'There's a big difference between being frugal and being cheap,' says money coach—how she decides where to spend

Michela Allocca used to think saving money meant spending as little as possible.

“In my early 20s, I really didn’t know what to do with my money, so I just hoarded as much as I possibly could,” Allocca tells CNBC Make It.

The Chicago-based personal finance consultant and author of “Own Your Money” says that mindset led to decisions she regretted later, such as buying cheap clothes that didn’t last, turning down trips or experiences she could afford or taking public transit when it would have been safer to call an Uber.

“I started to associate spending money with being a bad thing,” she says. “It was me avoiding spending to the detriment of my own life.”

Her perspective has shifted over time. Now 30, Allocca says she focuses less on cutting every cost and more on spending with purpose — what she calls “buy less, but buy better.”