Why do we equate Frugal with being Cheap?

While thinking the other day about personal finances, the question dawned on me, why do we use frugal and cheap so interchangeably?  Often when one is described as frugal we usually associate that with being cheap.  But is that necessarily the case?  If not, then what is the difference between being frugal and being cheap?

Simply put, being frugal means being resourceful with your money and not spending it on wasteful things.  It is maximizing the money you have, but still spending it on things you enjoy.

friday-tidbit-09-30-2016-why-do-we-equate-frugal-with-being-cheapBeing cheap on the other hand is handling your money stingily or miserly.  Often I see cheap people as being hoarders and not givers of their money.  They also make bad financial purchases simply because, “it was a good deal,” which in the long run costs them more money.  Cheap people often look solely at the purchase price and do not look at the sacrifice of time and money they might have to make to travel further to make the purchase.

So what is the difference between a frugal and a cheap person?  The main difference is the attitude with which you view money.  Frugal people do what is best in the long run and don’t just look in the short-term at the purchase price.   Frugality might also mean paying a little bit more for an item initially that will last longer than its cheaper counterpart.  Associating being frugal with being cheap is really an indicator of our culture that says the people who are doing well with money are the ones who are spending it all, or spending money they do not actually have, on new shiny items.  So if you are being disciplined and thinking long-term with money you must then be cheap.

Overall, I think it is time to step back and start to think differently about what it means to be frugal and what it means to be cheap.  That will start to make being frugal a positive thing instead of being a negative.

Is there any difference that I forgot to include?  What do you think the difference between being frugal and being cheap is?

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JW’s Financial Coaching Podcast Lesson #122-How to use side hustles to get out of debt with guest Tracey Minutolo

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  • Guest Tracey Minutolo joins us to talk about Side Hustling
  • What side hustling is and isn’t
  • How it has impacted Tracey’s finances
  • Why should someone side hustle
  • Quote of the lesson from Jon Acuff

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Whenever I communicate with listeners of the show and ask what topics they would like me to cover on the show, one of the more popular requests is how to make more money through a side business or second job.

Starting something on the side is a great way to earn some money on the side. To improve you financial situation you can either do one of two things 1.) Cut back or 2.) Earn more income.

On lesson 4 of the show we discussed whether it was more important to spend less or make more when trying to get out of debt. The obvious answer of course is to do both!

Well to help out with learning how to side hustle I had the chance to interview Tracey Minutolo over at TraceyMinutolo.com. Tracey is a Side Hustle Coach & Financial Freedom Fighter.

Tracey shares what the term “Side Hustle” means to her. She also talks about how she got involved in side hustling and how she was able to start her virtual assistant side business.

We also talk a little bit about Tracey’s debt free journey. She started out with about $60,000 in debt a little over two years ago. But she’s paid off her car loan and is going at her student loans with aggression. Her goal is to have it paid off by the end of 2017.

But most importantly the thing the stuck out to me was Tracey’s story of how becoming disciplined changed her life completely. It was no coincidence that Tracey’s side hustle and debt free journey took off around the same time.

You see about two years ago Tracey started to listen to podcast’s which taught her new information and gave her hope to make changes in her life. She took that hope and became focused and the disciplined she gained in those life changes not only impacted her career and finances, but other areas of her life as well!

Tracey’s story is very inspiring even if you aren’t looking to start a side hustle or get out of debt. She just got tired of carrying her student loans and decided to do something about it! My hope is that her story will inspire you to make changes in your life and think of something you can do on the side to increase your income.

Resources mentioned in the show

Today’s quote of the lesson is brought to you by Audible.com

“Discipline begets discipline.” ~Jon Acuff

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, or by downloading the iPhone app. Or you may listen to the podcast on the JW’s Financial Coaching Facebook Fan page.

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JW’s Financial Coaching Podcast Lesson #121-It’s not what you start to do, it’s what you stop doing that matters

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  • Why it is more important to focus on what you need to stop doing then to focus on what you need to start doing
  • What do you need to stop doing?
  • The difficulty in starting to do something new before you stop doing the old thing
  • Bad habits are tough to stop
  • Quote of the lesson from Peter Drucker

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A few weeks back I was reading “Eventual Millionaire” by Jamie Tardy and read upon a quote that made me pause and ponder for a few moments. The quote was from author and management consultant Peter Drucker.

“Don’t tell me what you’re doing. Tell me what you stopped doing.”

The quote blew me away and make me think about changing how I work with people when creating new financial habits.

Normally I focus primarily in four main areas

  1. Spending your money before the month starts with a budget
  2. Becoming Debt Free
  3. Saving Money
  4. Spend money on thing that you value the most

Doing those four things allows us to stop overspending, committing future income before we earn it, and stop living with no financial margins in our life.

However maybe instead of focusing on new stuff to do, we should focus more on removing negative financial habits like overspending, having no control of our money each month, living with debt, and a continual increase in lifestyle without an increase in saving and investing.

Because it is hard to develop good habits when we still have negative ones. It is hard to save money when you are still in debt and don’t know where you spend your money each month.

I think a lot of times this is why we struggle with changing our financial behavior, because we focus so much on what we should be doing instead of focusing on what we need to stop doing.

The goal of today’s lesson is to help you reflect on what are some things you need to stop doing to improve your finances

Other resources mention in today’s show

Today’s quote of the lesson is brought to you by Podbean.com

“Don’t tell me what you’re doing. Tell me what you stopped doing. ” ~Peter Drucker

Enjoyed this lesson? If so, please consider taking a few minutes to leave a review of the show either in Stitcher SmartRadio, or iTunes. For a step by step video of how that works, please watch this video on how to leave a review in iTunes.

You can subscribe to future podcasts through Stitcher SmartRadio or iTunes, or by downloading the iPhone app. Or you may listen to the podcast on the JW’s Financial Coaching Facebook Fan page.

Want to learn more about my views on money?
Get a free copy of "The JW Manifesto on Money"
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JW’s Financial Coaching Podcast Lesson #120-The difference between knowing and understanding your finances

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  • What knowing our finances means
  • Why most of us don’t know or understand our financial situation
  • What understanding our finances does for us
  • How to start knowing and understanding our finances
  • Quote of the lesson from Charles Kettering

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JW’s Financial Coaching Podcast Lesson #119-The EMV Chip Debit Cards and What They Mean to You

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  • What is the EMV Chip Debit Card?
  • Difference between running your debit card as “Credit” vs “Debit”
  • Why the EMV Chip Card will reduce fraud
  • My Experience in using my EMV Chip Card
  • Quote of the lesson from T. Harv Eker

The JW’s Financial Coaching Podcast_119

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JW’s Financial Coaching Podcast Lesson #118-Your Life Has Changed, But Is Your Coverage Up To Date?

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  • Life events that need you to look at your finances
  • Why your life insurance coverage may not be enough
  • Is your emergency fund at the level you want it to be?
  • Why we need to look at our level of investing and giving once a year.
  • Quote of the lesson

The JW’s Financial Coaching Podcast_118

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Friday Financial Tidbit-Washington can’t change our finances

Like many of you, I’m already sick of the election coverage. No matter where we are or what we are doing, whether it is Facebook, Twitter, watching TV, listening to the radio, or driving on our morning commute we can’t escape it. It seems like there is always an article, opinion piece, analysis or advertisement trying to persuade us to one side.

On the national level, one of the often talked about issue that gets my attention and makes me chuckle has to do with each candidates tax proposal, or how their tax plan will “fix” the economy. Everyone has an idea that will help balance the budget, help the middle class, protect small business from paying high taxes, etc. Continue reading

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JW’s Financial Coaching Podcast Lesson #117-Don’t Be Average 2016 Edition

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  • The average US household financial stats
  • What these stats say about your economy
  • What to do to be better than average
  • Motivation to not be financially average
  • Quote of the lesson from Steve Siebold

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Interest rate is *not* the problem

When I’m working with a client on getting out of debt, especially on student loans or credits, one of the first things they ask about is how to lower their interest rates on the loans. Continue reading

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JW’s Financial Coaching Podcast Lesson #116-How to decide between enjoying your money now vs. enjoying it later

  • How to balance enjoying money now vs. enjoying it later
  • The three questions Lisa and I ask when making a purchase
  • Why the amount in your bank account doesn’t tell you what you SHOULD do, it tells you what you CAN do.
  • Should I be spending on luxuries when I’m in debt?
  • Quote of the lesson from Warren Buffett

The JW’s Financial Coaching Podcast_116

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