Frugal or just cheap?

Recently, my friend and I had an argument. She branded me cheap for buying 'Afia' to 'Delmonte' juice. Later that evening, I thought to myself: if both of the products are apple juices, have the same taste, same quantity. To top it all, Afia is cheaper than Delmonte. So why not?

Surprisingly, when I confronted her concerning my thoughts about this, she had various explanations.

What’s the difference between being frugal and being cheap? I believe only a handful knows the correct boundary which separates the two. 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, miser, mean. In Kenya, you may be branded with negative words such as M'ngumu, m'choyo and 'real kikuyu'. Now who would want to be called that?

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

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.

Cheap people are unreasonable when haggling 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.

In CHEAP We Trust: The Story of a Misunderstood American Virtue 

Like Lauren Weber states in her book in Cheap We Trust and from the Bank in Iowa which closed during the Great Depression of the 1930’s, it quotes, “Frugality is the parent of fortune.

What would you do if you were worth millions or even billions?

Some of you may do nothing at all. Believe it or not, there are millionaires and billionaires among us who masquerade as relatively normal, money-conscious people.

Take a peek at some of the most frugal wealthy people in the world.

Warren Buffett

Millions of people read Warren Buffett's books and follow every move of his company, Berkshire Hathaway. But the real secret to Buffett's personal fortune may be his penchant for frugality.

The Warren Buffett Way, Second EditionHe's worth an estimated $47 billion. He still lives in a modest home in Omaha, Neb., that he purchased for $31,500 more than 50 years ago. 

Although Buffett has dined in the best restaurants around the globe, given the choice, he would opt for a good burger and fries accompanied by a cold cherry Coke.

When asked why he doesn't own a yacht, he responded, "Most toys are just a pain in the neck."

Carlos Slim HelĂș

While most of the world is very familiar with Bill Gates, the name Carlos Slim HelĂș rarely rings a bell. But it's a name worth knowing.

Slim, a native of Mexico, was recently named the world's richest person -- that's right, richer than the Microsoft co-founder. Slim is worth more than $53 billion, and, while he could afford the world's most extravagant luxuries, he rarely indulges.

He, like Buffett, doesn't own a yacht or plane, and he has lived in the same home for more than 40 years.

Frederik Meijer

If you live in the Midwest, chances are good that you shop at Frederik Meijer's chain of grocery stores. Meijer is worth more than $5 billion, and nearly half of that was amassed when everyone else was watching their net worth drop in 2009.

Like Buffett, he buys reasonably priced cars and drives them until they die, and, like Kamprad, he chooses affordable motels when traveling for work. Also, like others on this list, Meijer is focused on the good his wealth can provide to the community.

Bottom line

The little secret of some of the world's wealthiest people is that they rarely act like it. Instead of over-the-top spending, they're busy figuring out how to save and invest to have that much more in the future. It's a habit you might want to consider in order to build up your own little storehouse of cash.

” I think I’ll just stop now and let the difference between the two dawn on you as you read and experience more.

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