Frugal Living 101: How Real People Are Living The Frugal Lifestyle And How You Can Too
By Bethany McCamish
March 2, 2022
Frugal living: It’s a buzzword dipped in wholesome but smells a bit like Ebeneezer Scrooge. That’s because frugal is often associated with its close cousin: cheap. Frugal living isn’t about being cheap, it’s about being resourceful and intentional with the money you’re given. It’s a privileged lifestyle choice that can help you meet financial goals and some say, live a more fulfilled life.
In general, frugal living is a lifestyle that focuses on saving where you can and spending only on what adds value to your life.Frugal living is connected to major lifestyle choices like minimalism, homesteading, and retiring early. You may also hear about frugal living from debt-free communities who are supporting those trying to eliminate their debt once and for all.
The frugal lifestyle has these three common characteristics
There are many ways to approach frugal living, but these three characteristics create a framework for this lifestyle.
It’s no secret that the U.S. has a consumerist culture. This is even more present with our phones pinging us about sales and being bombarded with ads every time we scroll through social media. “Keeping Up with the Joneses” used to be about what your neighbors had down the street. Now, it’s about keeping up with everyone — your neighbors, your friends on Instagram, and even millionaire celebrities. The latest iPhone, a new car or that slick $200 bomber jacket are grabbing money from your payday fast.Frugal living is about saying no to societal expectations about what is cool or on-trend. It’s about driving an old used car or buying your clothes second hand. It’s a lifestyle that asks you to be comfortable stepping out of the consumerist cycle and saying no.
2. Finding value in every dollar that leaves your account
If you’re pushing aside what the talented marketers are telling you to buy, then you’re leaving money in your account. This money needs a purpose and a value assigned to it.Frugal living asks that your money only goes towards what you and your family value. This could be a vacation instead of a monthly cable subscription. Maybe it’s a new car paid for in cash instead of taking on an auto loan. You’re shifting your mindset to exchange your dollar for something that brings you value.
3. Remaining conscious about needs versus wants
The last characteristic of a frugal lifestyle is about examining spending practices on a regular basis and exercising restraint. Money should be allocated for “needs” first. Things like housing, transportation, and food.“Wants” might be things that bring you value, like that spa trip. That being said, “wants” should be saved for and planned. Frugal living means holding back on buying “wants” immediately. This gives you time to decide if you actually want it or if you were saying “yes” to a societal expectation.
Frugal Living Tips From Those Living It
If frugal living still sounds like living with less and hunting for happiness, think again. There is a large community thriving by choosing a frugal lifestyle. We talked with real people all around the country who make conscious choices every day with their money and time so they can reap the benefits of a frugal lifestyle.
Ditch the car upgrades
Jackie Beck, a debt expert, has driven the same car for 29 years and counting. She bought her 1990 Mazda Miata used in 1991 and the car is still going.“I estimate driving the same car for all those years has saved me a small fortune — likely around $149,000,” Beck told us. “That $149,000 is compared to what I would have spent over the years if I’d replaced it every five years like many people do.”Beck says there is no point upgrading if what you have works well. “I originally bought the car because I loved it, and essentially kept it for the same reason,” she shared. “At one point early on I considered replacing it with a BMW Z3, but came to my senses and decided there was no point in changing it for a more expensive, costlier-to-repair version of the same thing. The Miata is a great car!”Beck says that the frugal lifestyle choices she makes helped her pay off $147,000 of debt. She also says that her frugal choices never left her discontent. “Most of my frugal choices have been because I really love something, like my car, comfortable clothes, where we live. So being content and happy with what you have is beneficial emotionally as well.”
Downsize to a one-car household
“My wife and I own one used car between the both of us,” Kyle Kroeger, owner of FinancialWolves.com shares. Kroeger uses public transportation or his bike to get to work as often as possible. He says, “By having one used car, we pay very low insurance premiums and are able to pay for the car in cash, so it’s a very limited burden to our ongoing budget.”A one-car household is a common way to implement frugal living. Holly Johnson, the founder of Club Thrifty, says that she has shared a car with her husband for the past five years. “Sharing a car has helped us save considerable sums of money since we only pay for gas, maintenance, and repairs on a single vehicle, and we only have money ‘tied up’ in one car as well,” Johnson shared.When Johnson and her husband were first married, they had two car payments that took $800 out of their income every month. Getting rid of this car payment freed up money to put towards what they value. “Debt-free living equals true freedom in our eyes, even if we don’t always have the nicest or most expensive stuff,” Johnson said.Now, Johnson only buys cars they can afford. “It’s considerably easier to save more money and invest in the future when you’re not saddled with a $400 plus car payment every month. Our 2018 Chevy Traverse cost $26,200, which we saved for and paid for upfront,” Johnson said.
Rethink how much energy you use
The US Department of Energy estimates that each person spends about $3,052 on energy annually. This can be drastically reduced if you rethink your utilities. You can aim to be more energy efficient by replacing light bulbs with LEDs and unplugging appliances when they aren’t in use. You can also turn down your AC and heat like Jerry Brown from Peerless Money Mentor. “One way I live frugally is by not running the AC or heater,” he told us. “Although I live with a sibling, I have placed a lock on the thermostat. The only time I run it is when I invite friends or family over,” Brown said.If this seems extreme, we get it. But Brown saves some serious cash by doing this. “My bill for the past six months has been incredibly cheap,” he shared. “On average, it is about $50 a month. And this is for a four-bedroom, two bath home.” That’s about $600 a year for heating and cooling. Angela Rozmyn, the blogger at Tread Lightly, Retire Early hang dries all her laundry. Rozmyn makes frugal choices for both the money savings and the environment. She says, “My favorite energy saving, money saving chore is hang drying our laundry. Not only does it save on our utility bill, but it also extends the life of our clothing. You know that lint in your dryer? That used to be part of your clothes!”
Shop second-hand stores for clothing
Check out local thrift stores. This can be an easy and impactful way to start dabbling in the frugal lifestyle.“When my wife and I became parents, my wife bought a lot of second-hand kid’s clothes at yard sales and consignment shops because the kids grow out of everything so quickly,” Marc Andre, owner of Vital Dollar shared. “She saved so much money on clothes for the kids that we started buying second-hand clothes for ourselves too. We save a huge amount of money and the clothes we’ve bought are almost new, and in some cases, they’ve actually never been worn.” Not only can you save money on clothes, but you can make some money too. Consignment shops are a great place to sell items of yours that you no longer want.Daniella Flores founder of I Like to Dabble says, “It’s such a great service to have both a place you can buy a dress from for $5 and at the same time contribute back to that place with our own old things that aren’t of use to you anymore. We just took a load of old purses and clothes again last weekend and made a random $33. It makes me feel like I am contributing to a part of the community and that’s who’s getting my money, not some big corporation.”Julien Saunders, blogger at Rich & Regular, sums up the value found in second-hand shopping beyond money: “We’re not interested in purchasing and repurchasing items every year, so we aim to keep a limited but high-quality wardrobe. This is done more so out of a desire to simplify our lives but we’re certainly mindful of the environment and our exposure to systems [retail, malls, department stores] that are designed to trigger impulse spending,” he says.
Change your diet and save money on groceries
Simple and easy meal plans seem to be a staple in the frugal lifestyle. Tom Blake, a finance writer, says he changed his diet in college to a lean and regimented meal plan that still offered him nutrition. “Living by a simplistic diet allowed me to shop in bulk at wholesale stores,” he shared. “Additionally, by cooking simple meals in mass quantities, I was able to freeze my food and resist the urge to eat out. Shopping in this manner significantly cut down on my grocery bill per semester, probably by about 30% compared to a normal student’s budget, and I was eating full meals too.”
Shop at the less expensive grocery stores
The fancy grocery store might have the best olive tapenade and better paper bags, but if you can put that aside, you’ll save money by shopping at a regular grocery store. Jarek Grochal, a writer for Time in the Market says, “We used to shop at a variety of grocery stores including Whole Foods. However, we felt like the higher expenses just didn’t bring a ton of value to our life. Luckily, the spread of lower cost but high-quality retailers like Aldi’s or Trader Joe’s made it easy for us to switch and save money.” Grochal says he doesn’t feel like he is sacrificing anything. He gets the same quality ingredients, but maybe only two brands of ketchup instead of twelve.
Treat dining out like a real treat
Dining out can quickly become an expensive habit instead of a luxury, something those practicing frugal living know all too well.Kate Horrell, a financial educator for military families, says she and her family rarely eat out. “We don’t eat out as a family unless it is someone’s birthday or we are traveling,” she shared. “Individuals may choose to eat out, maybe lunch during the week, or go out to dinner with friends on a special occasion. But with six people, eating out regularly would mean that we couldn’t accomplish our other financial goals,” Horrell explains.The frugal living hack to avoid dining out so much is meal planning and having ‘emergency items in the freezer can help eliminate the temptation to go out to eat.
Optimize your largest expense: Housing
Housing is one of the biggest household expenses, if not the biggest. Attacking this is a big frugal lifestyle step, but can help you move your money towards what you value.Riley Adams, a Senior Financial Analyst in the San Francisco Bay area found a way to have living expenses paid: “My wife and I chose to manage a multi-unit home by living in one unit and renting out the other two. In one, we had long term tenants who provided steady rent payments which covered almost 80% of the monthly cost of the mortgage and associated housing expenses. In the other, we ran an AirBnB which provided sufficient income throughout the year to cover all of our remaining living expenses for almost three years,” Adams explains.They saved a tremendous amount of money by not paying for living expenses. Adams says they chose to funnel all of the savings into a house down payment fund to buy a place of their own.
Julie Rains, writer and publisher at Hall and Rowe Media LLC, chose to make housing as affordable as possible fighting the temptation a lot of people have to buy their dream home even if they can’t really afford it.“My husband and I have bought homes that were readily affordable,” Rains states.“Buying a large home in a high-end neighborhood was never my dream in the first place,” she shared. “This idea was reinforced when my employer in a small town was acquired by a larger company, which relocated a high percentage of its workforce. The result was a housing crisis as homes flooded a market with few buyers. People hung on to their jobs but became financially strapped because they often had to pay two mortgages (or one mortgage and rent) far longer than they anticipated. The panic made me careful about the type of house I’d buy and also the price I’d pay as a percentage of our budget. We saved on housing, which gave us more money to invest and spend in other categories,” Rains explains.
The Emotional Benefit Of A Frugal Lifestyle
Saving money is great, but so is feeling good about your money. Removing guilt and worry is a by-product for those living a frugal lifestyle. “By making small sacrifices, like having one car, I have peace of mind in doing things that I love to do like eating at fun restaurants or traveling. It helps ease the mental guilt you can get sometimes from spending money,” Kroeger shared. Cara Palmer who runs a namesake personal finance blog gives frugal living credit for her financial peace of mind. She says, “Frugal living has benefited me emotionally because I don’t worry about money anymore. I have some debt on my rental properties, but the rent pays the mortgage. My emergency fund is fully funded and I have more than six months of living expenses saved.”“Emotionally, I feel more free because I know that I can live on a relatively small budget,” Rains shared with us. “A less expensive and smaller home can also mean lower property taxes, energy bills, and insurance. Less time worrying about finances can free up time for a social life.” Words like freedom, security, and family are sprinkled throughout the stories of those living a frugal lifestyle. I think we can all agree that reducing anxiety around money is something that would benefit a lot of people.
Frugal living doesn’t have to be all or nothing
Most people balk at the suggestions of those living a frugal lifestyle. “No heat, are you kidding me? One car for the family, how are we going to get around?” There are certainly parts of the country you can’t turn the heat off. Families can’t all live with one car. Thankfully, it’s not an all or nothing lifestyle choice. “Nothing is for everyone,” Beck shared. “But frugal living can certainly benefit everyone, even if it’s just in small doses.”Johnson echoes this sentiment saying: “For us, frugality is about saving in areas we don’t care about like cars, so we can have more money for areas of our lives that matter to us like investing for early retirement and travel.” Frugal living is a term that encompasses a wide variety of money choices. Andre says, “I think everyone should try to save in the areas that aren’t important to them. That’s different for everyone.” Kara Perez, Founder of Bravely Go, shares, “I think frugal living can be for everyone, but not all frugal living is created equal. In the personal finance community, a lot of the same frugal living advice is thrown around — bike, don’t drive, cook at home instead of eating out. Those specific things work well for some and not for others. It doesn’t mean that people who can’t bike are not living a frugal lifestyle.”Saunders points out that “It’s important that people not let their desire to align with societal views of frugality overshadow their happiness. In the long run, we believe that only helps to foster a negative relationship with money.”
The inherent privilege in choosing to live frugally
It’s important to acknowledge the choice that “frugal living” implies. Saunders says that frugality based on survival was a reality for him in the past, but provided a base of grit he can still use today. “Based on my personal experience, I see my old life as a training ground for frugal living,” he shared. “Back then, it was an act done out of survival that extended into my late twenties but I’ve used that same grit and resourcefulness today. I know that if I had to, I could always return to a more frugal life and still be able to take care of my family. Today, we’re far less frugal than we were in years past but we don’t find that decision to be more or less virtuous than if our frugality were done out of survival.” Perez, who regularly confronts privilege on her blog says, “What a lot of people call frugal living has actually just been how much of the world has lived…forever. 80 years ago, many families made their own clothes and cooked exclusively at home. As our world has changed from a home-based to a work-based lifestyle, frugality has gotten harder for many people. Frugality requires time and today time is a hot commodity. So that leads to frugality becoming a choice, which is an aspect of privilege.” Perez continues, “People often get upset when you mention privilege, but the key thing to remember is privilege is not a monolith. It shows up in a variety of ways. For example, if you have a stay-at-home parent who can cook every meal, it’s going to be easier for the working parent to bring lunch to work and not buy out. That’s a level of privilege. If you are able-bodied, you can bike or walk to save on transportation — that’s a level of privilege. Privilege is fluid. I do think that for many people, choosing frugality goes hand in hand with their privilege, often in ways they may not be aware of.”
Your Quick Guide To Getting Started With Frugal Living
Since frugal living looks different for everyone, this quick guide will help you get started looking at your spending and saving to see if you can start to take frugal steps.
1. Examine your largest expenses
See how you can minimize your largest expenses that come out of your income every month. Here are a few ideas on how to do this:
As frugal as you set your heart to be, you won’t really know how much you saved if you have no way of tracking it. In general, you want to know:
Your income
Expenses
Goals, such as if you want to pay off debts or go on vacation
Setting up a budget can be intimidating, so we’ve created a map of how to budget for the very first time. Frugal living can open up a whole bunch of possibilities within your budget, because you’ll be saving money instead of spending it.
5. Look at your bucket list
Probably one of the strongest reasons to dip your toes into frugal living is the possibility of making your dreams a reality. That long bucket list and financial to-do could finally be conquered if you’re open to changing your mindset around money and your lifestyle. Below are a few questions to get you started. Feel free to journal about them. It’s more impactful when you write it down.
What are your major goals or dreams? Look at your bucket list if you have one already.
How will money work for you to make it happen?
Can you be frugal in one area to get that money for your goals?
If your goals a big, like paying off six figures of student debt, don’t give up because you know that cutting your cable won’t address that goal quickly. All good things come with time. Frugal living won’t make every dream possible, but it’s one step to money management that can help.
Remember that you don’t need to do all five steps at once. Take your time and choose one thing. See if it works for you. If not, try something else.
Frugal Living Is Only Half Of A Bigger Equation
“You can’t out-frugal your way to rich” is a phrase heard often in the personal finance community, and one that sparks some debate. Saunders says, “We’ve certainly heard the feedback that ‘one can’t frugal their way to being rich’ and it’s simply not true. Simply avoiding high cable, high-speed internet, phone and data plans and cooking at home for most people could translate into savings to about $300 monthly. If that money were invested wisely, it could build tremendous wealth for the average person. It may not be the fastest way to do it, but it will certainly get it done.”To put it simply, income and spending, when combined can be powerful. Athena Valentine, owner of Money Smart Latina agrees. “Yes, how I manage my money is important but I can’t manage money I don’t have,” she shared. “Someone making $40,000 a year could save the same amount as someone making $60,000. But if the person making $60,000 lived like the person making $40,000 you could become richer faster. The more money you make, the more money you can realistically invest pre-taxed and the more financial products you qualify for, at a better interest rate.” She points out that you need to consider your income just as much as you consider how you spend money. “You can’t save what you don’t have to begin with, period. Crockpots and frugality are only gonna take you so far.” Bethany McCamish is a personal finance writer and the founder of His & Her Fi.Feature Illustration: Laura Caseley For The Money Manual. All other photos Twenty20.
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By Bethany McCamish 
