Frugality: Explanation & Top Frugal Living Tips

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Zina Kumok writes about financial planning for Wealthsimple. She has eight years investing experience and five years experience as a personal finance writer. Her work has been featured in Investopedia, DailyWorth, MoneyUnder30 and DollarSprout. Zina runs a personal finance blog called and she has been a two-time finalist for ‘Best Personal Finance Contributor’ at the Plutus Awards. She has a Bachelor's degree in Journalism from Indiana University.

In a world where prices are increasing and wages are stagnating, making extra money or having a side hustle is a major topic right now. It seems like almost everyone has something they do on top of their day job.

But making more money is only a stopgap if you don’t know how to spend your money wisely. It doesn’t matter if you make an extra $200 a month but don’t stop to save or invest the money. Read below for tips on how to build your own frugal life.

What is Frugal Living?

To many people, living frugally sounds like clipping coupons, shopping at thrift stores, and staying in instead of going out. But frugal living is bigger than that.

Frugal living means being conscious of your spending and focusing on a few financial priorities. A consumer who wants to live frugally should think about their main goals and how changing their finances can help them reach that goal. A teacher struggling to pay off her student loans can look into getting roommates, tutoring during the summers, or living in a low-cost city. A doctor who dreams of retiring at 40 can consider living a more modest lifestyle instead of buying a $1 million house.

There’s no clear path to frugal living. It’s a general lifestyle that encourages people to give up what they don’t really care about to have more for what they really want. Sometimes it means spending more time to save money, but it can also mean spending money to buy yourself time. It all depends on what your personal priorities are.

Frugal Living Tips

Even though frugal living doesn’t have a single definition, there are a few methods and strategies you can implement.

Track Your Expenses

Before you embark on a frugal living journey, you need to know where your money is going. Only then can you decide where it should be channeled.

Start by choosing a budgeting method, like an app, bullet journal, or spreadsheet. It might take some to find the best fit if you’ve never budgeted before. Start by just tracking how much you spend and dividing those transactions into categories.

After a month or so, look at your expenses and see what surprises you. Most people are shocked to find out how much their daily lunch habit or their weekly happy hour costs.

Once you know how you spend your money, you can decide what changes to make. Some, like bringing your lunch, are easy to fix. Others, like eliminating your car payment, are harder to implement.

Start where you are and don’t get bogged down if you struggle to spend less. Changing your financial habits to live frugally is a huge lifestyle decision, like exercising or eating healthy. Don’t be discouraged if it takes weeks to see results.

Refinance Your Loans

An easy way to save money on your debt is to refinance your loans for a lower interest rate. It can make a big difference.

Make a list of your debts and see if you can refinance them. If you refinance the loan and the monthly payment is now lower, keep making the same payments as you were before. You’ll pay off the debt faster and pay less interest total. If you start making lower payments, you might end up actually paying more in interest than if you hadn’t refinanced your loan.

Downsize Your House

Housing is usually the biggest line item in a budget. If you can cut your housing costs, you’ll have more money for other things like travel, retirement, or starting your own business.

If you’re a renter living alone, consider adding a roommate or two. If you own your house, see if renting it on Airbnb is an option. If your housing costs make up more than 25-30% of your budget, consider moving. The more you spend on your home, the less you’ll have for other major priorities.

For anyone looking to move or buy a new home, consider the cost of upgrading. If you have a bigger place, you’ll pay more in utilities. You might also have to get new furniture or decor. Property taxes are also another important consideration.

Look for Used Options

Shopping used is one of the most timeless frugal living tips, whether it’s about buying a used car or used clothes. Almost everything is cheaper when it’s not new, and you can often find used options that work just as well.

Some less-common examples include buying used furniture, home decor, kitchen accessories and appliances, kids’ clothes, and more. Buying used doesn’t necessarily mean scrounging at yard sales on the weekends. It can mean shopping at consignment stores, where you can find high-end designers for low prices. It can mean checking neighborhood groups for people getting rid of, say, a perfectly good stand mixer for $5.

You could also join free and recycle groups, where people will give away items they’re getting rid of. You can save a lot by checking these groups first before buying something full-price.

Buy Discount Gift Cards

Most of us shop at the same retailers. We go to the gas station, grocery store, or drugstore and swipe our debit or credit card.

An easy way to save money at the store is to buy discounted gift cards and use those when you shop. Sites like GiftCardGranny and sell gift cards for up to 20% off. If you buy gift cards for places you normally visit, you’ll save money without changing your spending habits.

Sometimes you won’t find a discount gift card for the specific retailer you’re looking for, so it’s good to plan ahead. Make sure not to buy any gift cards unless you had already planned to use them. If you buy a gift card for something you don’t need because it’s 10% off, you’re not saving any money.

Meal Plan

Groceries can be the biggest variable expense in a person’s budget. It’s not uncommon for families to spend hundreds of dollars on groceries, not realizing there’s a better way.

Meal planning can save money on food while eliminating waste. To meal plan effectively, go through your fridge, freezer and pantry and see what you have. Try to plan meals around what you already own instead of buying all the ingredients. For instance, if you have a box of pasta, plan a meal around that.

Eating meals based on what you already have saves you money and forces you to get creative. Got a carton of eggs and diced tomatoes? Make a Middle Eastern-inspired shakshuka dish. Have bread and ground beef? Make homemade meatballs.

Meal planning also means eating out less. This can help you eat healthier save money

Invest Your Money

Many consumers are scared of losing their money, especially if they’ve worked hard to save and earn it. Investing your money is key to building wealth and making your money work for you.

You can invest your money in a retirement account like an RRSP and choose funds that will grow over time. Investing means taking a risk that the value might go down, but that you’ll end up making more.

Investing is the only way to save enough to outpace inflation, which is between 2-3%. If you save money in a bank account, you’ll likely not earn enough to beat the inflation rate. This means your money will be worth less each passing year. If you invest the money and earn 7-8%, your money will start to earn interest that will then earn more interest.

You should start investing as soon as possible, because time is a crucial factor to building a solid nest egg. The earlier you start investing, the less you have to scrimp and save. Even putting away $50 a month adds up over time.

Compare Prices

Most people rarely switch brands and companies unless they have a good reason. This makes it easy to shop, but also easy to pay more than you realize.

Every quarter, go over your bills for internet, cell phone, and insurance providers. Compare prices to other companies and see if you can find a better deal. You might be surprised at how much money you can save by switching. You can also call your current provider, tell them what rate you’ve been offered and then ask them to match it. Many will give you that same price to keep you as a customer.

You should also start comparing brands for groceries and household items. Look at the quantities and make sure you’re not paying the same for a smaller amount. This requires some investigative skills, so dig deep. .

Frugality Blogs Worth Following

Living frugally can be hard without a little guidance. Following frugal living blogs can ease the way, keep you motivated and show you new ideas. Check out these popular frugal living blogs for inspiration:


Liz, also known as Mrs. Frugalwoods, writes about homesteading in Vermont on her blog. She shares her passion for gardening, raising kids and eschewing typical things like haircuts and manicures.

The blog describes a simple life, but one that the Frugalwoods are proud to live. Even if you can’t envision leaving behind city life for a farm, you can still benefit from reading Liz’s blog. She shares her frugal philosophy in a relatable way that doesn’t feel condescending.

You’ll learn about living frugally and how it relates to minimalism, being more sustainable, and caring about the environment. Mrs. Frugalwoods doesn’t approach frugal living in a vacuum. She cares about how a dollar saved now is a dollar invested and how avoiding buying clothes helps the world as a whole.

Afford Anything

Paula Pant lives by one motto, “You can afford anything, but not everything.” A former journalist, Pant lived a frugal lifestyle and scrimped so she could take a two-year backpacking trip to Asia and Australia.

Now, Pant teaches others how to live frugally, invest, and build passive income so they can reach financial independence. Her blog isn’t filled with cheap recipes or DIY hacks, but it is filled with motivation and inspiration. Pant wants people to examine what they really want from their lives and how being frugal can help them get there.

Don’t visit Afford Anything if you want tips on cutting your grocery bill, but check it out if you’re interested in building a solid investment portfolio and leading an untraditional, frugal life.

Lauren Greutman

Author of “The Recovering Spender,” Greutman is a mother of four trying to live life on a budget. Her blog includes frugal recipes, tips on frugal living with kids and creating a successful budget.

She gets into the nitty-gritty of budgeting, with questions like: Should you shop for groceries every week or once a month? And: How many presents should you buy for Christmas? Her advice is perfect for large families trying to make big changes.

Her blog also includes ways to make more money, like reviewing work-from-home opportunities or how to sell items you own. Greutman also has her own personal finance planner and course, for those ready to take their financial skills to the next level.

Last Updated April 30, 2020

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