Frugal Living: The Ultimate Guide To Save Money In 2021

Photo by Micheile Henderson on Unsplash

You’ve heard all about it.

Frugal living is the answer to many of your financial problems and the start of your road towards financial independence.

You’ve tried to cut off expenses and follow all the tips that frugal living blogs give you.

But for some reason, you haven’t been able to stick with it.

You are frustrated and disappointed.

Heck, you might even beat yourself up for not being disciplined enough.

Truth is, frugal living is like dieting.

It should be sustainable in the long term; otherwise, you’ll end up back in square one, eating the entire box of Oreos in one sitting.

In this guide, you will learn everything you need to know to start frugal living.

The best part?

You’ll be able to adapt the frugal living ideas in this guide to create a lifestyle that you love and get on track to reach your financial goals.

Sounds good?


Let’s dive right in.

What Is a Frugal Lifestyle?

First, we’ll go over what a frugal lifestyle is not.

Being frugal is not being cheap.

While many people use them as synonyms, there is a big difference between the two words.

J. Money, author of the Budgets Are Sexy blog, is spot on the difference between being cheap and being frugal.

He said,

“… cheap is appropriately used in instances where people hold out on doing things for others because they don’t want to spend money. In this case, cheap can be interchangeably used with the word selfish.” (J. Money)

So, as long as you’re not skipping on tipping your waitress in the name of frugality, you’re not being cheap.

Being frugal means being smart about how you spend your money. It’s carefully considering which things are important to you and which are not and saving (and spending) money accordingly.

Frugal people share traits such as:

  • Purpose: they know what their savings are for, which fuels them to keep their frugal lifestyle.
  • Priorities: they know where to spare and where to spend according to what is important to them.
  • Consciousness: they know exactly where their money is going and make the most of what they have.
  • Creativity: they find ways to spare money by learning new skills and DYI-ing whenever they can.

All in all, living a frugal lifestyle means being smart about money and having your priorities aligned.

Is It Worth It Being Frugal?

The short answer? Yes.

The benefits of frugal living are plentiful, especially when you’re intentional about what you’ll do with the money you save.

So, what happens when you start frugal living?

  • You learn to live below your means.
  • You reach your financial goals faster.
  • You pay off the mortgage sooner.
  • You learn to appreciate what you have.
  • You gain resiliency to face financial crises.
  • You become more generous.
  • You improve your mental health.

Making a few tweaks in your life in exchange for mental peace and saving enough money to sip margaritas in the Maldives?

Photo by Sidhra Ibrahim on Unsplash

Heck yeah, it’s worth it!

How Do You Live a Frugal Lifestyle?

Going frugal is a process.

The key to success is to start doing small tweaks in your lifestyle and see how that goes.

Experimenting is your new best friend.

Coming up next, you’ll find a 4-step guide to help you on your path to frugality.

Keep in mind that there’s no one-size-fits-all. The steps you’ll learn are meant to guide you in your process, but you’ll get better results when you experiment and find what works for you.

Let’s move on to the first step.

1. Build Strong Foundations That Crush Your Excuses

The first thing you want to do is to get clear on why you want to live a frugal lifestyle.

Yes, the benefits alone are a great incentive, but they don’t feel quite personal, do they?

Making a change in your lifestyle is making a change in your behavior. And to change your behavior, you need a compelling personal goal.

That’s why it’s critical to get clear on why this is important to you.

Your first task is to write down the reasons why becoming frugal would improve your life.

Are you saving up to quit your job and travel around the world without caring about money? Or maybe you’re a working mom that wants to stay home and take her of her children?

Whatever it is, make sure you write it down.

Having a visual statement of your why helps you remember why you are changing your lifestyle.

Got it?


Your second task is to create a bucket list with things that you’d love to do but haven’t done because you need more money.

Have you dreamed of traveling to the Maldives? Write it down. Do you want to renovate your kitchen? Write it down. Are you saving up for early retirement? Write it down.

This bucket list represents the dreams that are important to you. Writing things that don’t inspire you takes a toll on the impact of the bucket list, so try to keep it relevant.

And that’s it!

You’ve completed the first step to start your frugal life.

Here are the key takeaways for step 1:

  • Get a strong sense of why you’re changing your lifestyle.
  • Write down your reason for frugal living.
  • Create a bucket list of goals and dreams.

The next step will teach you the basics of frugal living.

2. Establish The Pillars of Frugality that Fit Your Lifestyle

To ensure that you are successful with your new lifestyle, you need to be smart about it.

This means finding places where you can cut expenses without feeling like you’re a prisoner of your own life.

Let me explain.

Say you love eating Oreos, and my very first tip is to cut out foods that are not indispensable. You decide that cutting out the Oreos makes sense because you don’t need them to survive.

This is a recipe for failure.

You will go back to buy Oreos thinking, it’s okay, I deserve to have Oreos once in a while.

Then you’ll feel guilty.

You’ll feel like frugal living is not for you.

And you’ll quit.

A better scenario would be opting to eat a vegetarian meal twice a week. This saves money from buying meat for two days, allows you to buy your Oreos, AND to save money.

Now, that’s smart spending.

The key is to find what suits you better and still allows you to save money.

It’s a bargaining process.

In this step, you’ll set up the systems that will be the pillars of your frugal life.

Your third task in the process is to prioritize your expenses.

  • Brainstorm a list of all your expenses, not worrying about priorities yet.
  • Make a second list where you order them by importance. Make sure that housing and food are at the top.
  • Write an estimate of how much you spend on each category.

This allows you to get a general feeling of where your money is going and where you can cut expenses.

Once you’ve done this, the next task, creating a budget that fits your lifestyle, is a piece of cake.

If this is your first budget or budgeting hasn’t worked for you, follow J.D. Roth’s (author of the hit blog Get Rich Slowly) advice on creating a good budget:

“To minimize the risk of failure, a budget should be simple and easy to use while reflecting both current realities and your future goals.” (J.D. Roth)

Here are some tips for creating your budget:

  • Look at how much money you spend every month. Is it lower than your income, or does it exceed it?
  • Determine what your fixed costs are, like housing and food. Use this information to set your budget for fixed costs.
  • Dedicate a percentage of your income to paying your debt, saving, and/or investing.
  • Take a look at your variable expenses. Is there any obvious category in which you can spend less? Can you repurpose that money for saving or spending on something that matters more?
  • Try using budgeting techniques such as The Balanced Money Formula or the Zero-Based Budget.

Keep in mind that this first budget is likely to change as you adjust to your frugal lifestyle.

If you need extra money in one category, take it from another one and make a note about this.

This strategy keeps you away from debt and helps you adjust your budget to your needs.

The next task is keeping track of your expenses. This helps you to stay within your budget, identify where to make changes, and figure out where you’re spending more money than necessary.

Here are a few tips to help you keep track of your expenses and make the most out of it.

  • Download an expense tracking app that is appealing to you.
  • Pay with your debit card as many things as possible. It’ll help you keep track of where your money goes.
  • Aim to stay within your budget in each category.
  • Review your expenses every month and revise your budget until you have a good sense of what’s essential and what’s not.

And that covers the second step.

Here are the key takeaways from step 2:

  • The key to success is smart spending.
  • Prioritize your expenses.
  • Create a budget that fits your lifestyle.
  • Keep track of your expenses and revise.
  • Revise your budget monthly until it reflects the reality of your life.

In the next step, you’ll discover over 111 cheap living tips to save money.

3. Finish Up With The Best Frugal Living Tips

Now, don’t let this list intimidate you, you’re not supposed to apply EVERYTHING that’s in it.

The reason why the list is so massive is for you to find the ideas that fit into your lifestyle and help you move to frugality.

Your task in this step is to pick one or two tips and experiment with them.

Remember, it’s better to start small and steady than to go all in and get overwhelmed.

Pro-tip: read through the list and write down what you think is doable for you. When you’re done, pick one or two tips and that you’ll experiment with for at least a couple of weeks.

It might seem like you’re doing too little, but trust the process of becoming frugal slowly. It’ll help you create lasting habits and get adjusted to your new lifestyle.

Frugality in Finances

  1. Get a part-time job or side hustle to earn more money.
  2. Make a debt payment plan and get rid of it as soon as possible.
  3. Set up a monthly automatic transfer to your savings and investment accounts.
  4. Save up for an emergency fund.
  5. When you want to buy something, write it down along with the date. After a month, look at your list and see if you still want or need the object. This is called a 30-day list.
  6. Wait for the sales and discounts to buy an expensive item, like a TV.
  7. Keep track of product prices to learn how much they cost — this helps you know when something is on sale for real.
  8. Try renegotiating your water and electricity bills to lower what you pay.
  9. Double-check your bills and bank statements for possible errors
  10. Switch bank accounts if you’re paying too much in fees.
  1. Invest in equipment to exercise at home and save on the gym membership.
  2. Take care of your health, eat good food, and move your body; it’s cheaper than medical bills.
  3. Quit smoking and reduce alcohol drinking.
  4. Drink more water, it’s better for your body and cheaper than sugary drinks.
  5. Reduce junk food and anything that’s premade.
  1. Plan your meals weekly to avoid buying more than you need.
  2. Check out coupons and grocery flyers for discounts on your grocery list.
  3. Cook food in bulk to reduce eating out and the time you invest in cooking.
  4. Invest in a slow cooker it’s your best ally to create cheap recipes in bulk.
  5. Being on a budget doesn’t mean eating bland. Hit up Google or Pinterest and look for tasty, cheap recipes.
  6. Eat less meat; reducing the number of meals with meat will save you some money.
  7. Shop seasonal foods, it’s cheaper, and the fruits and vegetables are tastier.
  8. Try the shop brand; you probably won’t even be able to tell the difference.
  9. Grow your own food, it’s cheap, easy, and you get a new frugal hobby.
  10. If you have food close to expiring, freeze it to keep it fresh for a longer time.
  11. Invest in a high-quality coffee machine and drink coffee at home rather than buying a to-go cup.
  12. Try making your own dressings, spice mixes, and cleaning solutions instead of buying premade.
  13. Know what you own to avoid clutter and buying things that you already have.
  14. If you have something that you only used once in 3 years, sell it, it’s unlikely that you’ll use it again.
  15. Only buy things you need; it makes no sense to update your TV when you rarely turn on the one that you already have.
  16. Buy used furniture and clothes, you’ll save money and put things to good use.
  17. Use reusable items instead of disposable ones; think razors, straws, paper plates, and napkins.
  18. Swap traditional lightbulbs to LED you’ll save on your electricity bill and on buying lightbulbs.
  19. Use a thermostat to help you ensure that your house is warm and that you save on your electricity bill.
  20. Insulate your walls to ensure that the heat stays in and keep your electricity bill in check.
  21. Consider buying songs or movies instead of paying for a monthly subscription.
  22. Look into wardrobe capsules to create many outfits with a few clothes.
  23. Save up some money and buy quality clothes instead of buying cheap things that you’ll have to replace sooner.
  24. Buy at the end of the season to take advantage of sales prices.
  25. Shave your wool clothes, refresh their look, and avoid buying a new sweater.
  26. Learn to sew/repair your clothes instead of throwing them away.
  27. Try sun-drying your clothes instead of using the dryer to save on electricity.
  28. Borrow or rent clothes that you’ll only wear once. If you’re getting married, consider renting your wedding dress instead of buying one.
  29. Keep a tidy home, make sure that the things you own make sense in your life.
  30. Learn how to fix broken things instead of replacing them.
  31. Get rid of your home landline.
  32. Buy your internet modem rather than leasing it.
  33. Prepay your cellphone to avoid extra charges and keep your cellphone use in check.
  34. Start using kitchen rags instead of paper towels.
  35. Try a bidet; you’ll save up on toilet paper and have a cleaner booty, too.
  36. Unplug whenever you’re going out and won’t need your appliances.
  37. Wash your clothes in cold water because the amount of energy needed is lower.
  38. The ultimate tip for saving money is downsizing your home. Move to a house that fits your needs more than your desires.
  1. Buy a reliable, cost-effective car that fits your budget.
  2. Have only one car per family to reduce expenses.
  3. Shop around for insurance, find the best coverage at the lowest price.
  4. Walk or bike when you can; this saves you money on gas and gets you some exercise.
  5. Do all your errands in one day to save money on gas and time in your week.
  6. Wash your own car; there’s no need to take it to the car wash.
  7. Roll the windows to reduce gas costs.
  8. Take a look at how much interest you’re paying and refinance it if it’s too high.
  9. Keep up with your oil changes to ensure it doesn’t break down, and you have to waste money on fixing it.
  1. Spare on baby items by buying only what you and your baby need, not everything people tell you to buy.
  2. Try cloth diapers to save a ton of money and help the environment.
  3. Start a frugal hobby as a family, such as hiking, biking, or gardening.
  4. Dress your kids in second-hand clothes. Visit your thrift shop to find high-quality pieces at a better price.
  5. Start the tradition of getting together and have fun on a family game night.
  6. Teach your kids about money; it helps them understand how you manage your finances.
  1. Light up some candles, cook something tasty, and wear fancy clothes to have a memorable at-home date night.
  2. Swap a night out with a dinner party at home. You can tell your friends to bring some food and have a potluck night.
  3. DIY your gifts or pay for them with gift cards that you’ve gotten in the past.
  1. Read as much as you want for free by checking up your local library.
  2. Less TV, more exercise, and reading to save up on electricity, and saying goodbye to cable.
  3. Find free entertainment like museums or public concerts in your city.
  4. Enjoy the fresh air by making a picnic in the park, going for a hike, or relaxing on a bench in a public square.
  5. Take on a frugal hobby such as yoga or gardening.
  6. When you go out, try to have appetizers or dessert at home.
  1. Take the free roads and avoid tolls.
  2. Flights are much cheaper if you buy them months before your trip, so book with time.
  3. Using comparison flight apps to find the best deals.
  4. Book directly with the airline to avoid paying extra for issues like cancelations, delays, etc.
  5. Companies can track the flights that you’ve searched before, and inflate their prices, so use incognito mode or VPN.
  6. Travel to cheap destinations; they’re many places to visit on a low budget.
  7. Avoid souvenirs to spare some money and luggage weight.
  8. Travel offseason; prices are much lower, and the destinations are less crowded.
  9. Take advantage of free walking tours; get to know the city you’re visiting without wasting money.
  10. Choose how to treat yourself by selecting one experience you don’t want to miss out on.
  11. Travel with your carry-on only to avoid luggage fees.
  12. Check your bank’s international rates and change banks if they’re too high.
  13. Carry snacks everywhere you go to avoid eating in restaurants, especially at the airport.
  14. Get a place with a kitchen and cook as much as possible to save money.
  15. Shop at the local market to experience the local culture, find the best prices, and eat fresh food.
  16. Look at the prices on the menus to make sure they’re within your budget.
  17. Join travel loyalty programs to save a lot of money with discounts and coupons.
  18. Pay for your flight and live in the country for free by volunteering.
  19. Explore the city like a local and save money on taxis by using public transport.
  20. Save money for your trip beforehand, and stay within your budget.
  1. Drop unnecessary insurance; take a look at your insurance plans and only keep what you need.
  2. Take a look at off-peak deals in restaurants, hotels, flights, and attractions.
  3. Grab all the senior discounts by asking around in shops if they have something for you.
  4. Have a fund for healthcare costs; avoid not being able to pay your medical bills.
  5. Pay yourself to help you stick to a budget and avoid reckless spending.
  6. If possible, don’t stop working. Try a side-hustle, sell something, or turn your hobby into profit.
  7. Invest in age-proofing your home to avoid injuries and hospital costs.
  8. Consider paying someone to help around the house; it’s a small investment to take care of yourself.
  1. Rent your spare room using platforms such as Airbnb to make some extra money.
  2. Exchange your products/services for someone else’s to save your money to spend on other things.
  3. Cut waste by cutting around food, using overripe bananas for baking, and using every drop of your products.
  4. Forage for food; pick mushrooms, go to pick-your-own-food farms, or take fruit from the trees,
  5. Learn to be content with what you have, appreciate the things you already have.
  6. Repurpose and recycle by turning old clothes into cleaning rags or using magazines for DYI projects.

Phew, we unpacked a lot of information there!

Did you catch the tips that you think go best with your life?

That’s fantastic!

Here are the key takeaways from step 3:

  • Start small and experiment with different strategies.
  • Pick one or two tips and apply them to your life for a few weeks.

Before you go on and apply them, there’s one last step that you need to know.

Step four helps you maintain your frugal lifestyle and make it more sustainable.

Let’s get on it.

4. Tidy Up and Maintain Your Frugal Lifestyle

As I’ve mentioned before, transitioning to frugal living works better when you take it one step at a time.

Taking a look at your frugal efforts allows you to evaluate what’s worked, what needs to be tweaked, and what doesn’t fit in your life.

Your task on this last step is to mark up a review date in your calendar to go over your frugal efforts.

On your revision day, answer the following questions:

  • What are the frugal changes that I made?
  • Did I adjust to the changes?
  • How have the changes impacted my life?
  • Is there anything that’s not working?
  • What do I change back or modify?

Celebrate your wins, write down your action plan for the things that need to be tweaked, and stop doing what doesn’t work.

The last thing to do is to come back to this list and choose a new tip to try out.

Becoming frugal is all about experimenting, adjusting, and learning.

It’s okay if something doesn’t work for you or if you find a different way to do it. It’s your life, after all.

Here are the takeaways from step 4:

  • Becoming frugal is all about experimenting, adjusting, and learning.
  • Mark up a review date in your calendar to go over your frugal efforts.

We’re done.

You’ve gone through all 4 steps!

Now you know how to become frugal.

Frugality Is a Way of Living

Just like dieting, frugal living can frustrate you or disappoint you, but it’s not supposed to.

Frugal living is about finding balance, taking control of your life, and making decisions that transform you into the person you want to be.

You can allow yourself to eat an Oreo now and then, but that’s not the rule anymore. You change, you become conscious of your spending, and you’re on your way to reaching all your goals.

Photo by Nelly Antoniadou on Unsplash

Imagine the freedom of taking a vacation anywhere you want without going into debt. Imagine the relief of being able to help those who you love most. Imagine the safety of having a thick bank account.

A happy, frugal life is possible for you.

You deserve to have it.

Now it’s time for you to take action.

Take the tips that we’ve given you and put them in practice for a couple of weeks. When they start to feel natural in your routine, come back and try something new.

In the long run, you’ll become an expert at simple frugal living.

I believe in you.

You’ve got this!

Andrea is a freelance writer who offers blogging services to her clients. She enjoys cooking, traveling, and cuddling her cat Dali.