by Choco Pie

Created on: October 28, 2009   Last Updated: October 29, 2009

While the whole world is struggling to survive from the current global financial crisis , it is best to do some introspection to evaluate our spending habits and lifestyle in general. Maybe, its time to ask ourselves what is the difference between being frugal and being cheap? Surprisingly, when I asked my friends about this, most of them have various definitions and only a handful know the correct boundary which separates the two.

What does this mean? Personally, I believe that one of the main reasons why most people don't practice frugality is because they fear that their friends will label them as cheap, stingy or a tightwad.

In a society where good spenders are much praised than those who are not, there is a stigma that frugal people has to lived by. But being frugal is not a personality setback, it doesn't make you less of a person. Most frugal people are able to prepare themselves with a good mindset on how to survive during the rainy days.

So what's the difference between being frugal and being cheap?

In a nutshell, cheap people measure things in terms of its price cost while frugal people measure them in terms of its value for the money. Cheap people will simply buy the cheapest item on the grocery shelf but frugal people will study and compare products and buy the most economical item with prime consideration on quality and its usefulness vis a vis the price.

Cheap people are inconsiderate about other people but frugal people always take into account if their thrifty habits will affect others negatively. Cheap people are unreasonable when they haggle about the prices and believe that they deserve the lowest price possible, but frugal people, although usually as assertive as cheap people when asking for a discount, will never become rude and understand that they don't deserve that special deal all the time. They consider that there is a reasonable price to pay for the quality of an item. usually frugal people does not consider the brand names of any item. More often , they will decide on the basis of functionality.

It doesn't matter what other people think, what is important is to develop the correct mindset and live a debt free life. After all, it is your life not theirs and to suffer the consequence is a total blow to one's capacity to mange one's finances very well. Frugality is the key to stay within ones budget, and it is best to live with-in our means in order to sleep soundly at night.

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