Freedom.

It’s what we all want, and we’d do anything to get it.

It’s why you’re here reading about frugal living.

Because deep down you don’t want to save money for the sake of saving money, you want something bigger.

You want to give the middle finger to a thankless job, see the world, and have the freedom to live life on your terms.

And you know what?

Good for you.

Don’t ever hide the fact that you want to live free.

When you’re on your deathbed you’re not going to remember how hard you worked, you’re going to remember the dreams you accomplished, the fun you had, and all those “little moments” that couldn’t be put into words.

Let’s see how frugal living can make that happen.

What is Frugal Living – A Definition without the Gobbledygook  

What is Frugal Living

Frugal living has a few definitions.

And each of them highlights something different.

But when you boil it down, frugal living has a single intention:

Saving money for a better life.

It’s not a difficult concept to grasp, in fact millions of people live a frugal lifestyle already.

Ready to find out why?

Is it Worth Being Frugal? What’s in it for me?

Let’s get this out of the way, because it’s what you really want to hear:

Yes, frugal living saves you money, and it’s a big reason why it’s worth being frugal.

But that’s not the whole story.

Sure, having more money is great, but it isn’t the reason people finally embrace frugality (it does sweeten the deal, though).

You see, it’s one thing to have money, it’s another to know what money can do for you.

Still with me?

Good. Let’s talk benefits.

Benefits of frugal living

Here’s the scoop:

When you live frugally, you limit spending on certain things so you have more money for the things you really want (things that make your life better).

Given that, people adopt a frugal lifestyle for dozens of reasons, but these are the 3 most common (and most beneficial):

  • Paying off debt
  • Retiring early
  • Financial resilience

Let’s expand on these ideas and see why they matter:

Paying off debt

Have a mortgage? Credit Cards? Student Loans?

Most people do.

In fact, consumer debt in the US was a staggering 14.3 trillion dollars (yes that’s trillion with a “t”) in 2020.

Now here’s the thing about debt:

You’re never truly free as long as you owe money. It’s a tough pill to swallow, but it’s the truth.

One of the biggest reasons people are drawn to simple frugal living is because they think it will help them pay off debt.

And you know what?

They’re right.

soul crushing debt

A frugal lifestyle makes it possible to tackle debt and pay it off early. That means less interest, less stress, and more opportunities to use your money how you want.

If the only reason you’re considering a frugal lifestyle is to pay off debt, and keep it off, go for it. It’ll be one of the wisest decisions you’ll ever make.

Retiring Early

Early retirement is the ultimate fantasy.

Imagine sticking your toes in the sand whenever you want to – and being young enough to enjoy it.

Frugal living not only helps you retire faster, but also gives you the skills to be fiscally responsible during retirement – frugal habits die hard after all.

Financial Resilience

Money in the bank is like a suit of armor for your well-being.

You’ve heard people talk about “emergency funds”, or how your parents put it, “saving money for a rainy day”, right?

Well nowadays when it rains, it pours, sometimes for months on end.

Having enough money to cover unexpected emergencies, like a layoff (or a pandemic), is a huge relief. Imagine losing your job but you’ve stashed away 6 months (or more) of living expenses.

The money you save with a frugal lifestyle helps insulate you from life’s setbacks.

You’ll sleep like a baby at night, in your full suit of armor, knowing that you can ride out hard times.

Top reasons to live frugally

So, is frugal living worth it?

If you’d like to live free and never lose sleep over money, I’d say it’s worth it.

What Everyone Gets Wrong: Frugal Living Myths and Misconceptions

frugal living myths

Frugal living isn’t skipping out on the tip or being a money-hungry hobgoblin.

It’s a sensible lifestyle choice that rewards fiscal responsibility.

That said, let’s pick apart some of these popular frugal living myths and put them to rest.

Myth #1: Cheap living, frugal living – Same thing!

No.

They’re not.

Frugal living is being resourceful and spending money consciously. When you live frugally, you’re trying to get the best value for every dollar spent.

Being cheap is an unhealthy obsession with saving money. When you’re cheap, you only care about one thing: saving as much money as possible on all things, all the time.

Let’s break down the key differences between cheap and frugal:

Frugal people:

  • Emphasize value – they’ll spend more on something if the quality is better
  • Save money to achieve goals – they limit spending to pay off debt, retire early, travel etc.
  • Skillfully manage their money to improve quality of life

Cheap people:

  • Emphasize price – they’ll go with the cheapest option, regardless of quality
  • Save money for the sake of saving money – Spending as little as possible is their ultimate goal
  • Willing to ignore quality of life to save a few bucks
cheap versus frugal

The bottom line: frugal and cheap aren’t the same.

Frugal focuses on value, joy, and improving quality of life.

Cheap focuses on hoarding as much money as possible, disregarding quality of life.

Myth #2: Frugality is about sacrifice

Frugality is about priorities, not sacrifice.

By no means are you surrendering your happiness for the all-mighty dollar, you’re simply ranking needs before wants.

Is making your coffee at home instead of buying a $10 drink from Starbucks really that big of a sacrifice?

Don’t get me wrong, splurge and get the expensive coffee every now and then, just not every time you want caffeine.

what frugal living really is

The bottom line: a frugal lifestyle doesn’t deny you of the necessities in life, it teaches you to live within your means and limit your money on frivolous things.

Myth #3: Frugal living on one income is impossible

Whether by choice or circumstance, your family might be living on a single income at some point.

Job loss is a very real thing, and if a global pandemic has taught us anything it’s that we’re far more vulnerable than we thought.

But here’s the light at the end of the tunnel:

Even though it comes with its own set of challenges, frugal living on one income is possible.

Here’s a few critical tips to help get you through this period:

Shape your budget to reflect your situation: Carve up your budget (I’ll tell you how to make one) and adjust your expenses to accommodate the reduced income.

Ensure you have enough for fixed expenses and necessities, then scale on everything else (i.e. focus on needs, scale back on wants).

Your credit cards are not a lifeline: Wrap those suckers in barbed wire and toss them in a safe.

Although it’s tempting, if you start to rely on credit cards “here and there”, you’ll create chances to rack up a lot of debt, little by little.

Unless you’re paying the balance immediately, avoid credit cards.

Downsize your life: A smaller living space is cheaper than a bigger one, and having one car costs less than having two.

If you’re one income situation is going to last a while, consider downsizing to slash expenses.

Why Frugal Living Works: Lessons in Value & Compound Interest

value and compound interest

Before you groan about getting a math lesson, remember this:

Knowing how to use compound interest is like having a superpower.

I’m not kidding either.

If you’re not taking advantage of interest, you’re not using frugal living to its full potential. It’s what transforms a little bit of money into a lot of money over time.

Interested? (Shameless pun. I’m not sorry)

Let’s dive into this.

A Dollar Isn’t Always Worth a “Dollar” – The Time Value of Money

Okay, before we talk about interest, it’s handy to know the basics of the time value of money.

(This will be quick, I promise).

A dollar today isn’t worth the same as a dollar 5 years ago.

Why?

The time value of money.

You see, inflation – a general increase in the price of goods and services – decreases the value of money over time.

Put another way, inflation makes things cost more.

Ever wonder why the same cart of groceries you buy now costs more than it did a few years ago?

Blame inflation (and its impact on the value of money).

groceries and the time value of money

Alright, now that we’ve finished our crash course in time value of money, it’s time to relate it to frugality, which is what we’ll do in the next few sections.

Don’t Save Your Money

If frugality is so value-oriented, why keep your money in the bank if it’s only going to decrease in value?

Simple, you don’t. Well, not all of it at least.

Here’s the truth:

Keeping all your money in a regular, run-of-the-mill savings account isn’t putting it to good use.

Yes, you’ll have plenty of cash on hand, but it’s far more efficient to put your money to work generating value instead of depreciating in a savings account.

So, how do you do that?  

What’s the easiest and safest way to make your money work for you?

Take advantage of compound Interest.

Let’s talk about compound interest and make some cash

Compound interest and frugality are a match made in heaven.

Frugality saves you money…. And compound interest grows that money.

compound interest and frugal

Now, the simplest way to increase your wealth when living frugally is by earning compound interest on investments like:

  • A high interest savings-account
  • Any type of IRA
  • Employer Sponsored Retirement Plans (a 401k)
  • A Tax Free Savings Account (TFSA – Canada)
  • Registered Retirement Savings Plans (RRSP – Canada)

All of these plans are built around the same concept: investing manageable chunks of money overtime and letting it earn interest.

If you’re not familiar with compound interest, here’s the gist of it:

Compound interest is interest calculated on your initial investment (the principle) plus the amount of interest earned previously.

Example:

Say you invest $100 into a plan that pays 5% annual interest for 5 years.

Assuming you don’t spend any of that money over the next 5 years, here’s what happens:

After year 1, you’ll have a balance of: $105.00 (because 5% of $100 = $5.00 and $100 +5.00 = $105.00)

After year 2, you’ll earn 5% interest on $105.00, and end up with a balance of $110.25 (because 5% of $105 = $5.25. And $5.25 +$105 = $110.25).

Skipping ahead to the end of year 5, you’re total interest earned is $27.63, and your investment is now worth $127.63.

compound interest in action

Now that you’re familiar with the basics of compound interest, let’s look at a more realistic example…

Compound Interest: A Realistic Example Using a Roth IRA

There are two important things to remember when it comes compound interest:

  1. Start as early as you can
  2. Most of your gains will be made after a long period of time (because interest is a marathon)

That being said, it’s never too late to change your life and start saving money.

Sure, your gains will be small at first, but every little amount adds up.

Example:

Let’s say you’re 40 years old, and you want to start saving.

And after carefully weighing your options, you’ve decided to start investing in your retirement.

Here’s your plan:

1) Open a Roth IRA* (we’re using an IRA because not everyone has access to a 401k)

2) Contribute the annual maximum allowable for IRAs ($6000 in 2021 [or $500 per month]) for 25 years

3) Live a more frugal lifestyle to limits debt and wasteful spending

Assume an annual rate of return of 7% (historically, long-term returns on Roth IRAs average between 7 – 10%)

After 25 years, your Roth IRA will have a balance of $406,000, not counting any other savings, investments, or pensions you receive.

roth ira example

If you’re 40 and just hitting your stride, setting aside $500 dollars every month in a retirement plan will still deliver results.

And the sooner you start, the more your savings will grow – that’s the power of compound interest.

*Note: Roth IRAs are funded with after-tax dollars, and eligible withdrawals are tax-free. They are considered a better investment over Traditional IRAs which are funded with pre-tax dollars, and eligible withdrawals are taxed. Also at the age of 50, your maximum annual contributions for IRAs increase to $7000 – I have neglected this to keep the example simpler.

Compound Interest has a dark side (let’s talk about debt)

When you owe money on a loan or a credit card, compound interest works against you.

This is part of the reason people are perpetually stuck in debt: The (bloody) interest.

Let’s take a look at 2 of the most popular forms of debt:

Credits cards and mortgages and see how they work.

1. Credit Cards – A crash course in the dangers of high interest

Credit cards typically carry high interest rates, hovering around 20%.

And credit card debt is nasty because interest is compounded on a daily basis.

compound interest sucks

That said, almost every credit card company (but not all) has a grace period where if you pay your balance within the grace period, you won’t be charged interest. This is why it’s important not to carry a credit card balance.

Understanding credit card interest isn’t hard. But surprisingly, not many people know how it works.

Let’s walkthrough it:

The interest that you pay on your card is known as the Annual Percentage Rate (APR)

Remember that 20% mentioned earlier? That’s your credit card’s APR.

APR is a fancy way of saying yearly rate or the amount of total interest you will pay over 365 days (1 year).

Let me explain.

Remember how credit cards compound interest on a daily basis?

That means your daily interest rate would be that 20% divided by 365.

So your daily interest rate would be 20% / 365 = 0.0547945205% or expressed as a decimal, 0.20/365 = 0.0005479452 (the daily rate)

what is apr?

Here’s how interest charges are calculated on your bill:

Say you’re carrying a balance of $6500 on your credit card, and your card as an APR of 20%.

1. Divide your APR by the number of days in a year to get your daily rate (express as a decimal NOT a percentage):

0.20 / 365 = 0.0005479452

2. Multiply your daily rate by your balance to get your daily interest charges:

0.0005479452 x $6500 = $3.56

3. Multiply your daily interest charges by the number of days in your billing cycle (use 30 days):

$3.56 x 30 = $106.80 in interest charges

If you carried this same balance for a year, you’d pay $1299.40 in interest charges.

And that’s just wasted money.

The bottom line: pay your balance off or suffer the wrath of interest.

2. Mortgages – Here’s what you’re really paying

Contrary to credit cards, mortgages carry a lower interest rate.

But don’t let that fool you.

A low interest rate and a high principle add up big by the time you pay off your mortgage.

Let’s look at an example:

  • You’ve found a nice house in a reasonably-priced Canadian neighborhood for $280,000.00
  • You’re approved for a 25-year mortgage at a fixed rate of 2.32%

(For this example, neglect taxes, insurances and a down payment, and assume your rate stays at 2.32% for the entire duration of your mortgage)

Using the Royal Bank of Canada’s Mortgage Calculator, you’ll see something interesting:

mortgage example

Your $280,000 home actually costs $368,803.06 because you’ll pay $88,803.06 in interest.

Over 25 years at an annual rate of 2.32%, you’ll pay an extra 32% above the original price of your home in (bloody) interest.

what a home really costs

Compound interest isn’t as fun when you owe money is it?

Now that you’re savvy with the concepts of value and compound interest, let’s switch gears.

It’s time to explore the most important concept when it comes to frugal living (and personal finance for that matter):

Budgeting.

How to Craft a Winning Budget: An 8-Step Mini-Course

As you probably already know, a budget is essential for keeping your finances on track.

In terms of frugal living, a budget helps:

  • Identify bad spending habits
  • Establish priorities
  • Monitor spending
  • Set targets and provide direction
  • Plan for emergencies
  • Stay motivated

If you’re comfortable with budgeting already, feel free to skip these sections and move onto How to Live Cheap: No-Fluff Frugal Living Tips

But if you’ve never created a budget before, you’ll find this section useful.

Let’s get started.

1. Gather your last three months of bank and credit card statements

There’s 3 ways to get your bank and credit card statements:

  • Online
  • The paper copies mailed to you every month
  • Visit your bank and print them

Whatever method you use, make sure you get the previous 3 months.

2. Identify income and expenses

Once you have your statements:

  • Print them off (this makes things easier)
  • Separate your statements by month
  • Identify your after-tax income streams
  • Categorize your expenses

When categorizing your expenses, be specific, because it makes identifying necessary vs unnecessary spending easier.

Here’s typical list of expense categories you might use:

  • Mortgage or rent
  • Car payment
  • Insurance
  • Gas
  • Groceries
  • Eating-out
  • Power
  • Cable
  • Internet
  • Phone
  • Student loans (or other forms of debt repayment)
  • Credit cards
  • Clothing
  • Video games
  • Movies
  • Shoes
  • Travel (a vacation or a road trip)
  • Childcare

If you’re list looks long, don’t worry about it. You’ll be condensing these categories when you make your final budget.

3. Enter your information into a spreadsheet

After categorizing your expenses on paper, put them into a spreadsheet and create an Expense Table.

Here’s what you do:

  • Open a spreadsheet
  • Use the headings Month, Amount, and Category
  • Enter the expenses you’ve categorised from your bank statements found from the previous step)
  • Do the same thing for your income – create an Income Table but use the headings Month, Amount, and Stream

It should look something like:

Note: These are just made up amounts and not based on anything real.

expenses and incomes

4. Total your expenses for each category

Under your Expense Table (the thing you created in Step 3), create a Summary Table based on your expense categories:

a summary table

Next, filter your Expense Table for each category:

filtering expenses

Add up the total for each category:

add up expenses in expense tables

And put the amount for the corresponding category in your Summary Table:

a budgeting summary table

Add up the total expenses in your Summary Table:

budgeting summary table

Repeat this step for each of the 3 months of transactions.

5. Calculate your net gains or losses for each month

Given your current spending habits, are you saving money or hemorrhaging it?

For some, this is a satisfying experience. But for others, it’s a wake-up call to be wiser with their money.

Here what you do:  

Add up your total income for the month (calculated from your Income Table):

budgeting income table

Subtract your total expenses (calculated from your Summary Table):

a net loss

If the number is positive – you’ve saved money (a net gain).

And if it’s negative – you’ve lost money (a net loss).

Even if you’re saving money, start thinking about where you can cut back.

6. Analyze: Determine needs, wants, and repayments

Go through the categories in your Summary Table and break them down in terms of Needs, Wants, and Repayments.

Remember:

Needs are necessities.

Wants are something you can live without.

Repayments are debts you owe.

For example:

  • Groceries are a need
  • Take-out is a want
  • Student loans are a repayment

Special note: Sometimes you’ll have irregular necessities. These are things you need but don’t purchase regularly, or things you have to buy because of unforeseen circumstances.

Irregular necessities are things like:

  • A new laptop because yours busted
  • A minor vet bill because your dog got stung by a porcupine
  • A new pair of winter boots because yours were stolen from the gym (true story)
  • A wedding
  • A birthday
  • Your car registration

Classify these expenses as needs because, technically, they’re unavoidable necessary expenses.

 7. Priorities, pleasures, and elimination

Now that you’ve separated your expenses into needs and wants, it’s time to start building your budget.

In this step you’ll decide what to keep and what to eliminate. Believe me, that’s not always easy.

Don’t sweat it though. Follow these guidelines and you’ll be fine:

  • Prioritize your needs (and repayments): Necessary expenses (and repayments) go in your budget first.
  • Be conservative with wants: Allow yourself a few guilty pleasures – nothing crazy expensive, just a few modest wants.
  • Eliminate everything else: Trim the fat. If it isn’t a necessary expense or one of the few guilty pleasures you’ve allowed, it doesn’t go in your budget.

8. Put your budget together

After you’ve identified your needs, allowed for some wants, and eliminated unnecessary expenses, list your budget items and assign them a dollar amount.

Here’s how to assign amounts to your budget items:

  • List the expenses you know (these will mostly be fixed-cost items like rent, internet, or car insurance)
  • For any category you don’t know, base it on the average of the previous 3 months
  • Go with your gut for now and adjust your budget after you test it out in the field.

Here’s what a simple realistic budget would look like:

realistic budget

Pro Tip: Always set aside money for emergencies, as well as irregular expenses (I list these at miscellaneous in my budgets)

What about the 50/30/20 technique?

The 50/30/20 is a simple and popular approach to budgeting.

But it’s one I have mixed feelings about.

Here’s how it works:

  • 50% of your income goes to needs
  • 30% on wants
  • 20% on savings or debt

Keep in mind that the 50/30/20 technique isn’t something you must do. But it can be useful for people who’ve never put together a budget before.

How a 50 30 20 budget should look

Does 50/30/20 work for frugal living?

Yes, the technique works for frugal living, but approach it with caution.

Here’s why:

If we analyze the example budget from step 8 Put it your budget together, and classify the budget items into needs, wants, and savings & debt (as per the 50/30/20) we’d see this:

A 50-30-20 budget off the rails

Notice how the ratio of needs, wants, and savings & debts, isn’t 50/30/20, it’s more like 61/7/32.

Upon seeing something like this, you might feel like redoing your budget so it’s closer to 50/30/20.

But in terms of frugal living, this budget is fine – it addresses needs, wants, and debt; plus, there’s money allotted for savings.

If you redid this budget, you’d end up skimping important items like savings, visa payments, miscellaneous purchases, or even your groceries, trying to get a perfect 50/30/20 split.

And that’s not a good idea.

The bottom line: 50/30/20 is a good starting point, but it isn’t the law when it comes to budgeting.

How to Live Cheap: No-Fluff Frugal Living Tips

Easy frugal living wins

Let’s close off this ultimate guide with a collection of frugal living tips, tricks, and ideas I’m sure you’ll find useful.

Here’s what’s ahead:

  • Get motivated with simple frugal living ideas you can start right now
  • Explore frugal living habits from the Great Depression (that still work today)
  • How to make your broke college years feel a little richer
  • Find out what frugal living tips have the biggest impact

Ready to get frugal?

Simple Frugal Living Ideas: Easy Wins and Big Motivation

Motivation is a big part of frugal living.

And there’s no better way to get motivated than scoring a few quick wins.

So let’s prime your frugal mindset with these simple ideas and get your motor running.

1. Install Honey

Honey is a coupon-finding browser extension that scours the internet for discount codes and applies them when you’re checking out.

There’s lots of different money-saving apps out there, but as far as simplicity and usefulness, Honey is one of the best, it’s a big reason why PayPal bought the company in 2020.

Oh, and it’s free. So if that doesn’t get tickle your frugal-bones, I don’t know what will.

2. Cancel the thing (or things) you’ve been meaning to cancel

Sometimes it’s a streaming service you don’t use anymore.… But it’s probably a gym membership.

Odds are, there’s something you’re paying for that you haven’t used in ages (or at all).

Cancel it today, and finally get that monkey off your back.

3. Meal plan

Don’t know what to eat, so you order a pizza. That’s how it happens, right?

Try planning out your meals instead. It saves time and money, especially when you cook in bulk and freeze premade dishes

If you can cook, you can meal plan, simple as that.

4. Always have snacks

Bring a few snacks wherever you go because you never know when the munchies will hit.

And couple Nature Valley granola bars are a lot cheaper than street tacos.

5. Never pay full price

There’s always a coupon or a sale. Always.

As a frugal person, train yourself to be on the lookout for a deal and plan your shopping around it.

That said, don’t buy things just because they’re on sale, it has to be something you needed in the first place.

Pro-Level Frugal Living Tips from the Great Depression

Frugal living in the great depression

The Great Depression taught us timeless lessons in frugality that still apply today.

Here’s a modern look at some classic ideas:

1. DYI

Don’t pay for things you can do yourself. With the power of internet tutorials, and a little patience, you’d be surprised what you’re capable of.

2. If it’s broke, fix it

A bit of glue and some tinkering can save you in the long run. Plus it’s a good excuse pick up some practical skills like basic sewing and carpentry.

3. Stretch your meat (or do without)

Meatloaf was popular way to stretch out limited meat supplies during the Great Depression.

And even though it’s readily available nowadays, meat is still the most expensive part of any meal.

Bulking up cheaper cuts of meat with crackers, bread, mushrooms, beans, and spices is an easy and delicious way to make the most out of your meat, and save you money in the process.

Of course, you can always go “meat-free” for a few days of the week too.

4. Buy frequently used items in bulk

When it comes to things you use week in, week out, it’s better to buy in bulk at a cheaper unit cost.

Cleaning supplies, toilet paper, canned goods, coffee, pet food, shampoo, soaps, beans, and pasta are all great examples of items better bought in bulk.

If you have the freezer space, buying your meat in bulk when it’s on sale will save you a lot of money too.

6. Grow your food

Growing your own food is like a licence to print money, not to mention a worthwhile life-skill.

And with permaculture, community gardens, and sustainability movements becoming popular, there’s tons of opportunities to learn how to grow your own food.

Start simple with potatoes, tomatoes, peppers and herbs before venturing into difficult foods like carrots, onions, and lettuce.

7. Make do with what you have

Be resourceful.

Instead of buying something new to help solve a problem, see if there’s something you already own that’ll do the trick.

Get creative and think:

What would grandma do?

8. Use everything up

Whether it’s toothpaste or ketchup, use everything to the last drop – don’t waste a thing.

It might seem a bit cheap at first, but learning not to waste anything teaches you to be efficient with resources.

Frugal Living for College Students: Turn that C Average into an A+ Experience

Frugal living in college

College is the ultimate test for frugal living.

Not only are you broke already, but you’re expected to have zany experiences, “discover yourself”, AND get an expensive degree in the process.

Challenge accepted!

1. Unpopular opinion: go to a cheaper school

At the end of the day, a degree is a degree.

If you’re giving yourself an ulcer about getting into the best – and usually most expensive – schools remember this:

No one cares where you’re degree comes from, they only care that you have it.

Look at it this way:                             

Your degree is like the price of admission for entering your career – it’s your ticket to get in.

And since you’ll learn more on the job than in school, why pay a huge amount of money for your ticket when a cheaper one does the same thing?

2. A car in college is a money pit

Are you prepared to pay gas, insurance, registration, and repairs?

Sure, having a car is great, and you might even recoup some costs by asking your friends to pitch in.

But they’ll probably stop paying you after a while; remember, they’re just as broke as you (true story).

Look, college is one of those rare times when you don’t need car.

What’s more, in most college towns you can get to where you need to go on foot. And if not, split a cab or an Uber with friends.

3. Hunt for free food

There’s always some club, society, or cultural event that puts on a free spread.

Pay attention to flyers, emails, and your school newspaper and stay ahead of the game.

If there’s an event happening on campus, there’s probably free food in tow.

4. Buy used textbooks or rent online

Textbooks depreciate faster than sports cars and feel just as expensive.

Unless you no choice, buy your books used or rent the digital copy. You’ll end up saving 25-35% which, given the cost of textbooks, is a hefty amount of savings.

5. Sell your books

Don’t trick yourself into believing you’ll use them “for reference”.

After you pass the exam, you’ll probably never crack those books again.

True, you’ll only get a fraction of what you paid for them, but that’s the market: it’s beer money or bust.

6. Graduate on time (the ultimate college frugal living hack)

Do you know what’s more expensive than 4 years of college?

5 years of college.

The average cost of post-secondary education (tuition + expenses) in the US is $35,720 per student, per year. And that’s not even counting the interest on your student loans.

Plus, every extra year you’re in college is a year you’re not earning an income.

The Best of the Best: Frugal Living Tips with a Big Impact

Frugal living tips with a big impact

Looking for the best of the best?

The few frugal living tips that really pack a punch?

That’s what’s you’ll find here.

1. Have a budget

Think of a budget like a GPS in your car but for personal finance:

It monitors your progress, tells you when you’re off-course, and ultimately guides you to your destination.

You see, all the little things you do to save money, like buying used instead of new, or installing coupon apps (like honey), won’t matter if you’re overspending in other areas.

The bottom line: creating and following a budget is the most frugal thing you can do.

2. Go after the “big fish” expenses

Want serious results right off the bat?

Tackle your most significant expenses – the “big fish”.

By lowering these major expenses, you’ll see greater financial rewards faster.

Yes, the little stuff is important, but things like downsizing your home, or going with one car, makes a big impact immediately.

Tackling your major expenses is also very motivating. If you can handle the “big fish”, you can handle anything.

3. Annihilate debt and learn to hate it

Debt holds your happiness hostage.

If you have debt, focus on paying it off. And after achieving that milestone, reflect on how you amassed your debt in the first place.

As a frugal person, learn to hate debt.

It might sound extreme, but when you hate owing money, you make better choices with it.

4. Embrace your inner chef

Cooking at home is a huge part of frugal living because it saves thousands.

Think about how often you eat out – not just in restaurants, but the morning muffins, fancy coffees, and gas station sandwiches.

Now, also think about that little voice in the back of your head – the one that sounds suspiciously like your mother – reminding you that “You have food at home…”

Listen to that little voice, because it knows that the average American consumer spends about $288 per month dining out. 

That’s like taking 2 tropical vacations a year.

No amount of gas station sandwiches is worth 2 trips to the Bahamas.

5. “No”

When you find yourself falling under the spell of an impulse buy, or an advertisement so targeted there might as well be a bullseye on your chest, just say “No.”

Don’t weigh the pros, or the cons.

Don’t ask yourself “Do I really need this?” and start rationalizing.

Just say “No”.

You don’t need to justify your answer to anyone.

6. Invest in quality…When you have to

Lower quality items typically have shorter lifespans than higher quality items, but cost much cheaper.

If the item you’re buying is expected to last only a short time, buy the cheaper, lower-quality item.

But if it’s expected to last a longer period of time (think kitchen appliances), consider a more expensive, higher-quality option.

It doesn’t necessarily have to be the most expensive, high-quality option, just not a cheap, crappy one.

Where Will Frugal Living Take You?

Where will frugal living take you?

Freedom.

It’s what we all want and it’s what brought you this far.

But freedom isn’t something you work toward, freedom is something you fight for.

So let frugal living be your sword and shield.

Start simple:

  • Create and follow budget
  • Learn the magic of compound interest and invest in your future
  • Slay your debt, and keep it that way.

Every tip, trick, hack, and idea in this guide is a tactic to help you win.

So cast aside myths and misconceptions – you’re not a crazy coupon lady or a money-hungry hobgoblin hoarding treasure for the sake of it.

You’re someone who understands value of saving money for a better life.

Remember that, and frugal living will take you to freedom.

Author

Pat is a personal finance enthusiast and the Grandmaster behind dollarGuild. You'll often see him eating ketchup chips and arguing with himself... It's a strange method, but it gets the job done.

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