Photo courtesy www.walletpop.com

Are you (or someone you know) a big cheapo? What are the tell-tale signs? And what’s the difference between being cheap and frugal? These were some of the questions posed this morning during my visit on The Tyra Show. (P.S. Ms. Banks is even MORE beautiful in person). While the episode isn’t airing until sometime in April, I thought it would be interesting to discuss the topic here and now.  

Frugal: saving for the good of something greater than just to pocket a few extra bucks.  Someone who is frugal may not instantly go for the least expensive item on the menu or on the rack, either. Instead, they’ll look for the best “deal” – something that will be affordable and also valuable at the same time. Let’s say you’re paying $100 a month for souped-up cable and are rarely home to watch TV, switching to basic or getting rid of TV altogether would be, in my mind, a frugal move. It’s a smart, obvious decision that will save you $1200 a  year – enough for a Hawaii vacation or a mortgage payment. When someone is frugal, they’re being thoughtful and keeping long-term goals in mind, like saving for a house, a car or an emergency nest egg. Bottom line: Frugal is smart spending and a savvy way to invest your time and money. And no one gets hurt.

Cheap: If someone shares a story on how they saved some cash and this story makes you cringe, this someone is most likely cheap. Cheap is a narrow-minded way of spending money. The ultimate and only goal in mind is to save for today, without any concern for the time and energy involved to get from Point A to Point Cheap.  As my friend Kate posted on my Facebook wall, “Cheap is when you pass up on good opportunities because you don’t want to part with the money you need to access them.” Like, refusing to spend $20 to attend a strategic networking event (even though you can afford it) that could introduce you to hundreds of hiring managers.  

Cheap can be tacky. Cheap can be careless. Cheap doesn’t leave a tip, forgets his/her wallet strangely one too many times. Cheap is when you lie and cheat your way to savings. Cheap also hurts relationships.