Is your goal to save more money?
Be it for a long-needed vacation, a down payment on your first home, your emergency fund, or because you want to be more financially independent and gain more freedom?
Then this guide to frugality and daily frugal living tips with a big impact is for you.
What is Frugal Living?
Frugal living means using your time and money more mindfully and thus more efficiently. Frugality is not about avoiding every possible purchase to save as much money as possible. It is for everybody that seeks a meaningful life and is committed to contentment.
Many people may shake their heads or laugh when they hear the word “frugal” and instantly think that frugal living is being cheap and miserable. But that couldn’t be further from the truth.
Why? Because frugality is not about avoiding every possible purchase to save as much money as possible. Frugal living means using your time and money more mindfully and thus more efficiently.
You avoid wasting money on unnecessary things and intentionally use your hard-earned dollars on purposeful things that bring you joy. Living frugal means prioritizing what’s important to you and cutting back on those that are not.
When it comes to making a significant impact on your finances, cutting back on your daily cappuccino, or skipping enjoying some delicious Italian food once in a while won’t help you that much.
Although doing so will save you some money, the following frugal hacks I’m presenting will require a little more work and effort, but down the road, you’ll see that it’s worthwhile.
So we’ll step out of our comfort zones together, prepare you for this lifestyle change and build some healthy habits for your wallet.
Clever Frugal Living Tips with a Big Impact (that can save you 1000s of Dollars!)
Luckily there are numerous creative ways to live frugally. Let me show you how to incorporate more frugality into your life and save money starting TODAY! I guarantee that these methods will have a substantial impact on your finances and your financial goals!
These hacks are so simple, easy to digest, and follow, that you’ll ask yourself why you didn’t come up with them yourself. Ready to attack your debt, increase your emergency fund, or save for things you always wanted to have or do? Then let’s begin.
1. Food and Groceries
Let’s start with food and groceries because I believe this will be the most relatable and easy to follow regardless of your financial goals, habits, lifestyle, or age.
When I and my wife began our frugal and minimal journey, these were the areas in our lives where we made significant changes to regain control of our finances, pay off our mortgage, and save more money.
Here is what you can do to save more money in this category.
1.1. Pack a Lunch for Work
To illustrate how easy you can save money in this area, let us do some quick math.
Let’s say you spend an average of 10$ every working day – 5 days a week – this sums up to 200$ a month and 2400$ a year.
And if you spent those 10$ on average every single day buying yourself lunch, that would be 3650$ a year, and 36.000$ in ten years!
Calculating those expenses this way was eye-opening for us and helped us understand how much we could save – just by packing our lunch as often as we could every day instead.
Sure, it takes more time and effort to plan your meals, but I hope you get the point of how easy it is to throw your money away by eating out every day for lunch.
1.2. Learn how to re-create your Favorite Meals at Home
Of course, the same applies to eating out. Before we made some drastic money-saving life changes, we used to eat out two to three times a week.
On average we would spend about 70$ per meal for both of us. So we spent about 140$-210$ a week, 560$-840$ a month, and 6720$-10080$ a year – just for eating out!
Imagine what you could do with those 10k instead! So I strongly recommend learning how to cook your favorite meals as soon as possible.
Not only will you save tons of money but you will build a new skill that can be fun and will serve you forever. Plus, you never know what ingredients are being used in the restaurants. From now on, it can be in your hands and I bet you will eat more healthily. And finally, you can invite friends and family over to impress them with your cooking skills.
1.3 Always stick to your Shopping List
This is such an easy way to save money. Just make a shopping list every time before heading to the supermarket. Stick to what you have listed down and avoid impulsive and unnecessary purchases.
What also helped us tremendously is doing our groceries only once a week. This is a simple and clever way to ensure that all the food you buy is eaten up before shopping again. Additionally, it saves a lot of time.
Finally, don’t forget to compare prices because often our eyes get enticed by overpriced items which you can surely get for a better price, just around the corner.
1.4. Stop wasting Food
Did you know that one-third of food produced for human consumption is lost or wasted globally? This amounts to about 1.3 billion tons per year, worth approximately US$1 trillion. These are shocking numbers, and everybody can do his part to lower the food and financial wastage.
Take an honest look at how much of your grocery gets thrown away because you forget to consume it before the food hits the expiry date. When we observed our food consumption behavior, we realized that we could be much more mindful of our food wastage and the financial waste that came along with it.
From then, we attempted our very best to consume everything we bought and cooked before we shopped for more. Eventually, you’ll cultivate the habit of not wasting anything at all.
Bonus Tip: consider going reusable whenever possible, and save even more waste and money.
2. Housing and Utilities
Other significant areas where you can save money and take control of your finances are housing and utilities. Here are some tactics and ideas that helped us enormously and we’ve been using for years that you can implement in your life too.
2.1. Downsize
If your plan to reach your financial goals sooner, you have to be willing to adjust your lifestyle and find creative ways to avoid huge payments that eat up your hard-earned money. And since housing and utilities often make up half to even two-thirds of your income, one excellent way to do so is downsizing.
It makes perfect sense. Living in a smaller space, either an apartment or a house, helps you reduce rent or mortgage. And you will automatically also buy fewer and stuff to fill it.
So when it comes to housing expenses, focus on aggressively reducing them to ¼ of your paycheck.
Remember, your goal is to regain control of your finances and gain financial freedom fast. If a big chunk of monthly income goes into paying rent or a mortgage, this will hinder you from achieving your goal. At least it will slow down your progress immensely.
Another positive benefit of downsizing or even living tiny is less clutter.
2.2. Learn to Maintain your Stuff
Have you ever skipped maintenance of your dishwasher, fridge, windows, or car? Just because you thought they were going to last forever? Until the normal wear and tear got worse and became even more problems? Don’t worry! Everyone does that.
The outcome was often a larger bill down the road than if we just would have done regular checks and taken preventive care sooner. It pays off to learn to take care of and maintain your stuff.
For example, have your car checked and repaired on time, change the rubber isolation of your windows before they turn porous, and fix the leak in the kitchen before the problem increases.
Those are easy-to-learn tasks that will save you a ton of headache and money in the long run.
2.3. Learn to Save Water and Energy
Here is what we did to save in this area: reducing the times bathing in the tub and showering instead. In the kitchen, we filled a pot with a bit of water. Then we cleansed dishes with a sponge before putting them into the dishwasher. We used to rinse the dishes off under running water and wasted a lot of it.
We also used energy-saving bulbs and turned off the lights in the rooms we were not using. Additionally, we unplugged the electronics whenever we didn’t use them.
If we had to buy new household devices, we compared prices and always chose those with the lowest energy consumption.
If you have cold winters, wear more layers of clothes instead of having the heater on constantly.
And if you have hot summers, consider cross-ventilation by opening the windows instead of using AC.
3. Enjoyment
Lastly, don’t forget to enjoy yourself while pursuing your financial goals. Also, if you are eager to get out of debt as fast as possible, taking care of your enjoyment is key to staying on track.
So whether you are looking for the next holiday destination, or even only for things to do near you, know that you can always find better deals when you compare prices, book long in advance, or get creative in doing activities you enjoy.
You might even find this process quite fun, so let me jump into my favorite hacks and activities.
3.1. Find Better Deals
If you’re planning your next holiday destination then you have to get familiar with Groupon – or any other platform that offers great deals.
You will be shocked how much you can save by comparing the prices there and the regular ones you’d have to pay booking directly from the vendor.
3.2. Explore your Neighborhood
Entertainment doesn’t necessarily mean that you always have to jump on a plane, fly for hours and spend tons of money on a hotel. Instead, you can explore your neighborhood, and you might come across a low-cost or even free activity that you like.
My wife and I often jump on our bikes and ride across the town. And sometimes we would stumble across some small pop-up markets, art festivals, street shows, and live music events. And we are happy that we mostly don’t have to spend a dime.
3.4. Get Creative at Home
Who says that you have to leave the house to find something fun to do? What about playing games with your loved ones, cooking together with friends, or relaxing on the couch and having a movie night?
What we also do sometimes is take our time to reflect on our lives and be thankful for what we have. We would look into photo albums or watch vacation videos while enjoying some homemade lemonade or wine.
3.3. Get and Stay Active
Our favorite way of entertainment is hands down being active and doing sports, such as cycling, running, swimming, hiking, working out, and playing basketball. Luckily this kind of entertainment doesn’t cost much if anything at all. And most of them you can do anywhere and at any time. We often even work out at home. It’s rewarding and fun!
So don’t shy away from entertaining yourself by moving your body.
Whatever you decide to do, keep in mind that you don’t have to spend a lot or nothing at all on your entertainment.
4. Important areas not talked about regularly
Talking about money seems so often taboo. We think that money topics are too private. But rather than sharing only on reducing your grocery bill, saving on utilities, or finding creative ways to entertain yourself, we need to address them also.
4.1. Build an Emergency Fund
Many people live from paycheck to paycheck. They would get their income, spend most of it without any plan, and forget to save for emergencies. And emergencies always happen. You might have to get your car repaired, replace electronic devices at home, or pay medical emergency bills not covered by your insurance. And then there is nothing left to pay for it – what then?
So keep in mind that you need a safety cushion that covers emergency payments without turning towards debt (credit cards or loans). Doing so will save you from adding up more debt and help you save money for your future and continue to build your wealth.
A good rule of thumb is saving from 3-6x of your monthly income, 6-12x if you are a bit more conservative. Then you will have enough saved up to cover most unexpected expenses, also in the case of getting laid off.
If you already have debt, start with a smaller amount (1x your monthly income) and see if you can expand it bit by bit more.
4.2. Get rid of Debt
Your primary wealth-building tool is your income, but it’s such a waste if most of it is slipping off your hands to pay the unnecessary debt. Why? Because debt hinders you from using your money for other valuable opportunities such as investing to reach your financial goals.
A simple and powerful way to save more money every month is to cut back on the number of your monthly debt payments. Especially, attack those consumer debts that sum up so quickly on your credit card and have very high-interest rates. And stop borrowing money as well. Instead, aggressively start paying more than the minimum to get out of debt faster. The feeling of being debt-free is indescribable!
But what about mortgages? Well, that depends on your investment strategy. We consider having a mortgage on our home not an asset but a liability. An own house does not produce any income. That’s why we attacked our home mortgage as aggressively as possible. On the other hand, rental property is an asset that brings in monthly income and helps grow wealth. Assuming the payment interest is low (as it has been in the last years), we would continue to pay as agreed with the bank and let the money work for us.
4.3 Automate your Savings
Now that you are attacking your debts and have your emergency fund in place, it’s time to make your savings plan as easy for you as possible. And the simple rule here is paying yourself first and automating it.
This tactic is one of the easiest and best frugal living tips to help you build your savings fast without feeling tempted to spend that money elsewhere. It is the opposite approach to spending most people are using. Most people spend the money on shopping and entertainment first before asking themselves how much is left to save – mostly not so much.
This way, you take care of increasing your savings first. And it doesn’t matter how much you’re able to set aside each month. You can even start with as small as 10$. But building a constant habit of doing so and increasing your rate over time is the way to go.
4.4 Get a Side-Hustle
I love this one because this is what I have done over the past decade. There are two ways to build wealth with frugality, increasing your monthly savings and monthly income. If you do both, you can accelerate the wealth-building process by 10x.
I love this one because before my wife and I got married, we visited a wedding fair to get some inspiration for our wedding. We wanted a photo booth on ours, so we tried a few. And I came up with the idea to build my own to save some money. Today I am a proud owner of a photo booth rental company that earns me more than a salary. And it all started as a side hustle.
I want you to ask yourself, how can you make some extra 50$, 100$, 1000$ dollars or even more? Do you have a skill or service you can offer others? Maybe you help someone learn a new language, go dog or babysitting, or you can graphic design and take pictures. If you have some value to offer, there is someone somewhere who could use your service. Some side-hustles are a bit of work upfront but extremely rewarding down the road.
So don’t be afraid of starting your own business or hustling on the side. Even small gigs add up and accelerate your way to financial independence.
5. Final creative Ways to Live Frugally
There are tons of creative ways to live frugally and save more money. Additionally, there are a few final thoughts and ideas I’d like to address.
5.1. Sell your Clutter for Cash
A fun and great option to make a few extra dollars that you can save is selling your unused stuff that collects dust at home. Of course, you will not be able to get back what you paid for, but at least your used things will serve others and clear your home from clutter. And you prevent those things from landing in the trash and avoid waste.
5.2 Cut Memberships and Subscriptions
Have a thorough look at your monthly expenses, and you might find some memberships or subscriptions you don’t use and have forgotten. You might have multiple monthly movies or music subscriptions or other application payments that you can let go of. Quit them and save the money instead.
5.3. Compare prices before buying
Compare the prices before buying – this applies to any purchase you make, small or big. Saving money includes smart money decisions even when you need to buy something urgently. But especially if you are preparing to spend a lot of money upfront (car, electronics, holiday flights, and hotels…) or over time (insurance policies, subscriptions, memberships,…) it is crucial to check prices with different offers to get the best deal. Make this your second nature, and I guarantee that you’ll reach your financial goals sooner.
5.4. DIY where and whenever you can
One of the main aspects of frugality is gaining more financial freedom through smart money decisions that will save us money and time. Time for our loved ones, ourselves, and for learning new skills (saves even more money) that are fun.
So one of the best money-saving tips that will help save you even more money while learning new fun skills is learning how to do certain things yourself.
This can be as simple as cutting your hair, more challenging like repairing your torn clothes or cooking your favorite meals, or as labor-intensive as car maintenance and full-on plumbing issues.
The online world has enabled us access to a vast array of tutorials. So aside from lack of time, there is no more excuse not to DIY and save you thousands.
Final Thoughts
Thank you for sticking around with me till the end. I hope I shared something with you that you found valuable and that you can implement in your saving strategy. Remember, you have got time on your side, don’t rush and then be overwhelmed with all tactics because you forget to enjoy yourself. Now you have the most valuable tools to live frugally. But as so often in life, you’ve got to find the right balance. So have fun saving and investing and enjoying yourself – the frugal way 😉
Cheers Ray 🙂
