There are many ways to distinguish between frugal and cheap. One way is if you are frugal not just when spending your own money but with other people’s as well. For example, I don’t have to pay for water at my apartment but I still don’t leave the water running when I’m brushing my teeth. I just don’t like to waste anything even if I am not paying for it.
I try to help my friends be frugal as well. Different people are going to have different ideas about what is the best way to spend their money. People probably aren’t going to be very receptive to you trying to change their spending habits. With the right approach though you can help. My best friend likes to dine out all the time. Telling him he could save money by dining out less isn’t likely to change his habits. Giving him ideas for meals he could prepare simply and quickly might. Letting him know about discounts such as those available at Restaurant.com can help him save money when he does dine out.
Ultimately people are going to spend their money the way they want to. Of course, that is their decision to make. I just try to make them aware of frugal options.