Understanding Frugal Living
For some reason, terms like “cheapskate” and “frugal” have become negative and derogatory over the years. I can’t understand it, especially considering that over 70% of Americans are in credit card debt.
This means they’re either forced to live frugally or continue spending as they do, potentially passing on their debt to their children.
When most people think of frugal living, they imagine a lifestyle akin to living like a monk: one pair of clothes and a mattress on the floor. But that’s completely wrong. Everyone can benefit from living a frugal lifestyle.
I live frugally and find myself traveling around the world, eating out, and hanging out with friends. I’m able to do all this with a 790 credit score and zero dollars in debt.
I’m 23 years old and have been living on my own since I was 18. To be honest, I live pretty comfortably, and that’s not to brag but to show you that it is possible. This is why I want to share some frugal tips that you can apply in your life.
What is Frugal Living?
Frugal living means adopting a lifestyle that helps you save money and reduce financial stress. It’s about being mindful of your spending habits and making conscious decisions to cut back on unnecessary expenses.
One of my biggest pet peeves is people spending money, knowing they are overdrafting their accounts. To do this, you need to know what is important to you and how you currently spend your money.
This approach encourages living within your means, prioritizing needs over wants, and finding value in simplicity. By living frugally, I no longer worry about paying my next rent but focus on my next investment. Choose to live freely, and over time your wallet will thank you.
Remember, frugal living isn’t about living out of a cardboard box. It’s about being extremely mindful of where every dollar is going. By learning some quick frugal tips, you can drastically change your life and begin to spend time doing the things you love.
Benefits of a Frugal Lifestyle
Living frugally helps you save money and achieve your financial goals faster. By reducing unnecessary spending, you can allocate more resources towards savings, investments, or paying off debt.
I love listening to podcasts like Caleb Hammer’s Financial Audit, where he interviews and analyzes the budgets of average people with significant debt.
As Caleb looks through their credit card statements, it becomes clear that many people have bad money habits, buying things they don’t need. I often find myself smiling because while they’re busy paying off their credit card interest, I’m busy earning interest on my investments.
I’m not a rocket scientist or anything, I just follow simple frugal tips, allowing my bank accounts to save thousands, while the average American continues to drown in credit card debt.
The best thing about investments is that each year you get to live a bit more lavishly than the year prior because your money has made money. Start off living frugally and over time, you can splurge.
This lifestyle also reduces financial stress and anxiety, fostering a sense of security and peace of mind. Additionally, embracing frugality often leads to a more sustainable and environmentally friendly lifestyle, minimizing waste and conserving resources.
Through frugal living, my mind becomes clearer as I have less clutter and fewer things to worry about.
Make Your Frugal Living Add Up
Frugal living is the most logical alternative for the majority of people. If you are in hundreds of thousands of dollars in debt with no home, zero dollars in retirement, and zero dollars in an emergency fund, frugal living is your only option, and you have to take full advantage of it.
Every cent you earn should go towards paying down your debt, not shopping. You can argue that life is depressing without your daily shopping sprees or streaming services, but having no roof over your head seems like a much worse deal.
Over the years, you will slowly progress and realize that you have some wiggle room to invest. Perhaps you can pick up another side hustle and invest what you earn while living frugally.
One day, your frugal living will pay off, buying you your freedom as you can retire earlier than most people because you don’t need a high cost of living to be happy.
Frugal Living Tips to Save Extra Money
Track Your Spending to Save Money
If you want to live a more frugal life, you must keep track of your daily expenses to identify areas where you can cut back.
Use a budgeting app or spreadsheet to monitor your spending, categorizing expenses to see where your money is going. This habit helps you spot trends, avoid unnecessary costs, and make informed decisions about your spending. Many people don’t even realize they have monthly subscriptions.
The only way to overcome this is to be completely self-aware of where every dollar goes. One thing I find funny is that people lose money because they’re not paying their minimum payments on their credit cards and accrue additional late fees or overdraft fees. You can easily overcome this with frugal living.
Identify Areas to Cut Back
After truly understanding the cash flow of your money, review your budget to identify areas where you can reduce spending. Look for subscriptions you rarely use, dining out frequently, or impulse purchases. Notable items include Netflix, Hulu, and Disney subscriptions.
You don’t need all these subscriptions. Just stick with one. Impulse purchases like gas station snacks or drinks can be bought in bulk at Costco to save more.
Cutting back on these expenses can free up more money for savings or investments. When you save money, put it into an investment account right away. This could be your Roth IRA, a brokerage account, or even just a savings account.
Create a Budget That Works for You
Frugal living can be fun. That’s why you need to create a budget that aligns with your financial goals and priorities. Creating a budget allows you to stick to your financial plans while having fun.
Allocate your income into categories like savings, investments, and expenses. Ensure your budget is realistic and flexible, allowing for adjustments as your financial situation or goals change.
The simple task of revisiting your budget once a month for 30 minutes makes a big difference in your life. Initially, you notice your impulse buys that can be easily reduced the next month, and every month, you learn more about what to and not to buy.
Frugal Kitchen Essentials
Meal Planning to Reduce Food Waste
Plan your meals in advance to avoid food waste and save money. Use a meal planning app or create a weekly menu. If you don’t know how to create a good meal plan, there are tons of resources online for this exact thing.
This strategy helps you buy only what you need, reducing the likelihood of food spoilage and unnecessary spending on takeout or convenience foods.
Frugal living isn’t about cutting everything out of your life. It’s about being strategic with how you approach it and planning your weekly meals can drastically improve your financial situation. If you have more than one person in your household, you can exponentially decrease your entire cost of living.
Smart Grocery Shopping Strategies
Buy in bulk and stock up on non-perishable items. Use coupons and discount codes to save money on groceries. Consider shopping at discount stores or using cashback apps to get the best deals.
By planning your shopping trips, you can save significantly on your grocery bills. Initially, this might sound dreadful, but over time you will get used to knowing where the deals are and essentially they will become second nature.
Cooking on a Budget
One of my favorite things to do is cooking at home. Cook meals at home instead of dining out. Use affordable ingredients and leftovers to reduce food waste.
Cooking at home is not only cheaper but also healthier. Try batch cooking and freezing meals for busy days to save time and money.
Cooking at home actually saves more time and money in the long run. It might not feel like it, but when you meal plan, you could cook for one day and have different meals last for two or even three days.
If you order food more than 1x a week, it signifies that this frugal tip can help you save thousands for your family as cooking at home is not only cost-effective, you can turn it into a family event.
Frugal Fashion on a Budget
Thrift Shopping for Quality Items
Shop at thrift stores or garage sales for quality items at a lower cost. Look for timeless pieces that won’t go out of style quickly. Look out for events like ThriftCon near you, as those events feature unique clothing for cheap. It is also a great opportunity to hang out with friends as well.
Thrift shopping is a great way to find unique, high-quality clothing at a fraction of the price of new items.
DIY Fashion Hacks to Save Money
Learn to repair and alter your own clothes. Upcycle old items into new ones to reduce waste. T
his can also be a side hobby if you have some extra time to spare, and you are essentially learning a new skill while saving money at the same time.
Simple sewing skills can save you money on clothing repairs and alterations, allowing you to extend the life of your wardrobe.
Building a Timeless Wardrobe
Invest in quality, timeless pieces that won’t need to be replaced often. Avoid fast fashion and trendy items that may go out of style quickly.
I know some people who spend hours every week staying on top of the latest trends. Not only is that a waste of time and money, but it’s also a big headache.
Focus on classic styles and durable materials to build a wardrobe that lasts. Remember that frugality doesn’t equate to cheapness; I like to think of it as more of a minimalistic approach.
Frugal Living Habits
Reduce, Reuse, Recycle to Save Money
Reduce your consumption of single-use items. Reuse items like bags, containers, and water bottles. Recycle items that can’t be reused.
Adopting these habits not only saves money but also supports environmental conservation.
Simple Swaps for a More Frugal Life
Swap paper towels for microfiber cloths. Use a traditional coffee maker instead of a single-serve machine. These small changes can lead to significant savings over time, reducing waste and cutting down on unnecessary expenses.
Embracing a Minimalist Lifestyle
Declutter your living space to reduce waste and save money. Focus on what’s truly important to you and let go of unnecessary items. A minimalist lifestyle simplifies your life, reduces clutter, and can save you money by avoiding unnecessary purchases.
With the current economic state, it’s becoming harder and harder to buy groceries and do everyday activities. By adopting a minimalist lifestyle, it becomes easier for you to cope.
Frugal Fitness and Wellness
Free or Low-Cost Fitness Options
Find free or low-cost fitness options like walking or bodyweight exercises. Use online resources and apps to stay motivated. Many fitness apps and websites offer free workout plans, helping you stay fit without a gym membership.
There are so many opportunities online, especially during holidays, that you can get free apps and personal trainers for 90 days.
If you use a fitness app like Fitbit or Garmin, they offer free daily activities to do on your own.
Prioritizing Mental Health on a Budget
Practice mindfulness and meditation at home. Find free or low-cost resources like apps, books, or community programs. Mental health is just as important as physical health. By prioritizing mental health, you can reduce stress and improve overall well-being without spending a lot of money.
Healthy Living Without Breaking the Bank
Focus on a balanced diet with affordable, nutrient-rich foods. Plan your meals and snacks to avoid impulse purchases. Eating healthy doesn’t have to be expensive. With careful planning, you can maintain a nutritious diet while sticking to your budget.
Frugal Living with Family
Teaching Kids About Money
Teach children the value of money and the importance of saving. Involve them in budgeting and shopping to help them understand the concept of frugal living. Teaching kids about money early on can set them up for a lifetime of financial success.
This might include setting up a chore chart and paying them for certain things. It might also include incentivizing them to get good grades by giving them rewards. This will teach them to be self-sufficient, which will help them in the future.
Family Activities on a Budget
Look for free or low-cost activities for family fun. Enjoy parks, community events, or DIY projects at home. Family time doesn’t have to be expensive. With a little creativity, you can find plenty of budget-friendly activities to enjoy together.
Many of my friends and I always talk about how we don’t spend money when we go out. We do things that are free and keep ourselves busy. The only time we spend money is when we go out to eat.
Planning Affordable Vacations
Plan your vacation in advance to save money on flights and accommodations. Consider off-peak travel or budget-friendly destinations like beaches or hikes.
One of the best ways I travel on a budget is through one-bag travel. This is where you try to fit 3 to 7 days’ worth of outfits in one personal bag, not a carry-on. By doing this, I am able to save on baggage fees and travel lighter.
Use travel deal websites and apps to find discounts on flights, hotels, and activities. I also find that traveling on a Tuesday or Thursday allows me to get flights for even cheaper.
Saving Money on Transportation
Use public transportation or walk/bike instead of driving. Carpool or use ride-sharing services to reduce costs. These options are often cheaper and more environmentally friendly than owning and maintaining a car.
Free or Low-Cost Travel Activities
Research free or low-cost activities like hiking or visiting local museums. Use online resources to find deals and discounts on attractions.
Many destinations offer free events, parks, and cultural sites that provide rich experiences without breaking the bank. There are so many community-involved events that are not only free but fun, and it is up to you to find them.
Managing Your Finances
Saving Money on Insurance
Shop around for insurance quotes to find the best rates. Consider bundling policies or increasing your deductible. Regularly reviewing your insurance policies can help you find better deals and save money on coverage.
Frugal Cell Phone Plans
Consider a prepaid or low-cost cell phone plan. Use a phone with a long battery life to reduce data usage.
Many carriers offer affordable plans with essential features, allowing you to cut costs without sacrificing service. Sometimes it is even beneficial to call your cell phone provider and ask them to reduce your rate, as negotiating your cell phone plan is a possibility.
Building an Emergency Fund
Save 3-6 months’ worth of expenses in an easily accessible savings account. Use this fund to avoid going into debt when unexpected expenses arise.
This is probably the most important tip on this list, as the majority of Americans don’t even have emergency funds, and the problem arises when that once-in-a-lifetime event occurs.
Whether it’s a car crash, injury, or being fired from work, if you do not have an emergency fund, you will end up utilizing a credit card, meaning more debt, fees, and interest.
Automate your savings to ensure you consistently build your emergency fund.
Frugal Debt Management
Consolidating Debt to Save Money
Consolidate high-interest debt into a lower-interest loan or credit card. Consider a balance transfer or debt consolidation program.
This strategy can lower your interest rates, reduce monthly payments, and help you pay off debt faster. It’s important to keep in mind the interest rate that you’re getting when you decide to consolidate your debt. Make sure to shop for the lowest interest rate you can find.
Refinancing Loans for Better Rates
Refinance high-interest loans or credit cards to lower your monthly payments. Consider refinancing your mortgage or student loans. Lower interest rates can save you a significant amount of money over the life of the loan.
A lot of people never think about this because it’s been years since they got a loan, but refinancing can be pricey as an upfront cost. However, over time, with the lower interest rate, you will actually save more money. That’s free money, and who wouldn’t like that?
Disputing Unfair Medical Bills
Review your medical bills carefully to identify errors or overcharges. Dispute any unfair or incorrect charges with your provider. Many medical bills contain mistakes, and challenging them can save you money. Sometimes asking for an itemized view of the entire bill is enough.
Frugal Credit Management
Building Credit Fast
Make on-time payments and keep your credit utilization ratio low. Consider a secured credit card or credit-builder loan. These strategies can help you build or rebuild your credit score efficiently.
Building your credit fast means you can leverage your interest rate and get lower rates than most people because you’re a trusted citizen who knows how to manage money.
Repairing Damaged Credit
Review your credit report to identify errors or negative marks. Dispute any errors or work to resolve outstanding debts. Regularly checking your credit report ensures accuracy and helps you address issues promptly.
Sometimes you can repair your damaged credit by giving them a call. I remember I made a late payment once and was able to quickly resolve the issue by calling in and stating the state of emergency I was in.
Monitoring Your Credit Score
Check your credit score regularly to track your progress. Use a credit monitoring service or app to stay informed. Monitoring your credit helps you stay on top of your credit health and spot potential issues early.
Frugal Investing for the Future
Auto-Investing for Beginners
Start investing with a small amount of money each month. Use a robo-advisor or micro-investing app to get started. These tools make investing accessible and manageable, even with limited funds.
High-Yield Savings Accounts
Open a high-yield savings account to earn interest on your savings. Consider a savings account with a sign-up bonus or rewards program. High-yield accounts offer better returns than traditional savings accounts, helping your money grow faster.
Earning Passive Income
Invest in dividend-paying stocks or a peer-to-peer lending platform. Create a passive income stream through online sales or affiliate marketing. Passive income can supplement your earnings, providing financial stability and growth.
Additional Tips
Choose Quality Over Quantity
Invest in high-quality items that last longer, reducing the need for frequent replacements.
Prioritize Value Over Price
Focus on the value and utility of purchases rather than just the price tag.
Use Credit Wisely
Avoid high-interest debt and use credit cards responsibly to build a positive credit history.
Declutter Regularly
Keep your living space organized and free of unnecessary items to save money and reduce stress.
Use a Budget to Guide Your Spending
Stick to a budget to prevent overspending and ensure your money aligns with your priorities.
Know the Difference Between Wants and Needs
Distinguish between essential needs and non-essential wants to control your spending.
Be a Savvy Consumer
Research and compare prices before purchasing to ensure you get the best deal.
Prioritize Your Values
Align your spending with your values and goals, focusing on what truly matters.
Audit Your Spending and Bills Annually
Review your expenses and bills regularly to identify savings opportunities and eliminate unnecessary costs.
Create Boundaries for Yourself
Set limits on non-essential spending to maintain financial discipline and prevent impulse purchases.