How to Make Frugal Living a Habit

Posted by Sydney Butler on May 20th, 2021

What is frugal living?

Frugal living is a lifestyle that emphasizes more strict money management and tries to eliminate unneccessary spending wherever possible. Beyond necessities, a person who lives frugally will carefully consider their discretionary spending budget and how it should be spent. Instead of impulse purchasing and buying everything they want, a frugal person will weigh the benefits and downsides, reprioritizing their savings goals and debt payoff goals over buying things they just want and don't need. 

Why Frugal Living Is Hard...At First.

Frugal living is not for the faint of heart, but it a frugal lifestly can be adapted to suit nearly everyone, including you. To live frugally doesn't mean to stop spending on everything. Rather, it's a spectrum. And getting that spectrum right is the hard part.

See, we easily fall into harmful spending habits and attitudes about money and debt that impact our daily lives. Changing these aspects of ourselves is incredibly difficult in the beginning.

Just like making exercise a habit, frugal living won't just become your new norm tomorrow. You'll need to continually check in with yourself, be honest about what you're purchasing and why, and learn to automatically stop spending on unneccessary items.

And that's another big challenge with frugal living: what's an "unnecessary" purchase?

This might sound like a simple question, but your answers now will be entirely different to the ones you give after adopting a frugal lifestyle. What's "necessary" and "unnecessary" today are determined by your definitions of those words, and frugal living will redefine those for you. 

5 Tips to Make Frugal Living a Habit

1. Embrace "FREE"

If you've ever worked as a cashier, or stood in line behind someone with baggies of coupons to sort through (always at the last minute), then these penny-pinching people are probably what comes to mind when you picture "frugal" individuals. Yes, those penny-pincher, coupon-cutting people are diligently saving money this way, but it doesn't have to be part of your newfound frugal lifestyle if you don't want it to be.

And in fact, there's an even better way to save money and live frugally: by taking advantage of free stuff.

Free stuff is everywhere, you just have to look for it and put it a little bit of work (emphasis on little bit). For example, it's widely known that some Amazon sellers will direct ship free products to you to avoid storage fees. 

And when you open new store loyalty cards, you sometimes get free stuff. Or, when you open a brand new bank account and get sign up bonuses, some even over 0!

Freebies are out there, people. And with your new frugal habits, it's time to seize these opportunities. 

2. Reassess Your "Needs" and Wants

Mistaking "needs" for wants is human nature. It's hard to say no to our brain when it wants X right now, no matter the cost. Like that fancy new iPhone, 4K television, or Playstation 5. I mean, you just neeeed these things, right? Because how could you possible live without them?

Well, when you start your frugal living journey, you'll need to grapple with and rethink what's actually worth spending money on and what you actually need to not just survive, but live comfortably. 

Yes, you might want that new iPhone because its got a better camera and cool design to it, but unless your current iPhone is busted up and the battery doesn't last a full day, then it's not a "need" it's a "want." Period. 

With frugal living, you'll return to thinking of these two words in their literal meaning. Every dollar spent is spent purposefully. 

3. Track Your Spending

There's absolutely no way to know where our money goes unless we track it. And if you're thinking, "well, I can log on to my bank account and see everything I spent money on, why do I need to track it some other way?", then I've got news for you:

You're not tracking your spending.

Your bank is logging your transactions, but YOU are not carefully considering where you money is going. You're just passively revisiting purchases you've already made, in many cases, without thinking. 

So to make frugal living your new lifestyle, you need to track every dollar spent to ensure you're spending wisely and meeting your savings and debt payoff targets. Get a budget printable, download a budgeting app like Personal Capital or YNAB. Whichever way works for you, just make sure you do it. 

4. Try No-Spend Days, Weekends, or a Month!

Not spending money for an entire day sounds easy. But you'd be surprised how challenging this is for most of us. 

Now extend that through a whole weekend, or even 30-day no-spending spree. Yeah, it's pretty difficult. 

But, doing no-spend days or no-spend challenges where you ban purchasing certain items, is an excellent way to recalibrate your spending habits.

For example, if you "can't live without" Starbucks, then do a no-spend week where you can't buy anything there. In doing so, you'll become more resourceful and figure out other ways to make your morning brew (and cheaper ways!).

Basically, when you cut something out of your spending entirely, you naturally discover one or more of these things:

A. You didn't "need" it in the first place.

B. There are cheaper ways to get the same thing.

C. You don't "need" to spend money on it as often as you did before. 

5. Get Everyone on Board

To really succeed at frugal living and boost your savings, everyone in your household MUST be on board. If you're tracking household spending, then others need to inform you. If you're not buying X anymore, then your partner needs to stop too. With shared expenses and shared bank accounts this is especially true. 

That's not to say that you can't "go it alone" and focus solely on yourself and your money management, that's okay too! 

But in reality, just like with dieting and healthy eating, it's really hard to resist sliding back into old habits when the people around you aren't supportive. 

So make sure you talk to your partner, your children, whoever else lives with you, and tell them why you've decided to live frugally, what your goals are, what benefits it can bring them too, and set some ground rules. This will ensure you're successful.