It is possible that some people don't realize that being "frugal" and being "cheap" are two completely different things.

In a recent letter to Dear Abby, Tim says his wife's feelings were hurt by a friend who referred to her as "cheap." Tim pointed out the fact they do use coupons when they shop or dine out, watch their thermostats, recycle, etc. He also happened to mention their net worth is "north of a million dollars."

In her response, Abby defended the other woman saying she simply used the wrong word and should have said frugal rather than cheap.

According to Dictionary.com, frugal means "economical in use or expenditure; prudently saving or sparing; not wasteful." I look at it as making the most out of your money.

Cheap, in this context, is defined as stingy; overly frugal; chintzy. A person who is cheap takes thriftiness to an extreme.

People who have money, though not necessarily wealthy, tend not to be frugal because they have plenty of money and have no need to "watch every penny."

However, it could be reasoned that one of the reasons why they have plenty of money is because they have been frugal and have been able to save up a surplus of finances.

Those who tend to live paycheck to paycheck are likely to be more frugal in their spending and their lifestyle in an effort to stretch their limited paycheck dollars to cover the ever-growing cost of living. There is certainly nothing wrong with that at all. Too many people who are scraping by aren't frugal enough, spending money foolishly on luxuries and entertainment options that aren't necessary.

Let's take it one step further to help us understand the difference between being frugal and being cheap.

A frugal person will consider whether buying the generic brand at the grocery story is worth the savings of a dollar or two over the cost of the name brand. A careful spender will keep an eye on where the thermostat is set, turn off unused and unnecessary lights, drive for maximum gas mileage efficiency, check menu prices before making a selection at the restaurant, and shop for bargains when shopping for clothing groceries. A frugal person will save their financial surplus rather than going out to look for ways to spend the extra money.

A cheap person at the restaurant will leave a tip below the commonly accepted minimum, will give minimally to church and to charities, and will try to get by getting the least expensive present for the birthday, wedding, or anniversary of a friend or family member.

I would say it comes down to this. Being frugal is about how you are with things that affect you personally. Being cheap has more to do with being stingy and selfish when it comes to giving to others. If you buy a lesser quality-priced item for someone else than what you would buy for yourself, you are being cheap.