Since I began writing, about a year ago, “Frugal” has become quite the buzzword which is practically a 180 from when I wrote “When Did Frugality Cease Being a Virtue.” I even read an article in the Wall Street Journal last week that proclaimed Frugality is once again a virtue.

When I began writing, I’m not quite sure if I had the knowledge of frugality that I do now, but after a year of writing and adapting my frugal lifestyle I think I’m finally able to give a good explaination of what frugality is.

First, in order to give a good view on frugality we need to remember that being frugal is not being cheap. A cheap person refrains from purchasing until they absolutely have to, even then they might wait to buy. When they do buy they buy the cheapest thing with no regard for quality. A frugal person may hold off making a purchase, but it’s usually to make sure they get the best deal (not necessarily the cheapest). Case in point: Would you rather spend $400 every two or three years on a piece of furniture from Ikea, or would you rather spend $1,000 on a nice good quality piece that will last you a decade or more?

Now we need to analyze the day to day lifestyle of someone who is frugal vs. someone who is cheap. A cheap person tends to not buy things unless they absolutely have to, a frugal person makes calculated choices about what is important to them. You may frequently see frugal people at starbucks or going out to dinner. Cheap people typically don’t like to put money into maintaining what they have, they will use something until it is broken, and then might keep using it. Frugal people put money into maintnence. We take care of our vehicles by do regularly scheduled maintnence, and we take care of our bodies by staying fit and going to the doctor for checkups. We keep our houses nice and frequently do minor improvement projects so that we don’t have to do major ones later.

Being frugal is about controlling your money and making choices so that you can allow yourself to splurge. It’s about not doing X so that you can do or buy what you love. In fact, you will frequently see people choose to give up Starbucks so they can afford a nicer car, or give up a nicer car so that they can afford a nicer house. We all need to splurge, if you don’t you’re letting your money control you, and you will eventually lose.