget.
Cheapskates – They have only one philosophy in life. Save money at any cost.
Here's a brief comparative analysis between the 3 types of people.
Spendthrifts: They would buy a brand new vehicle every 2 years.
Frugal people: Purchase second-hand vehicles every 8 years.
Cheapskates: Ask parents to gift a car to them. Ask friends for a free ride to save gas.
Spendthrifts: Dine out at expensive restaurants. Have costly drinks, appetizers, main course and desserts.
Frugal people: Dine out occasionally. Visit moderately priced restaurants and eat tasty but less expensive dishes.
Cheapskates: They would rather order only appetizer. They would have a meal when someone else is paying. They would try to intentionally forget the tip or would pay a nominal tip to the waiter.
Spendthrifts: Buy costly gifts. Give treat to all friends. Buy drinks for everyone at the bar.
Frugal people: Cook a good meal. Give treat to the birthday girl or buy.
Cheapskates: Don't bother to buy a gift. Ask others to give them a treat.
It is true that there's no scientific way to make a stark distinction between cheapskates and frugal people. Perhaps, a simple way to distinguish between them is to analyze the 4 differences stated above.