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25 Frugal Living Tips That Will Save You Thousands

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Frugal living is not about being cheap. It’s about getting the best out of your hard-earned dollars

So much of the money we go through is spent in areas we don’t even think about. Restaurant meals, pub drinks, interest payments, and routine gifts all drain our bank accounts and make us feel both poorer and richer than we really are. We feel richer because we feel like we can afford these little luxuries. We feel poorer because, when we get a look at our accounts at the end of the month, we wonder where all of our money’s gone.

Continue reading below to find out some of our best frugal living tips and how to make your money go further.

What Does Frugal Living Mean?

Frugal living is all about maximizing the resources you have so that you can squeeze the most enjoyment and utility out of your money. Frugal living entails a number of things, including:

  • Maximizing the money coming in
  • Minimizing the money going out
  • Prioritizing where you spend your money
  • Cutting out expenses that aren’t useful 

Done correctly, frugal living can ensure that you live within your means and that you enjoy all that life has to offer.

Difference Between Frugal and Cheap

Being frugal is not the same thing as being cheap. We define the latter as a state of mind in which you’re unwilling to spend money at all, even when you actually can afford it, and the purchase would bring you happiness or utility.

Cheap people are the ones who don’t buy their moms flowers on Mother’s Day because they’re too expensive. Frugal people are the ones who still buy the flowers, but find a good deal on them first.

Benefits of Living a Frugal Life

There are many benefits to living a frugal life. They include:

  • Increased discretionary income to spend on things you enjoy
  • Greater financial security
  • Greater mental wellbeing
  • Increased pleasure from the things you spend your money on

Those aren’t the only benefits, but the list should give you an idea of what you can  enjoy when you start living frugally.

Basic Tips to Starting a Frugal Life

There are a few basic strategies to living a frugal life. None of the following tips are truly groundbreaking, and they’ve all been discussed before. But they’re absolutely fundamental to getting your finances on track.

Start a budget and stick to it

Before you do anything else, you’ll need to create a budget that you’re actually going to stick to. Think of your budget as a frugal-living blueprint or map. It will guide you as you construct a financial framework that will allow you to live within your means.

When you’re creating your plan, make sure that you take a brutally realistic view of your finances. Don’t overestimate your income. Don’t underestimate your expenses. One of the keys to budgeting well is to use your past behavior as a guide — not your current intentions.  We all tend to do what we did before, so if you’ve always spent $500 per month at restaurants, you should be ready for the possibility that the behavior will continue into the future.

Of course, that doesn’t mean that you can’t change your behaviors. In fact, changing behavior is one of the key reasons to write up a budget. We’re just saying that you should be aware of the fact that habits can be hard to change.

Track your income and expenses

Once you have your budget ready, prepare to track every dollar coming in and going out of your accounts. There are a number of different ways to do this. Some people prefer the “receipts in a shoebox” method. Others keep an Excel spreadsheet. Still others use one of the many fantastic apps that are currently available, including: 

Any of these software options will allow you to easily keep track of all of the money flowing into and out of your bank. You can link your credit and debit cards to the software for automated tracking.

Cut unnecessary subscriptions, memberships, and recurring fees

If you pay any attention at all to the expenses being charged to your accounts, you have probably noticed a bunch of recurring fees. Cable or satellite TV, internet, high-priced phone plans, streaming services, digital newspapers, and the like can all make a huge dent in your net income.

Take an axe to your subscriptions, memberships, and fees. We’re not suggesting that you eliminate all of your monthly expenses. Some likely bring great value. Instead, we’re suggesting that you consider each one and decide if they’re worth the money that you’re paying.

Once you’ve eliminated any overpriced subscriptions, consider whether you can reduce the amount you’re paying for the services you intend to keep. Call each service provider and see if they offer any discounts, loyalty programs, or price reductions for long-time members. Are you a student? They may offer student discounts.

If the thought of haggling with customer service associates and supervisors makes you squeamish, there are excellent services that will let you delegate the task of reducing your monthly subscription and service fees. They include:

Rocket Money homepage

See Also: 15 Smart Financial Goals Everyone Should Have

All of these companies will haggle to try and reduce the price you pay every month for subscriptions, memberships, and services every month. In return, they’ll take a significant portion of the money they save you (between 30% and 40%).

Pay off debt

If you take away only one tip from this article, it should be this: pay off your debt. Debt reduction is the single most important part of living frugally. That’s for one simple reason: interest.

Depending on your interest rates, you could be paying hundreds or even thousands of dollars worth of interest to your lenders every month — an amount usually far more than the risk-adjusted return you could get from any investments.

For most people, paying off debt should be priority number one. There are two major methods for doing this: the avalanche method and the snowball method. With each method, the first step is to reduce your monthly payments on all outstanding loans to zero. (Don’t worry, that’s just the first step). Once you’ve done this, the strategies change.

With the snowball method, you pick your smallest loan and pay off as much as you can on that loan each month. Once that loan is paid, you contribute as much as you can to your next smallest loan, and continue this process with each of your loans through the last largest loan. This approach has the benefit of providing quick wins in the form of paying off your smallest loans first.

The avalanche method is, mathematically, the most optimal choice.  You rank all of your debts by the interest rate (highest rate first, lowest rate last). Then, you pay off as much as you can of your highest rate loan each month. Once that debt is paid, you move on to the next highest interest rate. This method minimizes the amount of interest you pay over time.


See Also: What Are Dave Ramsey’s Baby Steps, and Do They Work?

Have an emergency fund

Almost as important as paying off debt is an emergency fund. Most financial gurus suggest having between three and six months worth of expenses saved up in a rainy day fund.

This reserve fund will allow you to keep from going into debt should something unexpected occur (a layoff, an injury, illness, etc.).

Reduce bank fees

 Bank fees are another form of monthly expense that can often be avoided. There are a number of ways to do this:

  • Check what accounts your bank offers and choose the account(s) with the lowest fee options.
  • Call your bank and try to negotiate fee waivers (either permanent or temporary).
  • Make sure to stay within the service limits of your accounts to avoid incurring extra fees.

Refinance your debt

Refinancing debt can be an excellent option in certain circumstances. Generally, if any of the following criteria apply to you, then you may want to look into refinancing:

  • Interest rates have dramatically decreased since you first took out the loan.
  • Your credit score has dramatically increased since you first took out the loan.
  • You’ve found a person willing to act as a guarantor for the loan.
  • You’ve obtained property you could use to secure the loan.

The idea behind refinancing is that your interest rate will be recalculated in response to a substantial increase or decrease in the risk you pose to the lender.

Pro Tip: Check your credit score with Credit Karma (USA) or Borrowell (Canada). If you notice that it has increased significantly, talk to your lenders about the possibility of refinancing your debt.

Sell unnecessary things

Do you have things that you don’t need, use, or want? Sell them! There are companies out there that will buy your gently used personal property. You won’t get a fantastic price for most of your stuff, but something is better than nothing. You could consider selling:

  • Clothing: A website called Poshmark will accept your good-quality used clothing, and pay you a small amount for it. More expensive brands and more current clothing fetch a higher price, so make sure to go through your closet and send them that Gucci belt you bought on impulse and never wear.
  • Electronics: A website called Decluttr sells gently used cell phones, tablets, and other electronics. The newer the product and the better its condition, the more you’ll get paid. Check out our full Decluttr review to learn more.
How to Make Money Selling Stuff with Decluttr

See Also: How to Get Rich The Right Way: A Legitimate Strategy

Frugal Food Tips

Something we all spend money on is food. Being smart about your food spending is one of the best ways to cut out unnecessary financial waste.

Meal planning

One of the most common causes of excessive monthly restaurant or takeout purchases is a lack of meal planning. Most people don’t like planning meals — and anything that makes it easier, as far as we’re concerned, is a welcome addition to households.

That’s why we love the $5 Meal Plan. For just five dollars per month, these kind folks will send you a weekly meal plan with inexpensive, delicious, and easy-to-make meals. It takes the planning and guesswork out of deciding what to eat for the week, and makes it much less likely that you’ll settle on something from UberEats. Give it a try!

Use coupons

Coupons can be a great thing. While you can rely on the paper coupons mailed to you by your favorite stores each month, you can also take couponing online by using apps like Swagbucks and BeFrugal. Services like these will let you access online coupons that you can use in-store.

Opt for store brands or generic brands

Generics and store brands are a fantastic way to reduce your grocery bills. Many store brands are up to 50% less than their name-brand competitors. Virtually every major grocery chain has its own store-brands, and even if the store you shop at doesn’t have one, they likely carry generic brand products at a significant discount compared to name-brand products. 

Use rewards and cash back cards

When you’re doing your grocery shopping, try as much as possible to stack rewards, loyalty points, and cash back. The trick here is to use multiple services and cards when you go grocery shopping to take advantage of multiple programs.

For example, when you go shopping, you could use your store loyalty program, a cash back program like Rakuten or Ibotta, a couponing program like Checkout 51, and your credit card rewards program to quadruple-stack rewards.

Brew coffee at home

This is a really simple tip. Coffee from cafes is expensive compared to brewing it at home. (Home-brewed coffee is a fraction of the cost of coffee purchased from places like Starbucks). So buy a tin or bag of your favorite coffee and make it at home to save significant cash!

Buy in bulk

Bulk stores are a tremendous opportunity to save money. The price per unit of most kinds of food and other basics is often (but not always) lowest at bulk stores. And beware of the bulk trap. Some people tend to buy more than they need, creating higher grocery bills. As long as you’re aware of this risk, bulk stores can be one of the best ways to save money on your groceries.

Frugal Living Buy in Bulk

See Also: 13 Legitimate Ways to Earn Discounted and Free Gas

Frugal Home Tips

There are great ways to save money on your utilities as well.

Use a thermostat to save on energy bills

Intelligent use of heating and air conditioning can save you significant amounts of money. The best way to do this is to make judicious use of your thermostat.

If you want to go the extra mile,  get a smart thermostat. Smart thermostats can be set to activate when you leave home or come home. They can be programmed with complex weekly routines to minimize the amount of heating and air conditioning used.

The Nest Learning Thermostat by Google is one of our favorite one. It’s reliable and it looks great too.

Replace cable TV

These days, cable TV is one of the least necessary expenses for many of us. Between free online sources, streaming services, and other alternatives to cable and satellite, there has never been a bigger set of options available to people seeking at-home entertainment.

If you’re still paying high cable or satellite bills, strongly consider one of the many low-cost alternatives to live TV.

Use energy-efficient light bulbs

This one’s a no-brainer. Modern LED bulbs are much more efficient than the old-school filament light bulbs. They last much longer as well. Replace all the lighting sources in your home with new, energy-efficient alternatives.

The Philips Hue LED bulb works like a charm. You can even integrate it with your Alexa or Google Assistant.

Downsize your home

This is a major change but it’s one worth considering. Many people live in homes that are far larger than what they and their families actually use.  It’s always worth considering whether it might be wise to downsize (or at least refrain from upsizing) your home.

Compare insurance providers

Insurance is a big expense for a lot of people. So even a small percentage drop in monthly or annual premiums can represent major savings.  Take a close look at the auto, home, medical, and other insurance policies you’re paying for. Shop around. Can you find a better deal? 

Frugal Entertainment Tips

We all know that some forms of entertainment are more expensive than others. A night out at the casino is going to hit your pocketbook much harder than a night in watching Netflix. So what are some things you can do to have fun and keep things frugal?

Enjoy family game night

A family game night is a great way to stick to a budget. Board games are usually very affordable.  For the price of a home-cooked meal and a few snacks you can get a full evening’s worth of entertainment for you and your family. 

Have people over (avoid going out as much)

Here at The Modest Wallet, we’re huge fans of having people over. It’s way cheaper than going out to a bar, club, or restaurant, and it’s just as socially fulfilling. If you aren’t able to go out (e,g., car is in the shop, work schedule, global pandemic), then FaceTime with friends is another option.

If you’re looking to hang out with like-minded people. The Modest Wallet Community Facebook Group connects like-minded savers who want to support and help one another achieve their financial goals.

The Modest Wallet Facebook Group

Other Frugal Tips to Live a Happier Life

There are plenty of other great ways to achieve and maintain frugality. Continue reading below for our final few tips on how to save money without giving up the things you love in life.

Automate your savings and  investments

A huge part of living frugally is putting your new behaviors on autopilot. One of the best ways to do this is to use a service like Acorns, which automates saving and investing money.

To the extent that works for you, try to schedule regular deposits to your investment and savings accounts to ensure that you “pay yourself first.”

Use ride-sharing services

Ride-sharing services aren’t necessarily cheaper if you drive your own car, but if you use them instead of buying a car and paying the associated insurance, registration, and licensing costs, the savings can be substantial.

If you live in a major urban center and you can envision yourself getting by without a car, strongly consider doing so. You’ll save a ton of money, and the environment will thank you.

Buy used stuff and fix things

There’s an alternative to buying everything brand-new and replacing your items at the first sign of trouble. Consider buying used products whenever possible (just make sure that you’re getting good quality stuff). If you can, try to fix things when they break instead of rushing out to buy something new.

Earn more with a side gig

When you make more, you can save more. That’s a pretty basic proposition, but it holds true for everyone. You probably already have a regular job. But have you considered taking up a side gig? With the growth of the gig economy on the internet, side gigs have become more lucrative than ever.

Our favorite side gigs are those that take a fairly small amount of time and reward you for the skills you already have. Which skills those are depend on what you’re good at. One of the best ways to find a good side gig is to think about what you enjoy doing. 

If you read and write a lot, try freelance writing. If you spend all of your time creating videos, try starting a YouTube channel. If you mess around with code, try being a freelance programmer.

Become a tutor

If you’re looking for a fun way to make some extra cash, consider online tutoring. Services like VIPKid will match qualified adults with pupils who need some extra help.

Become a freelance writer

Some side gigs are definitely more lucrative than others. These days, writing, programming, and digital marketing are huge growth areas — and almost anyone can learn them.

You may need to develop your skills in order to be competitive in these online markets. With respect to freelance writing, our favorite course is the Earn More Writing School. Like the Facebook Ads course mentioned a bit later on in this article, there’s no fluff in this online class. It gets straight to the point and will help you increase your earnings in less than 30 days.

Run Facebook Ads for local businesses

Earlier, we mentioned that digital marketing is huge right now. One of its best sub-niches is Facebook advertising. Service businesses love Facebook Ads because they can use them to micro-target small local populations with custom ads.

Don’t worry if you have no idea how to use Facebook Ads. Our favorite online course is the FB Side Hustle Course. It’s a fast, no-nonsense online course that’ll teach you how to go from a complete newbie to a Facebook Ads master in no time flat.

The FB Side Hustle Course - Laptop Empires

See Also: Why Am I Poor? Simple Hacks to Stop Being Broke

Become a freelance proofreader

On a closely related note, the online proofreading niche has exploded over the last couple of years. The Proofread Anywhere class will assist you in getting up to speed with this accessible, yet extremely lucrative skill. They even offer a free seminar to help you learn more about the industry.

Take paid online surveys

If you’re looking to just make a few extra bucks in your downtime, consider answering paid online surveys. You won’t make a fortune, but it’s more profitable than sitting around and watching Netflix while you’re off work.

Start a blog

Developing an online audience can be extremely profitable. One of the best ways to do this is to start a blog. There are a key factor to launching a successful blog:

You need to pick a niche in which you have authority. In other words, pick a subject that you think people would want to read about, and in which you have a combination of experience and education. For example, if you’re a volunteer firefighter, you might want to write about that. If you’re a parent of three children and also run your own business, try writing about that.

Become a Pinterest VA

Becoming a Pinterest virtual assistant can be one of the most fulfilling decisions you’ve ever made.  As far as side hustles go, this is one of the most profitable, flexible, and interesting jobs available. Even if you have no idea where to begin, this online course will show you the ropes at lightning speed.

Start a bookkeeping business

Huge numbers of professional firms require bookkeepers. It’s an in-demand skill that provides large amounts of value to businesses — everywhere. Luckily, the skill is also reasonably straightforward to learn. This online course will get you up to speed without any of the unnecessary fluff that many online courses use to pad their materials.

Frugal Living Downsides

There are some  downsides to living frugally. You won’t get to enjoy as many luxuries if you commit to a frugal lifestyle.  And you’ll need to be more careful about how and where you spend your money. But we think the downsides are worth it. 

Finally, we should note that living frugally can only take you so far. At the end of the day, you’ll need to maximize your income as well as minimize your spending in order to have the biggest possible impact on your finances. So don’t forget to ramp up your earning potential as you tighten your belt.

Final Thoughts

There’s more than one way to be frugal. If you want to go this route, you’ll need to watch your spending, track your income and expenses, make wise choices, defer gratification, and maximize your income. But if you only do just a few of the things we’ve outlined above, you’ll be well on your way to improving your personal finances.