A Beginner’s Guide to Frugal Living


I don’t do frugal living perfectly. There are times (usually around 8:00 a.m. on a Monday) when I cannot be stopped from my single-minded march toward Starbucks. At other times, I willfully disregard everything I know about paying retail and (albeit begrudgingly) fork over $75 for a pair of jeans. Still, I consider myself a pretty frugal guy. The broad brushstrokes of my life are characterized by financial decisions that are well-considered and based on clear financial goals.

If you’re new to frugal living, fear not. Most of us are still learning, and we can all be tempted to veer off track at times. For the newbies out there, here are seven principles to keep in mind as you enter the ranks of the frugal — it’s a sort of beginner’s guide that we’ve all had to learn (and often, relearn). (See also: The Two Biggest Mistakes People Make When Starting to Live Frugally)

1. Pace Yourself

Adopting a simpler and more frugal lifestyle can take a bit of practice. Embrace it by degrees. Diving in and cutting your monthly budget by 50% all at once will only be a shock to your system and leave the entire family feeling pinched and resentful. It takes time to phase out unnecessary expenses and gradually redirect your resources to align with your goals.

2. Understand Your Goals

Saving money in and of itself may be a worthy enough goal. After all, we all know we’ll need it — we just may not yet know when or why. But a smarter, more motivating approach is to understand specifically why you’re saving. Is it for an earlier and more comfortable retirement? To start your own business? To finally pay off the mortgage? To just sleep better at night? Having a “vision” for your financial life will help drive your frugal choices.

3. Get on the Same Page

For couples or families, no financial decision is made in a vacuum. Make sure your significant other is as committed to reinventing your financial life as you are. Reach a common goal or set of goals and understand what changes and sacrifices are needed from each person. Encourage each other and redirect each other when necessary.

4. Sacrifice — Selectively

Living a frugal lifestyle doesn’t mean saying “no” to everything. Rather, successful frugality means understanding your priorities so that the “yeses” are aligned with your priorities. It’s still okay to indulge from time-to-time,  and it’s still okay to splurge because those moments are balanced by an overall money management style that is driven by clear boundaries. Feel like a lunch out on a Friday? Go for it. You can because you’ve brown-bagged it every other day of the week.

5. Don’t Over-Budget

The idea of planning, creating, and sticking to a budget gets a lot of airtime. But categorizing and budgeting every dollar that comes in the door might not be the best strategy. This approach can sometimes give frugality a bad name — it fosters the idea that frugal living means constant number-crunching and long sleepless nights hunched over a calculator. A far simpler approach is to simply pay yourself first and live off what’s left. Determine an assertive savings rate (subject to change as your skill level increases) and have that money funneled into a savings account, retirement account, or money market. The money that’s remaining will be stretched and redistributed as-needed to cover expenses — often without hours and hours of conscious effort.

6. Make Mistakes

Living a more conscious financial life is a lot like dieting. You’ll have good days, and you’ll have those chocolate cupcake slip-up days. Don’t let the little bumps and short-comings along the way derail you. Understand that mistakes and missteps are part of the learning process. They will fade away as your skill level grows and as frugality becomes second nature.

7. Chart and Reward Success

Adults need gold stars too. The most successfully frugal people I know monitor how they’re doing from month-to-month and from year-to-year. They become motivated by successes like paying off credit cards, paying down mortgages, and watching their bank account balances grow. The rush of seeing their efforts pay off has replaced the high they used to get from spending mindlessly and acquiring more stuff. Financial milestones acknowledged and celebrated as the truly special occasions they are.

There you have it — the seven principles that will lead you to a more frugal lifestyle. More importantly, these ideas will help make frugality a permanent part of your life, instead of something you dive in and out of as your fortunes change. Embrace the success of it. Embrace the failures. Embrace the road that gets you where you want to go.

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Guest's picture

Starbucks? $75 jeans? RETAIL??? In the same paragraph as "frugal"? Hrrumph. There is no "try" - do, or do not. I jumped into the deep end, going to school on the GI bill. I graduated debt free (and nearly asset free as well), and still eat ramen once a month for nostalgia.

Andrea Karim's picture

Well, I guess everyone should be exactly like you and not find their own way. ;)

Guest's picture
Ben M

IMHO, frugality is NOT about being cheap... it is about finding value. While I certainly don't think that someone who cannot pay the bills should be going to Starbucks, there IS a place for luxury items in a frugal lifestyle.

For me, coffee is not my thing and folgers is just fine for me, but that doesn't mean someone else might value the Starbucks experience and choose to place his/her money there. While I cannot justify $100 bucks/month on coffee, I CAN justify that much on fishing trips.

Frugality SHOULD be a unique experience and it is not a one size fits all sort of thing. Also, for each individual,how they are frugal can change depending on the circumstance. For example, someone who can't make ends meet should not be going to starbucks, while a frugal person who is doing fine can make Starbucks a regular thing and still be frugal.

Guest's picture

The biggest thing that helped my frugal lifestyle was the realization that you don't have to cut everything out, you just need to cut everything a little bit. I shoot for 10%. I've been able to reduce pretty much every budget category by 10% and I don't feel like I'm missing out on anything.

Guest's picture

That sounds like a great strategy.

Guest's picture

Why is the word vision in scare quotes in the paragraph for item two? What reservations do you have about the word's appropriateness?

Guest's picture

Great Tips! The only other one I would add is to just start with a budget for everything. This has helped us be able to be successful with all the tips you’ve suggested!!

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