When you think of frugal living, what image comes to mind? Is it that of a penny-saving miser or of someone who finds ways to cut back expenses and save with a purpose?
Frugality isn’t just about the act of saving money. It’s also about controlling your spending to afford the things that matter most to you.
Being frugal is about managing trade-offs in your budget. Not just cutting back expenses.
In this article, we discuss what it means to live frugally, some of the benefits of frugal living and tips that will help you reduce expenses. Want to skip ahead? Here are our 15 frugal tips to save money:
- Review monthly bills for ways to save
- Plan your food purchases
- Lower your credit card rate
- Take advantage of coupons
- Consolidate debt
- Automate your important frugal living goals
- Get rewarded when you buy
- Take advantage of free entertainment
- Sell items you don’t need
- Own fewer but useful items
- Buy pre-owned
- Move to a less expensive area
- Increase your insurance deductibles
- Save on electricity
What’s frugal living?
Frugal living is about managing trade-offs in your budget. You still focus on living a quality life, but do so by spending your money wisely. Frugality is not about depriving yourself. It’s more about spending on the things that are important to you and cutting back elsewhere – making a little money go a long way.
Some people may place a higher value on the quality of their food, for example, while others may get more joy on being able to go on holidays. Perhaps having nice clothes is important to some, but not at all important to others.
So your approach to frugality will be as unique as your own values. Figuring out which things are worth more to you can help you decide where to cut back more in your budget.
Benefits of frugal living
Adopting a frugal lifestyle allows you to free up money to achieve those goals that are most important to you. It can help you:
- Feel less stressed about money because you’re able to build an emergency fund
- Live within your means and help you get out of credit card debt
- Invest more to afford an early retirement
- Save more to achieve your financial goals faster
- Afford small luxuries that improve your quality of life
Get started on your frugal living path and see how much you’re spending each month. The following tips will help you find ways to cut your budget and reduce expenses.
15 Frugal living ways to save money on monthly expenses
The following tips will show you ways to cut back expenses and apply frugality to your daily life. These ideas are all about how to save money consistently. And with consistency, you can save large amounts of money over time.
Review monthly bills for ways to save
Start getting into the frugal mindset by reviewing all your recurring monthly bills. The more you can cut back these expenses, the more you’ll be able to save every month. You can then assign these savings to other, more important items in your budget.
Here’s several frugal tips to save on household expenses:
» Eliminate subscriptions. Magazines and newspapers you hardly read are prime candidates to cut from your budget and save. Cancel them when they’re up for renewal.
» Cut the cord. Streaming, digital TV antennas, apps and other digital services now make it easier than ever to watch TV without cable – even for free. Cutting the cord or switching to a cheaper plan will help you trim your budget and save money.
» Lower your phone bill. One way you can save a nice amount of money every month is by switching your mobile service to an affordable cell phone plan.
Plan your food purchases
Planning your food purchases is a good way to start saving money on groceries. It starts with a simple question: what are you eating next week? To come up with an answer, you need a meal plan.
A weekly meal plan lists your meals for the week ahead and helps you plan your food purchases. Having a meal plan can reduce your trips to the grocery store and lower your grocery bill by helping you avoid last-minute, impulse purchases you hadn’t planned.
Stick to family favorites first, like mac’n cheese, and later remake your recipes for healthier eating.
Lower your credit card rate
If you’re carrying a credit card balance, and have been using credit responsibly, consider a balance transfer to a credit card with a lower introductory rate.
If you’re approved, any promotional rate will last for a minimum of 6 months. But the best balance transfer credit cards will offer longer promotional rates, helping you save money.
Take advantage of coupons
Coupons and coupon apps can help you lower your grocery bill by a few dollars here and there on every grocery trip. But over time, those modest savings can add up very quickly.
Search for coupon codes on your more expensive purchases, and consider buying your high-frequency items in bulk.
Paying high interest on credit card debt takes money away from the things that are important to you. Especially if you’re using multiple cards. With a personal loan, you may be able to consolidate several payments into a single, affordable one.
To find out if this frugal living tip will save you money, check out a few personal loan offers to get an idea of the terms available to you. Then use a simple payoff calculator to come up with your potential savings.
Paying off expensive credit card debt can free up precious cash from your monthly budget and help you get out of debt sooner.
Automate your important frugal living goals
Adopting frugality will be more meaningful to you if you set specific goals for the money you save. Maybe you’re looking to save for a family trip, pay off your credit card debt, or build your retirement nest egg.
Regardless of the goal, it’ll be easier to reach it if you don’t have to think too much about how it gets funded. Automate it by setting up a recurring transfer from your checking account to your savings account.
Get rewarded when you buy
Sometimes, we pay with credit cards without giving it much thought: you fill up the tank, get groceries, buy some clothes. The money goes out and none of it comes back. But you can change that.
With a cash back rewards credit card, you can get up to 5% cash back on certain categories. And it’s possible to get a decent amount of money back over time.
Rewards cards require good credit. If you’re still working on yours, a secured credit card can help you build credit.
Take advantage of free entertainment
Your entertainment doesn’t have to cost much these days; in fact, some of it can be enjoyed for free.
» Rediscover your library. Your local library is a great source of frugal entertainment. Take advantage of it and borrow books, DVDs or magazines. These days, you can download content from your library’s digital collection without leaving the comfort of your home.
» Watch free TV. There’s multiple ways to watch free TV without cable or satellite. From free streaming apps to digital television antennas, there’s plenty of cheap ways you can cut your budget. You’ll be saving money every month without giving up watching TV.
Prices can vary for all types of products, which is why it makes sense to comparison-shop before you buy, especially with high-frequency and expensive items.
For high frequency items, like groceries, compare the prices of 10-15 products you often buy with the retailers in your area. Even if you only find relatively small savings, this frugal tip can save you $100’s over the long run.
With more expensive purchases, compare not only across stores, but also across brands. Pay attention to the features that are important to you and avoid paying for those that aren’t.
Sell items you don’t need
Decluttering your home can help you feel more organized and find items you can sell. Maybe you have some clothes, furniture or collectibles you no longer use or want.
Own fewer but useful items
Frugal living doesn’t mean that you have to develop a stingy quality. Rather than buying on price, frugal people buy based on value and convenience. Their purchases add to their quality of life.
It’s less about cluttering your life with knick-knacks and more about owning convenient, lasting items that you’ll use time and again.
Take a look around your home and notice the items you use most. Those are the types of purchases you want to repeat. As for the other items, it’s best to avoid them. When you’re frugal, less is more.
You can find high quality goods at reduced prices by buying them second-hand. Frugal shoppers know that many “just like new” items, such as clothes, still look great and can save you money.
But buying pre-owned isn’t just for clothes and accessories. Many things lose a large percentage of their value even after just one year. And that can amount to big savings for a savvy buyer.
Take cars, for example. According to the Kelly Blue Book, you can purchase last year’s model car for only 80 percent or so of the price when brand new. You could pocket thousands in savings just by buying last year’s model.
Move to a less expensive area
Moving to a less expensive area doesn’t necessarily mean downsizing. Especially if you own your home and have built some equity.
If you have equity in your existing home, consider relocating to a cheaper area. You might be able to afford more space with a smaller mortgage. And given the current rate environment, that could translate into hundreds of dollars in savings every month.
If you rent, check out sites like Trulia and Zillow to research comparable places that rent for less. Include the cost of movers and any required security deposit when you do your comparison.
Increase your insurance deductibles
Most insurance policies have a trade-off between the cost of your premium and your deductible amount. Call your insurance company and check how your premium would change if you were to increase your deductible.
You may be able to lower your current premium – and save every month – by raising your deductible.
Save on electricity
A smart thermostat can save you on your heating and cooling bills. It saves energy by not running the heat or the AC when you don’t need them. Features like flexible scheduling, for example, help you save energy when you’re away.
Another way to save on your electricity bill is by switching your incandescent light bulbs to LED lights. While LEDs are more expensive, they run on less electricity reducing your energy bill. LED’s also last longer: an average of 25,000 hours versus 1,200 for incandescent lights.
Living frugally doesn’t have to be difficult. Frugality is not about depriving yourself; it’s about controlling your spending and making trade-offs so you can have the things that are more important to you.
Some of these frugal tips will be more applicable to your circumstances than others. So try a few, use what works and skip what doesn’t.