Frugal vs. Cheap

I've heard the term frugal used often to justify decision making. I have also witnessed employees eyes rolling rants start, and morale dip after some uses. In the past couple months I have asked many people how they would differentiate frugal and cheap.


Frugal holds positive connotations and cheap holds negative ones. Frugality can trigger conservativeness and money saving traits in employees whereas cheapness often has the opposite effect.


In describing the difference many people gave examples. Such as a manager talking to an employee for 15 minutes about how a $7 parking fee on an expense report should have been avoided as an example of cheap. Or that buying a generic brand of pen for company office supplies resulting in employees having one or more frustrating episodes per week where their work is interrupted by a pen that just ceases to write.


Examples of frugal tend more in the direction of encouraging employees to turn off lights when not in use or removing lights from vending machines where the advertising is not necessary.


Most people are unable to give a tangible definition. One visceral explanation is that cheapness makes us feel bad, whereas frugality still involves sacrifice but makes us feel good. When I shared this it received plenty of affirmative nods.


Tori suggested where cheapness and frugality are similar in that they represent saving money, they differ in the quality of the result. A frugal decision saves money and does not reduce quality in substantive areas. (i.e. buying a quality product at a discount) A cheap decision has a final lower quality result. (i.e. buying a lower quality product)


Ken offered an example that made a key distinction that cheapness might only consider the short term cost savings whereas frugality considers longer term costs. Cheapness might always lead us to buy the least expensive option whereas frugality could lead us to spend a little more money for a solution that has greater longevity.


A handy exercise is to make a list of 3 events that reflect cheapness and 3 that reflect frugality in the workplace from your own experience. Reflect on that list and think of how it made you and other employees feel. Encourage others to make their own lists. And strive to a higher standard in future decisions to preserve morale and long term productivity over short term minor cost savings.