23 Tips on How to Be Frugal & Make Savvy Money Choices

It may seem daunting, but it’s easier than you think to make savvy money choices. The more frugal living tips you know, the easier it is to save a lot of money. It will also empower you to use your credit cards more wisely when spending money on what you usually buy.

With some strategic financial planning and simple tips, you can save hundreds, if not thousands, of dollars each year by implementing these steps and living more frugally.

The Definition of Frugality and Why it Matters

Before we dive into the best tips on how to be frugal, do you know what living a frugal life is all about?

What does frugal living mean, and what is it to be a frugal person?

To be frugal means to be thrifty, sensible, and make savvy money decisions. We can be economical with spending and other resources like food or water.

Since the pandemic, toilet paper and paper towels might also be resources you want to budget. Though frugality often has a negative connotation of being miserly, it’s actually more about being resourceful and mindful of our spending or consumption habits.

Choose to drink water over your favorite soda, plan a game night, and get rid of clothes that could benefit someone in need. Look at your bills. Could you spend less money on things, and how is that impacting your financial goals?

Why is it important to live a frugal life?

Frugal living is all about getting what you need while saving money and keeping a smile on your face. Living frugally is not a one-size-fits-all type of lifestyle. Rather than push yourself to the extreme, aim to find a level of frugality that you can live with happily. In doing so, you will set yourself up to reach and surpass your financial goals. Below are the most important overarching themes of frugality. Next, we dig into the three largest key expense categories for Americans and how to make adjustments that could save you thousands.

Cut Back on Unnecessary Expenses

This tip may seem obvious, but it’s worth repeating: save money by cutting back on unnecessary expenses. This could include eating out less, buying fewer clothes, and driving less.

Make a Budget and Stick to it

Determine how much you need to spend each month on essentials, then cut back on other expenses accordingly. Depending on how creative you want to be, there may be room to cut back on some of the essentials, like housing. Keep reading to learn how.

Live Below Your Means

A crucial part of frugal living is learning to live below your means. This means spending less than you earn, even if it means making some sacrifices. It may be difficult but worthwhile in the long run.

Practice Frugal Living

Once you’ve successfully implemented a few money-saving practices, you can continually reevaluate your budget and cut back more if you wish. Knowing where to start evaluating your spending will help you save money faster.

There are four key expense areas that you need to evaluate when looking to save money: food, housing, transportation, and entertainment. Collectively, these expenses can be referred to as the cost of living.

Tips on How to Be Frugal & Implement Lifestyle Changes

There are tips on how to be frugal everywhere if you take the time to notice. As you practice being more mindful of spending money, you will also become more aware of how to save money by changing some of your habits and looking at how you spend money with fresh eyes. 

Everything you pay for, from Laundry detergent to the electric bill and your credit card use, is an opportunity to find a way to save more money. You’ll learn to be loyal to saving money and your financial goals rather than brands and unnecessary conveniences that cost you extra money.  

Opt for the Generic or Brand on Sale

It won’t always be a lot of money, but a little money saving here and a little savings there is what frugal living is all about. 

Bigger is Not Always Better. Look at the Cost Per oz/piece/unit

Many clever manufacturers market the bigger size of the product as the economical option when often it’s more expensive per piece or oz than the smaller size. 

Check Your Apps Before You Shop

Retailers like Target and most grocery store brands have convenient apps that allow you to clip coupons that will save you money in minutes. Sometimes, they will even alert you when a favorite product goes on sale. 

Key Expense Areas

Are you familiar with the cost of living in your area? Cost of living refers to maintaining a certain standard of living in a geographic area. Generally, the cost of living figure is above the poverty line at a point where you can live comfortably with limited or no extras like entertainment expenses.

Cost of living considers everything from housing to food costs, transportation, and entertainment. Though the cost of living can vary greatly by region, finding a place to live with a suitable cost of living for your lifestyle will depend on your preferences.

For example, the cost of living in Manhattan is much higher than in a small town in Arkansas. However, in Manhattan, transportation costs can be much lower as people are more likely to use mass transport. In contrast, rural living usually requires owning a car.

Suppose you prefer to have a smaller living space without any yard care. In that case, the extra housing costs of living in Manhattan may suit your preferences better than living in a home with a yard to maintain. These are all trade-offs when evaluating your short and long-term financial goals.

Evaluating the cost of living in your area will help inform your budgeting plan and identify challenges based on where you live. With nomadic and remote work opportunities becoming more popular, you may be inspired to explore other areas that better suit your lifestyle.

Now that we have a foundation for how to evaluate our expenses, we can dive into some of the things you can start doing today to start spending less and saving more. Here are 21 best ways to save on housing, unnecessary expenses, and regular spending. 

Budgeting Food Costs

One of the best places to look for opportunities to save money is food. Everyone has to eat, so we cannot eliminate this expense, but we can be more frugal in planning our next trip to the grocery store.

Would you reevaluate your food spending if you knew that, on average, Americans throw out $2200 worth each year?

According to recent Bankrate figures on American spending and reports from the USDA on food waste, it is clear that fine-tuning your grocery shopping can have a significant upside for your personal finances.

During the novel coronavirus, we saw a lot of empty shelves and panic buying at the grocery store. Interestingly, according to reports from the USDA, 89.5% of households were food secure during 2020. This figure was unchanged from 2019.

So, before you plan your next grocery store run, look at your fridge and cabinets. Are they well-stocked already? Have you thrown out spoiled food lately? How many creative recipes could you devise using only the ingredients on hand?

Asking yourself the above three questions can help you develop a system for buying the food items you are most likely to use and want to eat.

Don’t shop when you’re hungry.
We’ve all been there; it’s the end of a long day, and we haven’t been to the store in a while. We’ll grab a couple of essentials to get us by until the weekend when we can make a proper store run. 

But then, as we’re walking the aisles, everything becomes a temptation. Avoid this diet and spending pitfall by planning your grocery shopping and meal plan.

In situations like these, you may find it’s more cost-effective to pay for grocery delivery rather than risk overspending by going to the grocery store on an empty stomach. 

Make a list.
Not only does having a list help you get through the grocery store faster, but it also helps keep you focused while shopping. It makes you less likely to impulsively buy extra tempting treats when you head in with a game plan.

Buy in bulk for pantry staples.
Dehydrated goods like grains and legumes are ideal bulk purchases. Instead of buying items like laundry detergent, toilet paper, paper towels, and other essentials as needed, choose a subscription option to keep your pantry stocked and save money, or buy in bulk less frequently.

Meal planning and portion monitoring.
Cooking at home more often and bringing your lunch to work are great ways to save on food. If you want to be even more money-conscious, consider using an inexpensive kitchen scale to help you determine portion sizes.

This can be a real eye-opening practice for your savings challenge and our calorie consumption. 

Grow your own.
Save money on groceries and enjoy the reward for your efforts. If you have a knack for growing your own fruits and vegetables, you may turn your harvest into a fun new hobby by taking up canning.

Getting into gardening is also a great way to meet other community members who enjoy doing the same. You may decide to pair up with a friend or neighbor and swap produce to enjoy an abundant diversity of fresh fruits and veggies. 

Bonus Tips on How to Be Frugal:

When it’s time to go to the grocery store, pay with a credit card that earns 5% or more cashback. Use the cash back towards a credit on your statement balance. Over a year, these rewards could add up to over $500 in savings for the average household. It’s like free money towards your savings challenge efforts.

Taking queues from the Silent Generation
If you’ve spent time around people of older generations, it’s likely the high costs of today compared to years past is a frequent topic of conversation. However, our elders can offer some great tips on how to be frugal.

One of my grandfather’s favorite stories is about how particular his mother would be when grocery shopping for the family. She went once a week to the butcher and knew down to the fraction of an ounce how much meat she would need for each dish the coming week. Though our lifestyles have moved away from this type of precision buying, it’s a great lesson in buying only what you need.

saving money on groceries

Tips on How to Be Frugal with Housing

If you’re short on cash, save by getting creative with your living situation. There are several ways to do this, but these are our best tips on how to be frugal when it comes to your living arrangements.

Refinance your mortgage or renegotiate rent.
You only know once you ask or do a little research. You may save yourself thousands with little effort and a couple of conversations at the bank or leasing agency.

But before you start negotiating, have a target figure in mind and understand your leverage. Do you have outstanding credit? Have you increased your home value? Are there many vacancies in your complex? Are you a courteous tenant? 

If you can confidently answer yes to the applicable questions, you may have a decent bargaining chip.

Renting out a room in your place.
Long-term and short-term rentals are great options. Just be sure to check any restrictions in your neighborhood or housing complex. Finding a roommate or family member to live with will cut housing costs dramatically.

Check the efficiency of your home and appliances.
Years ago, Energy Star ratings for appliances became mandatory. This means appliances made after 1992 have already been optimized to lower your electric bill. You’re less likely to see much money savings in upgrading most appliances. 

However, evaluating windows and doors for poor seals or cracks and having your insulation inspected could save you money on HVAC costs over time. 

Downsizing.
Less space, lower utilities, and the opportunity to make money by selling off excess furniture and goods you will no longer have room for.

Sometimes, just moving into a different home with a few hundred fewer square feet is enough to allow you to eliminate your mortgage cost and own your home outright. Being out of debt from housing is a huge way to boost the amount of cash available to save.

Consider alternatives to traditional housing.
RV living or van dwelling, or ditch your living space altogether and try couch surfing. Though this may be considered extreme frugality to some, it all comes down to your priorities.

Frugal Tips for Transportation

Where, how, and how far you commute can vary significantly based on where you live and how active your lifestyle is. There are several ways to save money on transportation, including:

Carpooling or using public transportation whenever possible.
These days, you don’t even have to work at the same place as your carpool pals. Check Waze for drivers taking similar routes in your area or the local public transport website in your area.

Buying a used vehicle instead of a new one.
Avoiding the immediate depreciation of driving a new vehicle off the lot is a quick way to save thousands. With Carfax and other sites available to check vehicle history, it is easier than ever to ensure you’re buying a quality car. 

Avoid unnecessary trips by planning ahead.
Consolidating errands will save gas money as well as your time.

Keeping your car well-maintained to avoid costly repairs.
Check the owner’s manual to see when specific parts need servicing. Spend a little upfront to prevent significant unexpected expenses down the road.

Shop around for the best insurance rates.
Make it like a game. Know the precise type of coverage you need to make sure you’re comparing service and rates as closely as possible. 

Use apps or websites that help you find the cheapest gas prices in your area.
Money saving is at your fingertips at all times. Apps like Google Maps even show the gas prices for nearby stations without a specific search. 

Save Money on Entertainment

Typically, spending on entertainment is what we look forward to most. We fill our weekends with fun activities to keep the grind of work at bay. So, if we cut out entertainment to be more mindful of our spending, won’t we just be miserable? Nope! Keep reading for tips on how to be frugal and keep boredom at bay when you’re on a tight budget.

Find free or cheap activities in your area.
Often, museums have a free day or time during the week for local visitors. Many fitness clubs or groups also offer free classes to new students or in public spaces, especially during the summer.

The thrill of the hunt!
When buying nonessential items like new clothes or home decor, shop around and get specific about what you want. Challenging yourself to identify what you want and search for the best price can be a rewarding way to limit your spending.

Take a free class or sit in on a free lecture.
Many community colleges or local businesses host classes and seminars on various topics, from the arts to personal finance, health, hobbies, and more. Check your local specialty shops for an events calendar that may have a few free events that interest you. The best part of attending a class is you walk away with valuable knowledge at no cost.

Stream movies instead of going to the theater.
This is a great way to save money on food and entertainment costs. Nothing beats a good movie night with friends from the comfort of your home.

Take advantage of coupons and deals.
Coupons and deals are often available for entertainment venues when you purchase tickets in advance. Sometimes, venues even offer last-minute discounts, so check for them before you go out.

Volunteer or take a part-time job.
Why not do something rewarding for your community or bank account? Keeping boredom at bay is a big part of living frugally and happily.

Bonus Tips on How to Be Frugal:

Around the holidays, many retailers offer gift card bonuses with a minimum gift card purchase. You’ll get a gift to give and one to keep. You can also consider putting gift cards to your favorite restaurants or venues on your wish list. A night out is always fun, but a free one is even better!

Closing Tips on How to Be Frugal & Make It a Habit

Save this post so you can review these tips on how to be frugal often and start saving today! A little effort can go a long way in making your budget stretch further. Have fun and be creative with finding frugal ways to enjoy your hobbies and entertainment options. Be mindful of your spending and save money without sacrificing too much of your lifestyle. Happy saving!

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Marly is a lifestyle writer and creator of simplylivinghappy.com, a site dedicated to helping readers improve their health, wealth, mindset, and overall happiness. When she’s not writing, you’ll find her listening to audiobooks while gardening, visiting with family, or traveling.