10 Frugalfying Ways to get to $1 Million


This guest post is by Leo from Zen Habits. If you like this post, check out his site or subscribe to his feed.

No matter how much you increase your income, you'll never increase your net worth if you spend it all on flatscreen TVs, double monitors, a swish home office, or a pimped-out ride. But the good news is that with a few minor adjustments to your lifestyle, you can set up your finances to get to $1 million (or more) without killing yourself or your pocketbook.

Let's take a look at 10 easy ways to frugalfy yourself and get to $1 million. But first, let's take a little look at how we're going to get there:

  • Long-term. Let's assume that you're starting with $0 in investments, and that you have 25 years to get to $1 million. If either of those are wrong, you'll need to play with a calculator such as this one to get the right numbers for you. But the general principles will still apply.
  • Automatic. How we'll get there is by making some adjustments in the way we live, and take the savings and automatically deposit them into an investment account. We'll also assume a 10% interest in an index fund. Again, the numbers can be played with.
  • YMMV. The actual changes you make could also vary -- the ones we provide here are just ideas -- an example to get you started.

OK, so let's take a look at the 10 Frugalfying Ways to get to $1 million:

  1. Make your own coffee. Instead of buying that Starbucks latte at $4 per pop, brew your own at home and bring it in with a thermos. It's so much cheaper (and with a good creamer, tastes just as good), and you help the environment by not throwing out all those disposable cups! Savings: $120 ($4 a day) per month.
  2. Brown bag it to work. Instead of buying a $6-$12 lunch every day, bring in last night's leftovers or a sandwich and some healthy snacks (fruits and veggies!) at a cost of $1-2. Plus, get a lot more done at work during your quiet lunch hour, and you can leave early! Savings: $180 ($6 a day) per month.
  3. Watch DVDs instead of going to the movies. Not only will you save $5-6 on the ticket, but you also don't have to pay $10 for overpriced concessions. And you can be much more comfortable on your own couch. Get Netflix or a similar service with a monthly fee, and your DVD rental can be super convenient at a price of less than $1 per movie! Let's assume that you go to the movies once a week or more ($7 ticket) and get popcorn and a drink (about $8). If you go with your partner, this could be much more. Savings: $60 per month.
  4. Cut out cable. This might sound drastic to many people, but my family cut it out and we don't miss it a bit. And if you have Netflix or a similar DVD service, you still get to watch some great stuff without all the commercials. Better yet, read! Cable costs vary in each area, but in mine it's about $60. Savings: $60 per month.
  5. Eat in more. How often do you eat out? Depending on where you eat, it could cost anywhere from $6 to $30 (or more). And eating at home is not only much cheaper, but is much healthier as well. If you eat out 5 or more times per week, we're talking about some major cash here. Let's assume you eat in 5 times more per week at $10 savings per pop. Savings: $200 per month.
  6. Quit the gym. Face it -- you don't really use it. If you do, you can probably do it much cheaper at home with a set of dumbbells and a barbell. If you do aerobic exercise, the local park, or your neighborhood streets, are free! Savings: about $40 per month.
  7. Drive less. Gas prices (and auto maintenance) are really high. Commute with a friend or family member, consolidate your errands into one errands day, walk to your corner store instead of drive, and try cycling to work a couple days a week. I'm sure you can come up with other ideas. If you can drive less, you can easily save $20-40 in gas each week. And help the environment and get healthier at the same time! There are no losers here. Savings: about $150 per month.
  8. Rent. Sure, everyone wants to own a home. Until they struggle to meet their mortgage, or see how much they have to pay in insurance and taxes, or have to maintain a house on their own. Owning comes with a much higher price tag, with a higher mortgage and other costs. And when you factor in interest payments, you are paying three times the house's value just to get a little equity. Invest the difference instead and you'll have much more equity. This is a biggie. I don't know what it could save you each month, as housing and rent prices vary greatly per region. But for myself, I easily save $1,000 per month by renting. Let's be conservative though. Savings: $500 per month.
  9. Reduce power consumption. A few simple changes, such as using CFLs instead of regular light bulbs, or reducing your heating or cooling costs, using less hot water, shutting off your appliances and lights more, etc., and you can make big changes to your power bill. Savings: about $50 per month.
  10. Have sex. OK, this might not be an obvious way to save money, but I threw this in to make the rest of it more fun. To qualify as a frugal measure, though, you shouldn't pay for the sex. Find someone willing to do it for free. It's cheap exercise, it's great fun, and it's the cheapest form of entertainment there is. Savings: unlimited.
  11. Bonus. Top 10 lists are too constricting, so we'll add a bonus tip: buy a late-model used car instead of a new one. If you can, pay in cash, saving you thousands in interest payments. Savings: $200 per month.

Total saved with all of the above options: $1,560 per month. If you took this amount and invested it, at 10% return, you'd have more than $2 million after 25 years.

  • You choose. You only need to choose half these options to get $1 million -- pick the ones that you think you can do, make them add up to $800 per month. Or substitute others where you can cut back (let's say magazines, or video games, or using store brands instead of brand names).
  • Make it gradual. You don't need to make these frugal changes all at once. Do one or two per month, and it won't seem hard at all.
  • Make it automatic. Now take the amount you save each month, divide it by two, and automatically deduct that bi-weekly amount from your paycheck and deposit it into an investment account. Again, make it automatic! Don't count on your willpower to make the transfer. And don't even think about touching it. To make this work, you should save up an emergency fund first, but after a couple of months of building up this fund, switch your transfers to an index fund investment account.
  • Watch it grow. Every few months, check on your account. You should see it growing at a very satisfactory rate. Every time you get an income increase, or cut back on more expenses, put the difference into your automatic investment transfers. Now sit back, and enjoy the climb to becoming a millionaire.

Read more posts by Leo Babauta at Zen Habits, including popular ones on Zen To Done: The Ultimate Simple Productivity System, Double Your Productivity, keeping your inbox empty, clearing your desk, becoming an early riser, and the Top 20 Motivation Hacks.

Photos by Darkpatator and Linbow.


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Will Chen's picture

Thanks for the great guest post.  Zen Habits is a great blog and I recommend anyone who is serious about increasing zen and productivity in their daily lives to check it out!

Guest's picture

I found this somewhat interesting as you can tell from my post... http://www.capitalai.com/blog/2007/05/16/gas-prices-is-there-anything-th...


Guest's picture

YAY - I'm already doing 8 out of 11 of these!

I don't know, though - I'm married, so I don't know if I am actually saving any money on #10! :)

- Aaron

Guest's picture

Depending on where you're located, #6 may or may not work. For me, if I hadn't had a gym membership, I wouldn't have been able to keep up my New Year's resolution to walk 10,000 steps a day every day. It was just too cold and snowy and icy around here and no one shoveled their sidewalk. I could have gone to the mall to walk for free, but the nearest mall is about an hour away, so then we run into #7.

Instead, what I did was to ask my parents to buy me a gym membership as a Christmas present. That way I didn't have to pay the money and I got something I really wanted for Christmas!

Guest's picture

seriously, you oughta pick up a suze orman book or something..these ideas are hokey and deprive people of a few of the affordable luxuries in their lives in return for a decades-away nest egg - we also need to remember to live, so if that latte makes you happy then buy it, and give up the real overkill, like that car you don't need, the furniture, the new-new pc, optional medical procedures, life enhancing vitamins and anything from whole foods...

Paul Michael's picture

Not that they're silly ideas, but that people do have to live. If you cut out every little luxury life affords you, and invest it for 25-30 years, then by the time you have your $2 million you're getting too old to enjoy it. I think we'd all love to retire with a bunch of cash, but I'm not willing to live the best part of my life like a pauper for me to achieve that. I heard a great story the other day about taking $100, just $100, and doubling it. Maybe buy $100 worth of a product wholesale on ebay and selling it for profit. Now you have $200. Do the same again. And so on. It seems like a simplistic notion, but the guy telling the story had made $1 million in just 2 years. And he had sacrificed nothing. 

Guest's picture

I'd argue that some of these might improve your quality of living. Walking/cycling instead of driving can have health benefits as well as helping your wallet, reducing power consumption is good for the environment and I think I can make myself tastier, more nutritious lunches than most of the stuff within walking distance of my office.

I think it's important to at least consider these options. Then people can weigh whether they're practical for them, whether they would improve or detract from their lifestyle and whether they want to spend their money on short-term happiness or save up for bigger things.

Lynn Truong's picture

i think leo's point is that there are many things in our lives that we think we "really need" but once we don't have them, we actually don't miss it that much or there are alternatives that are less expensive and better overall. there's a difference between being frugal vs. cheap. frugal maintains an enjoyment of life, believes in the value of health, and considers others in our lives, while being aware of how we spend money. cheap means to be greedy, take as much as we can for as little as we can, regardless of anything else. leo also says

You only need to choose half these options to get $1 million -- pick the ones that you think you can do, make them add up to $800 per month. Or substitute others where you can cut back (let's say magazines, or video games, or using store brands instead of brand names).


It's great to be open minded to ideas about how to look at our "mandatory" expenses a different way. Thanks, Leo!

Paul Michael's picture

Now, I do agree that being frugal vs cheap is the way to be. And I also agree that some of these points are doable for some people (I live in suburban hell...it would take me 30 mins to walk to the nearest store, and I just don't have time to spend over 1 hour to get a gallon of milk). But in general, I would definitely say pick and choose from Leo's list. If you do them all, something tells me your quality of life will suffer for the sake of the mighty dollar. 

Guest's picture

I take issue with the idea that sex is cheap. Leaving aside the potential costs of contracting a disease, the need for contraception is obvious-- given your mandate to save money. Condoms, birth control pills, etc. and the potential costs of pregnancy are in no way trivial!

Guest's picture

I saved $1M in just under 10 years. I was way more frugal than this, though. Problem is, now that I worked so hard to become a millionaire, its like I don't have anything at all since I sure as heck don't want to spend any of this hard-earned savings.

Guest's picture

I feel you bro... I feel you

Guest's picture
Ben Neilson

Helpful hints. I think having the discipline for these are hard but definitely the results are worth it.

I found you guys through Simple Dollar's morning roundup.

Guest's picture

I would never, NEVER, give up my gym membership. For me, going to the gym is like going to church for other people. Why would he assume "you don't really use it"? (Speaking of church, there's another place to be frugal.)

If you're trying to be really frugal, don't have pets or children.

Guest's picture

I agree with everything on this list except this one. Long-term, owning a home is far more financially sound than renting. Sure, you do pay for things that renters don't, but you also get to write off your mortgage interest (thousands of dollars a year right there), you can write off permanent improvements when you sell the house, and most importantly, once you pay for it, nobody is going to jack up your rent and kick you out. It's yours.

Renting is like flushing money down the toilet every month.

Andrea Karim's picture

If you're trying to be really frugal, don't have pets or children.

Ain't that the truth!

Guest's picture

Amen to that..

Guest's picture

#9.Reduce power consumption
Lowering your water heater’s setting from a very HOT 140 degree Fahrenheit to a just HOT enough 120 degrees can save you nearly $50 a year.

Lowering your thermostat by roughly 10 percent (for instance, from 73 to 68 degrees Fahrenheit) for eight hours a day can save approximately 10 percent off your heating bill.

Here’s another great heat saver, did you know that by reversing your ceiling fan in the winter can actually keep you warm for less.

Guest's picture

I am from India, and even though there is a lot of difference in our cultures, most of what you say, holds good for people anywhere in the world, who have a finite income and infinite desires.

Here's my Score:-

Already Doing: 1,2,3(Sometimes),5,6,8,10 (Oh yeah buddy!)

Seriously Thinking about: 4

May never do: 11

Nice Read. Infact I also have similar advise for people (on my blog) especially on use of credit cards, saving more money and ofcourse keeping a small but fixed percent of money to spend on yourself. So that you dont get that slavish feeling!!!

Guest's picture

#11 : Switch Off lights

Yes this is true, I bought down my energy monthly bill by 50% by doing this. There was always something unnecessary bulb running somewhere in your home, switch off that. It saves a lot !!

#12 Conserve water

This will save another $$ on water bills.


Guest's picture

You would not believe how much money I save per month by eating in! (And yes, that means making my coffee and taking it to work in my ultra nifty thermos.) And with all the great websites devoted to sharing recipies and tips like , it's easy to expand your know-how and save that cash.

Sarah Winfrey's picture

I like the idea that we should find the luxuries in our lives and decide if they're worth the cost, not just in the moment, but over the long haul.  I think we can decide to screw the million for the lattes/whatever, but the we at least know we're doing it.

Guest's picture

Awesome top 10 list. I definitely agree with the renting over owning point. My wife and I just bought a house less than a year ago, with everyone telling us what a good investment we had made. But we're spending at just $800 more a month on the mortgage, not to mention what we spend additionally on utilities.

We were just talking 2 nights ago about how much better an investment we could make if we put that $800 into something else besides our house. Even if it's just a savings account, it would still wind up a better investment than our profit from selling our house.

Guest's picture

I am one of the people that agree that renting a home is not as good of an option vs. owning (at least for long-term).

Think about it...the owner of the property is essentially running a business, and must charge you enough to cover his/her costs (mortgage payments/upkeep/insurance/etc). The problem with most people is that they try to compare apples to oranges when comparing costs of renting to owning.

Sure, you can obviously rent a 1000ft^2 apartment for a LOT less than you'd pay for a 2000ft^2 house with a nice yard. However, if you compare the costs of owning vs. renting equivalent properties, then month-to-month owning wins. Add in the fact that you have to do some/most of the maintenance yourself if you own, then while you have a mortgage, the costs balance out. BUT, after you've paid off the mortgage, your only mandatory recurring costs are taxes.

For me, my mortgage (PITI) payment is <$750/month. To rent an equivalent house in my area would be $900-1100/month. Granted, the extra $150+ does get used for upkeep. However, I don't have to worry about massive rent hikes (even tax increases only affect the mortgage payment by 10-20 of dollars, not a hundred or so like you'd get from a renter).

Plus, with owning, you have even more options for saving money by being able to install high-efficiency items (windows/AC/furnace/etc) to save you further on your month-to-month bills. Try convincing your landlord to install a new, high-efficiency furnace and A/C to save you money on your heating/cooling bills!

Guest's picture

Instead of driving less, consider not having a car.
This might be difficult depending on where you live, but you might be able to do it. If you have kids that might be impossible though.

#3 is extreme for me. It's not the same experience.

Guest's picture

Well, here's the problem, the hubby and I don't do any of these non-frugal things like buying starbucks etc...  Actually, we have an income of 15000 per year.  Our only two luxuries are cable and internet.  We both own late model cars, and oops we own the house, sorry no payments either.  So this article wasn't helpful at all.  BTW....  If you could convince my hubby that number 10 is something that he should be interested in...  I'd be truly grateful.  I'd even be willing to give up cable and the internet for that.



Guest's picture

I guess the fundamental question here is why do you desire $1 million in 25 years? What will that bring you, a sense of security? Will your action of being frugal today pay off tomorrow? Is the sacrifice worth it? If your goal is to make $1 million, is there a faster way of achieving it, if that’s your goal. Or if your goal is a sense of security, can you achieve it today, or must you wait twenty-five years?

Guest's picture

Honestly, who hasn't heard these tips if you've read more than one personal finance book or blog? The "latte factor" is overhyped.

Guest's picture

what about of instead of buying a car, buy a motorcycle? I have owned motorcycles and mopeds since I was 13, the fun is way more than a car, traffic jams don't matter, and I have a license to fly =) (and parking, insurance, gas and repairs are way more cheap than a car)

Guest's picture

what about of instead of buying a car, buy a motorcycle? I have owned motorcycles and mopeds since I was 13, the fun is way more than a car, traffic jams don't matter, and I have a license to fly =) (and parking, insurance, gas and repairs are way more cheap than a car)

Guest's picture

Health clubs have machines that allow me to maintain muscle tone and flexibility longer than those who do not do workouts. For me, the main discouragement to going to health clubs is their tendency to play loud, irritating music. The expeerience then becomes stressful and aversive rather than stress-reducing and innately rewarding. Very good investment if you can find an accommodating club; mine is quiet if I go early in the morning.

Mark Homer

Guest's picture

I spot two places where the figures are potentially flawed. Most people don't go for that latte on days they don't work, and most people don't work all 30 days of a month. Which means they also aren't buying lunch out all 30 days, either. The figures above assume $4 X 30 days for coffee, and $6 X 30 days for lunches out.

Aside from that, the tips here have been recycled ad nauseum, and for those of us nonsheeple who don't do the coffee thing, the lunch thing, the movie thing, the gym thing, the flashy car thing, etc...there's nothing of value here.

Truly, the best tip I've seen came from the comments: don't have pets or children!

Guest's picture

Number 8 is completely wrong: spending money on rent my seem like a good choice in the the short term, but financially, it is much better to own rather than rent.

Guest's picture

I think 10% interest is a thing of the past. I started investing a few years before 9/11/2001 in a highly regarded index fund and it would take a miracle for me to realize a 10% return on my investments in 14 years (25 years from the time I first started investing.) We've got to be realistic here. The best way to get money is to marry rich or get a better paying job.