Podcast Summary: Optimal Finance Daily | Episode 3382

Frugal or Cheap: How to Tell and Why it Matters
By Vicki Cook & Amy Blacklock (Women Who Money)
Hosted by Diania Merriam
Date: December 10, 2025

Episode Overview

This episode explores the nuanced differences between being frugal and being cheap—two mindsets often conflated but fundamentally distinct in their motivations and outcomes. Diania Merriam narrates and reflects on an article by Vicki Cook and Amy Blacklock of Women Who Money, offering both definitions and practical examples to help listeners clarify their approach to money management. The episode aims to help listeners avoid the pitfalls of cheapness while embracing mindful, value-driven frugality on the journey to financial independence.

Key Discussion Points & Insights

1. The Financial Independence Mindset

• Building good money habits, saving for the future, and aligning spending with personal goals is central to the journey ([01:14]).
• Many wrestle with spending hesitantly, questioning each purchase in the pursuit of saving.

2. Defining Frugality

• Frugality is “the careful management of material resources, especially money” ([02:00]).
  • It’s about aligning spending with priorities and values—not suffering due to deprivation.
  • Examples of frugal habits:
    • Buying generic drugs, using coupons, and shopping at discount stores.
    • Maintaining cars longer, borrowing library books, hosting cookouts vs. dining out.
    • Establishing sinking funds for planned future expenses.
• Quote:

  “Frugality means your spending decisions are aligned with your priorities and values, not going without or suffering because you lack things you need.”
  — (Vicki Cook & Amy Blacklock, [02:10])

3. What "Cheap" Really Means

• Cheapness is defined as spending the bare minimum without concern for the impact on others or long-term effects ([03:35]).
  • Cheapness is self-focused, potentially harmful, and can actually cost more down the line.
  • Signs of cheapness:
    • Giving lousy or no tips, buying low-quality items, lying for discounts, and shirking social obligations to save money.
• Quote:

  “Being cheap is being selfish with your money... ignoring other people, their feelings, and even their bank accounts can hurt you.”
  — (Vicki Cook & Amy Blacklock, [04:00])

4. When Cheapness Backfires

• Often, being cheap can result in higher costs or lost relationships ([04:40]).
  • Low-priced items may break quickly, or missing important events harms social bonds.

5. Shifting Mindsets: From Cheap to Frugal

• Suggestions for escaping a cheap mindset:
  • Skip the extras at a restaurant but tip appropriately.
  • Attend events by budgeting or finding extra money, rather than making excuses to avoid them.
  • Gifts should be thoughtful—not just low-cost for the sake of saving ([05:45]-[07:00]).

6. Knowing the Difference in Real Life

• Trust your gut: If you feel uneasy or question if you’re crossing a line, it’s worth reconsidering your approach ([07:10]).
• If frugal choices align with your values and bring joy or utility, you’re likely on the right path.

7. Narrator’s Personal Reflection

• Diania Merriam shares her perspective:
  • Quote:

    “Being cheap is rooted in a scarcity mindset and being frugal is rooted in an abundance mindset. Being cheap is being fearful. Your only concern is saving money regardless of the consequences.”
    — (Diania Merriam, [10:15])

  • True frugality is about discernment, creativity, and maximizing value—not deprivation.
  • Quote:

    “The primary goal is to get the appropriate amount of value out of the money you do spend, not to try and reduce spending in a way that feels like deprivation.”
    — (Diania Merriam, [10:55])

Notable Quotes & Memorable Moments

• On Frugality:

  “When you spend, you do so thoughtfully, purchasing quality items that last longer or reduce the impact on the environment.”
  — (Vicki Cook & Amy Blacklock, [02:20])

• On Cheapness Impact:

  “Cheap products often break or wear out quickly... Cheap might even have the opposite effect and cause you to spend more money and time in the long run.”
  — (Vicki Cook & Amy Blacklock, [03:52])

• Emotional Test for Cheapness:

  “If you’re questioning whether you should add a dollar or two to your waiter’s tip, go ahead and do it.”
  — (Vicki Cook & Amy Blacklock, [07:12])

• Host's Summary:

  “Frugality for me is about resourcefulness and creativity and getting your needs met. This will inevitably help you spend less, but the primary goal is to get the appropriate amount of value.”
  — (Diania Merriam, [10:55])

Timestamps for Key Segments

• [01:14] — Introduction to frugality vs. cheapness and the financial independence context
• [02:00] — Defining frugality and examples of frugal behavior
• [03:35] — What it means to be cheap: definition and behaviors
• [05:45] — How being cheap can undermine both your finances and relationships
• [07:10] — How to recognize if you are acting cheap instead of frugal
• [10:15] — Host’s reflection on the scarcity vs. abundance mindset

Conclusion

This episode gives practical tools and clear examples to distinguish frugality from cheapness, encouraging listeners to approach saving with a thoughtful, value-aligned mindset that benefits both themselves and those around them. Diania reiterates that embracing frugality is not about relentless self-denial, but about living resourcefully, maximizing value, and maintaining strong social connections. The core takeaway: Adopt frugality with gratitude and abundance, not fear and deprivation, for lasting financial well-being.