In today’s uncertain times, many people are looking for ways to save money or make an extra buck. Some vow to cut down on spending, while others are doing extreme measures just to be able to stretch their money a bit further.

Frugal families and individuals are on the right track as they have found ways to save money by sticking to a budget and making a few lifestyle changes as a way to adjust to hard times. Cheap people have also found ways to hold on to money a bit longer, but their penny-pinching ways often become a cause of frustration for their co-workers, friends, and loved ones.

There is a difference between frugality and being cheap. The former is a positive quality, while the other is a bad label that can make people think twice about inviting you over to their home or into their lives.

Here’s the difference between being frugal and being cheap.

Downgrading your Internet plan is being frugal. Trying to finagle your neighbor’s Wi-Fi password from a child so you can use their Internet whenever you want is being cheap.

Bringing a homemade gift for the host of a party is being frugal. Showing up empty-handed, then stuffing your bag with food, snacks and toiletries is just being plain cheap—and rude.

A cheap person will usually buy an item of questionable quality just because it’s on sale. A frugal person knows that one should save up to buy the best quality that one can afford to avoid making repeat purchases in the future.

At restaurants, expect cheap people to never leave a tip, and they often let others foot the bill. They never reciprocate, and when they do chip in, they grill their tablemates over the amount of food and beverages that they ordered.

Frugal people are happy because they are able to save money while enjoying life in their own way. Cheap people are often miserable as they only think about holding on to their money, and it pains them to part with it, no matter if the situation calls for them to spend.

In the end, frugality is really about making smart choices with your money while enjoying life, and it also means that you know when it is the right time to spend or give money. So don’t be cheap, be frugal. Your well-being will benefit from it, and your friends, family and other people that you interact with will appreciate you for it.

For more, check out Jobs & Hire’s report on how to make budgeting fun for the family.