How to live frugally: A complete guide to saving money

Struggling to make ends meet or save for the future? How to live frugally transforms your finances with practical, easy-to-follow strategies.

This guide covers everything from budgeting and DIY projects to low-cost entertainment, helping you save money while living a fulfilling life. If you’re looking for real-life examples and discussions, browsing how to live frugally Reddit threads can give you insights from people already practicing this lifestyle.

Whether you’re on a tight budget or aiming for financial independence, discover frugal living tips to start today.

1. What is frugal living?

Frugal living is a purposeful approach to managing resources, focusing on maximizing value while minimizing wasteful spending. It involves making thoughtful choices about how money, time, and resources are used to create a fulfilling life without excess. 

Unlike simply cutting costs, frugal living emphasizes prioritizing essential needs, seeking cost-effective alternatives, and finding creative ways to stretch resources. Understanding frugal habits meaning that it’s about conscious spending and maximizing value, not about deprivation. This lifestyle empowers individuals to achieve financial goals, reduce stress, and live more sustainably.

See more: How to Budget with Irregular Income: 8 Practical Steps

2. How to live frugally with 17 savings tips

Frugal living isn’t about being a cheapskate or cutting out all fun; it’s about making smart choices that help you stretch every dollar while enjoying life. My own wake-up call came a few years ago when a single, unexpected medical bill left my savings account practically empty. That moment forced me to get serious about how to live a frugal lifestyle, not as a form of punishment, but as a tool for rebuilding my financial security without sacrificing my quality of life.

In this section, you’ll discover how to:

• Build a realistic budget and prioritize needs over wants.
• Declutter, sell unused items, and shop strategically for groceries and clothing.
• Cut down on transportation, energy, and household expenses.
• Cook affordable meals, enjoy low-cost entertainment, and use free community options like exercise classes or libraries.
• Limit subscriptions while taking advantage of loyalty programs and rewards.

These frugal living tips from the Great Depression still hold value today, which will help you save daily, live a more sustainable lifestyle, and achieve long-term financial stability without giving up the things that matter most.

2.1. Create a realistic budget

A budget is the foundation of frugal living, giving you control over your finances. Start by recording all income and tracking expenses for a month to spot spending habits. A zero-based budget assigns every dollar a purpose, such as rent, groceries, or savings, ensuring nothing is wasted. 

Start by tracking every dollar in and out for one month. The real power of this exercise is that it uncovers the "financial leaks" you might not even know exist, like that third coffee of the day or the subscription you forgot you had. Once you see where your money is actually going, you can redirect it with purpose.

Budgeting Tool	Features	Cost	Best For
Google Sheets	Customizable templates, shareable	Free	DIY budgeters
EveryDollar	Zero-based budgeting, goal tracking	Free basic version	Beginners
YNAB	Real-time tracking, debt payoff tools	Paid (free trial)	Detailed planners

2.2. Prioritize needs over wants

Frugal living means spending on what matters most. Divide expenses into essentials (housing, food, utilities) and non-essentials (movies, gadgets). Before buying non-essentials, wait 48 hours to decide if the purchase aligns with your goals, like saving for a vacation or paying off debt. This pause curbs impulse buys and keeps your spending focused.

Ask yourself:

• Does this purchase support my long-term goals?
• Can I find a cheaper or free alternative?
• Will I regret this expense in a month?

This mindset shift is essential for those learning how to live more frugally. Focusing on needs over wants ensures your money supports a meaningful life, whether that’s financial freedom or personal growth. For example, choosing a home-cooked meal over dining out saves cash for bigger priorities.

2.3. Declutter and monetize unused items

Clearing out unused items boosts savings and simplifies your space. Every three months, sort through belongings like clothes, books, or old electronics. Sell usable items on platforms like eBay, Poshmark, or local Facebook groups to earn extra cash. For items that can’t be sold, repurpose them creatively: turn old jars into storage containers or worn shirts into cleaning rags.

Steps to declutter and save:

1. Set aside a weekend to review one room at a time.
2. Sort items into “keep,” “sell,” or “repurpose” piles.
3. List sellable items online within a week to maintain momentum.
4. Use earnings to boost savings or pay off debt.

Why bother? Decluttering reduces the temptation to buy duplicates and fosters a minimalist mindset, key to extreme frugal living. It’s a win-win for your wallet and home.

2.4. Shop strategically for savings

Your journey to significant savings doesn't always start in a high-end retail store. Instead, learn to seek out secondhand treasures at thrift stores, garage sales, or on apps like Mercari for everything from clothes to furniture.

Buy off-season items, like winter coats in spring, to score discounts and use tools like Honey or CamelCamelCamel to help compare prices and track deals, ensuring you never overpay.

Shopping Hacks:

• Check thrift stores on restock days for the best selection.
• Set price alerts on Amazon to catch sales.
• Join local swap groups to trade items for free.

2.5. Optimize grocery spending

The grocery store is one of the easiest places to overspend, but it's also where you have the most control. To master your food budget, start by planning a week’s meals in advance and sticking to a shopping list. Cook in bulk, like soups or casseroles, and freeze portions to prevent waste. Shop at budget stores like Aldi or use grocery apps for digital coupons and loyalty rewards.

2.6. Reduce transportation expenses

Cutting transportation costs is a key way to live on a low budget, especially for tight monthly budgets. This is especially important if you’re figuring out how to live frugally on one income, where every dollar saved matters.

Instead of driving for short trips, walk, bike, or use public transit to save on fuel and reduce wear on your vehicle. Regular vehicle maintenance, such as checking tire pressure or changing oil on schedule, prevents costly repairs down the line.

How to start saving:

1. Map out weekly trips to combine errands and reduce driving.
2. Research local bus or train passes for cost-effective commuting.
3. Schedule monthly car check-ups to catch issues early.

Why it works: Transportation is often a major expense, but small changes like biking or carpooling can save hundreds annually, helping you stick to a budget on a low-income example of $1,000 a month.

2.7. Use free community resources

Tapping into community resources supports a frugal lifestyle without sacrificing access to goods or entertainment. Libraries offer free books, audiobooks, movies, and even tools like gardening equipment, eliminating the need to buy. 

Attend free local events, such as community festivals, museum free-admission days, or park concerts, for low-cost fun. Join Buy Nothing groups on platforms like Facebook to exchange goods, such as clothing or household items, for free.

Why it’s effective: These resources provide access to essentials and entertainment at no cost. Libraries and community groups foster a sense of connection while saving money, aligning perfectly with frugal living tips.

2.8. Save on clothing and accessories

Frugal shopping for clothes supports extreme frugal living by keeping costs low. You can take this further by following extreme frugal living tips, such as making your own clothing from repurposed fabrics. Shop at consignment stores or online platforms like ThredUp for high-quality, gently used clothing at a fraction of retail prices. 

Learn basic sewing skills to mend tears or hem pants, extending the life of your wardrobe. Build a minimalist wardrobe with versatile pieces, like neutral tops and jeans, to reduce the need for frequent purchases.

Wardrobe savings ideas:

• Swap clothes with friends to refresh your style for free.
• Shop clearance racks at thrift stores for designer finds.
• Watch YouTube tutorials to learn simple repairs like sewing buttons.

2.9. Cut personal care costs

Frugal living extends to personal care by focusing on affordable alternatives. Make homemade cleaning products using ingredients like vinegar, baking soda, or lemon juice for effective, low-cost solutions. 

Buy generic toiletries or bulk items from warehouse stores like Costco to save on essentials like shampoo or toothpaste. Extend the time between haircuts by maintaining simple styles or learn to trim your hair at home with online tutorials.

Discover more:

• 13 best cashback apps to maximize your savings
• Pay yourself first method: Budget strategy explained
• How to create a personal budget in 7 simple steps

2.10. Adopt energy-saving habits

Saving on energy costs is a powerful way to live frugally, especially when managing a tight budget. Unplug electronics like chargers, TVs, or kitchen appliances when not in use to eliminate phantom energy costs, which can add up to $100–$200 annually. 

A programmable thermostat allows you to adjust heating and cooling based on your schedule, reducing utility bills without sacrificing comfort. Washing clothes in cold water and air-drying them on a clothesline or rack cuts electricity usage significantly.

Energy-saving actions:

1. Conduct a home energy audit to identify wasteful devices.
2. Set your thermostat to 68°F in winter and 78°F in summer.
3. Use a drying rack for laundry to save on dryer costs.

2.11. Practice mindful spending habits

One of the most overlooked ways to live frugally is by practicing mindfulness. Mindful spending answers the question “how do I live frugally?” by helping you avoid unnecessary purchases. Delete shopping apps and unsubscribe from marketing emails to reduce temptation from constant sales and promotions.

Using cash for daily purchases, such as groceries or coffee, makes spending feel more tangible and keeps you within budget. Tracking small expenses like snacks or coffee runs helps uncover hidden savings opportunities. As James Clear writes in Atomic Habits: “Habits are the atoms of our lives, each one a fundamental unit that contributes to your overall improvement.”

Mindful spending checklist:

• Review your phone for shopping apps and remove them.
• Set a weekly cash budget for discretionary spending.
• Log small purchases in a notebook or app for a month.

Ask yourself:

• Do I need this item, or am I reacting to a sale?
• Can I wait a week before buying to test its importance?
• How many small expenses could I redirect to savings?

2.12. Leverage loyalty programs and rewards

Using loyalty programs and rewards maximizes savings, making it easier to live frugally and save money. Sign up for free loyalty programs at grocery stores, pharmacies, or gas stations to earn points or discounts on regular purchases. 

Choose credit cards with rewards, such as cashback or points, but pay off the balance monthly to avoid interest charges. Redeem rewards for necessities, such as groceries, gas, or household items, to stretch your budget further.

How to maximize rewards:

1. Join free programs at stores you frequent, like Kroger or CVS.
2. Use a cashback card for essentials and pay it off immediately.
3. Redeem points for gift cards to cover groceries or gas.

Savings example: A 2% cashback card on $500 monthly spending saves $120 a year, while loyalty discounts can cut grocery bills by 5–10%. Always read program terms to avoid hidden fees.

2.13. Cook creatively to save

Creative cooking reduces food costs, a cornerstone of extreme frugal living. Rely on pantry staples like rice, beans, or pasta to create affordable, filling meals instead of eating out.

Transform leftovers into new dishes, such as turning roasted chicken into soup or rice into fried rice, to minimize waste. Host potlucks with friends to share meal costs while enjoying social time.

Why it Saves: Cooking at home can cut food costs by 50% or more compared to dining out. For example, a $10 homemade meal for four replaces a $40 restaurant bill. Meal prepping, bulk buying, and reducing food waste are also extreme frugal ways to save money that can slash your grocery bills even further.

Read more article related:

• How to budget on a low income
• How to stop living paycheck to paycheck
• Leverage trading for beginners

2.14. Cut household expenses

Reducing household costs is essential to living comfortably on a low income. Unplug devices like TVs, chargers, or coffee makers when not in use to eliminate phantom energy, which can account for 5–10% of your electricity bill. Switch to LED bulbs, which use 75% less energy than traditional bulbs and last up to 25 times longer. 

Insulate windows and doors with weatherstripping or foam tape to prevent heat loss, keeping heating and cooling costs low. Choosing affordable housing, such as a smaller apartment in a cost-effective neighborhood, can significantly lower monthly expenses.

Practical steps to save:

1. Unplug electronics at night or use a power strip for convenience.
2. Replace one incandescent bulb with an LED each month to spread costs.
3. Research rental prices in nearby areas to find budget-friendly locations.

Real experience: Switching to LED bulbs in my apartment saved $60 a year on electricity, and moving to a smaller unit in a less pricey area cut my rent by $150 a month. These small changes added up to over $2,000 in annual savings, making it easier to live on a tight budget.

Cost Area	Savings Strategy	Annual Savings (Approx.)
Electricity	Unplug devices, use LEDs	$60–$200
Heating/Cooling	Insulate windows/doors	$80–$250
Housing	Choose affordable location	$1,000–$3,000

Ask yourself:

• Which devices in my home are always plugged in?
• Can I afford to live in a cheaper area without sacrificing safety?
• How much could I save by switching to energy-efficient lighting?

2.15. DIY home projects

Frugal DIY projects empower you to maintain your home without breaking the bank. Explore free online videos to learn skills like unclogging drains or repairing drywall, cutting the need for expensive professionals. 

Transform old furniture with budget-friendly supplies, like a $10 can of paint or new drawer pulls, instead of buying new. Craft decor from everyday items, such as turning glass bottles into vases or old fabric into throw pillows, for a unique, low-cost aesthetic.

Creative DIY Ideas:

• Fix a squeaky door with a $2 lubricant spray instead of hiring a handyman.
• Refinish a thrift-store chair with $15 sandpaper and stain for a custom look.
• Create a photo frame from cardboard and twine for under $3.

Why it’s effective: DIY repairs and upcycling can save $500–$1,000 annually by avoiding professional services or new purchases. For example, fixing a faucet yourself saves $100–$200 in plumber fees. These projects also build skills, boosting confidence in extreme frugal living.

DIY projects can save $400–$2,000 a year by avoiding repair fees and new purchases. For example, the handful of dollars you spend on supplies to patch a small hole in drywall yourself can save you the $150 or more that a professional would charge for the same minor job. These skills build confidence and make your home uniquely yours, aligning with frugal living’s creative spirit.

DIY Task	Cost	Savings vs. Professional/New
Drain unclog	$5–$10	$80–$150
Furniture refinish	$10–$25	$100–$700
Homemade decor	$0–$5	$30–$100

2.16. Enjoy low-cost entertainment

A frugal lifestyle thrives on creative, budget-friendly activities that spark joy. Gather friends for a potluck movie night using free library DVDs or a shared streaming account, saving on restaurant or theater costs. 

Spend time outdoors with free activities like nature walks, community yoga in the park, or scavenger hunts with family. Access free entertainment through platforms like YouTube, library apps, or free trials of ad-supported services like Freevee.

Low-cost activity ideas:

1. Borrow board games from a library for a family game night.
2. Plan a sunset picnic with homemade snacks at a local park.
3. Stream free educational talks or concerts on YouTube.

2.17. Limit subscriptions and memberships

Review your monthly charges for services like streaming, magazines, or gym memberships, and cancel those you use infrequently. Share accounts like music or video streaming with trusted friends or family to split fees, ensuring compliance with platform rules. 

Subscription savings plan:

• Track all subscriptions in a notebook or app like Rocket Money.
• Contact providers to ask for discounts, like student or loyalty rates.
• Test free alternatives, like park workouts, before renewing memberships.

See also:

• Smart weekly budgeting tips every beginner should know
• Save $500 this month with 15 budget challenge ideas

3. Avoiding common frugal living mistakes

I wasn’t always smart about frugal living. In the beginning, I made several well-intentioned but misguided choices, like buying cheap items that wore out quickly or cutting back so harshly on essentials that it affected my health and productivity. 

I thought I was saving money, but in reality, I was creating more problems down the line. That’s why I want to share some of the common frugal living mistakes I personally experienced, so you can avoid the same pitfalls and build a more balanced, sustainable approach to saving.

3.1. Don’t fall into toxic frugality

Understanding what toxic frugality is key to living frugally without harming your life. Cost-cutting becomes toxic when it negatively impacts your health, relationships, or mental well-being, such as skipping medical checkups to save money or avoiding social gatherings to cut costs. 

Balance frugality with quality of life by setting boundaries, like allocating a small budget for meaningful activities with loved ones. Invest in high-quality items for daily use, such as durable shoes or a supportive mattress, to avoid frequent replacements and ensure comfort.

My friend used to try to save money by buying cheap sneakers, but they wore out in three months, costing more in replacements. Switching to a $60 pair that lasted two years saved her $100 over time. Prioritizing quality for essentials and small social outings kept me energized, proving frugality should enhance, not drain, your life.

Three ways to avoid toxic frugality:

1. Set aside $10–$20 monthly for self-care or social activities.
2. Choose quality over price for daily essentials like cookware or bedding.
3. Check in with yourself monthly to ensure frugality feels sustainable.

Ask yourself:

• Am I cutting costs that affect my health or happiness?
• Can I afford a small treat to stay motivated?
• Which daily items deserve a quality investment?

3.2. Plan for irregular income

Build a small emergency fund, aiming for $500–$1,000, to cover unexpected expenses like car repairs or medical bills. Create a flexible budget that adjusts to income fluctuations, prioritizing essentials like rent and food while scaling back discretionary spending in lean months. Avoid lifestyle inflation by saving extra income during high-earning periods, such as freelance gigs or bonuses, instead of increasing spending.

View more:

• What is Leverage in Trading? A Complete Beginner’s Guide
• Minimalist budgeting method: Cut costs without stress
• Emergency fund calculator: How much do you really need?

4. FAQs about frugal living

5. Conclusion: Embrace frugal living for a better future

Mastering how to live frugally unlocks financial freedom and peace of mind by prioritizing mindful spending and resourceful habits. Strategies like budgeting, DIY projects, and low-cost entertainment help you save money while maintaining a fulfilling lifestyle.

Begin with one or two frugal living tips, such as tracking expenses or cooking at home, to build momentum toward your financial goals. Over time, these small steps will turn into a daily frugal living routine that feels natural and sustainable. Embracing a frugal lifestyle empowers you to reduce stress, pay off debt, and focus on what truly matters.

How about you? Share your top frugal living tips in the comments, or subscribe to our newsletter for more savings ideas. Dive deeper into financial strategies by exploring the Strategies section and Cash Flow & Saving Strategies at H2T Funding for expert guidance on budgeting and wealth-building.

Sources:

• Frugal Living Comprehensive Guide: 37 Ways to Find Serious Savings - https://www.nerdwallet.com/article/finance/frugal-living-guide