Real Estate Matters | The difference between being cheap and frugal

Sam Lee

Many people work hard to stash away their earnings and save up for the initial pot of capital to get their foot on the so-called ‘property ladder’.

Although the end goal of saving money might be the same, people commonly take two different approaches to get there. Some try to get there by being cheap, and others by being frugal. It’s not always about what you’re doing, but also how you do it, right? But what’s the difference?

In short, a cheap person saves money in any possible scenario with no regard to the value they are getting. A frugal person happily spends money on things of value and saves money on things of no value.

You might have noticed that one word in particular intentionally got repeated a few times in the last sentence: value.

Perhaps an example would serve to best illustrate the difference. A cheap person would simply look at the price tag of a MOP200 book or MOP500/month gym membership and pass just because they think it’s expensive with no regard to value. A frugal person will still consider the dollar amount, but will recognize that the potential value they can get from a good book or a healthy lifestyle will far outweigh the price and happily put up the amount.

Another big difference is that a frugal person values time, while a cheap person values money.

Here’s a classic example I think most people can relate to: You go out to dinner with a group of 7+ friends. You all order meals that are similar in value (within MOP150), but a few of your friends get a drink for MOP20. Because some people got drinks and more expensive meals, there is always that one person who tries to spend 15 minutes trying to allocate each item on the bill to the appropriate person. This person is being cheap, and not valuing everyone’s time. A frugal person would simply split the bill down the middle and pony up the MOP20 – MOP50 extra for their friends.

Frugality is admired, while cheapness is scorned. Money is meaningless on its own, and should always be considered with relation to the value that you get in exchange for it.

If you’d like to find out more, please feel free to get in touch at [email protected]

Sam Lee is a marketing manager and property consultant at JML Property.  JML was established in 1994 and offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.

www.JMLProperty.com

[email protected]