The Rules of Frugal Living

Have you had your financial wake-up call? You realize your debt is steadily (or quickly) growing and your income seems to be staying the same. You have dreams of a house, traveling or a new car, but have no idea how you are actually going to get there. It may be time for a frugal living lifestyle change.

Frugal living requires cutting back non-necessary spending, as well as keeping your actual bills and expenses as low as possible.  Frugal living can help you build up a savings and pay off your debts. The CGS Team is sharing what it takes to live a life of frugality and ultimately make financial progress.

Rule #1: Understand the Ins and Outs of Your Money

First and foremost, a person who lives frugally knows exactly how much they make, how much they spend on expenses, and how much they are saving.  To start living frugally, a budget or detailed outline of your income and expenses is a necessity.  When you know how much you make, you know how much you can spend.  If your expenses require more money than you make, lifestyle changes are needed ASAP.

Rule #2: Live Below Your Means

Most people live above their means. They rack up a ton of credit card debt, purchasing things they don’t want or need, and ultimately can’t afford.  If you aren’t living above your means, you may be living within your means.  You don’t spend more than you make, but you don’t have much leftover to save for make a true dent in your debt.

Living within your means is a great start to living below your means.  A frugal person lives below their means.  While they may be able to afford a nicer car or apartment, they are keeping their living costs as low as possible to save money. It takes some time to truly live below your means, so start by staying within the limits of your budget. Once you’ve mastered that, start cutting back additional purchases or services you don’t need to save money.

Rule #3: Get Rid of Debt Once and For All

Debt can make it extremely hard to live frugally and save money.  If you do have extra income left after your spending and living expenses, it’s likely going towards paying down your debt. This puts you in a position of limited savings.  Get rid of your debt once and for all to live a life of frugality!

Focus your energy on cutting back certain expenses to help pay your debts off faster.  Once you get yourself out of debt, keep that same living style.  Instead of large payments going towards your debts, they should go towards your savings. Read 5 Steps for Paying Down Debt to learn how to get out of debt.

Rule #4: Know the Difference Between a Want and a Need

An effective way to cut back unnecessary spending is to limit your purchases to needs-only.  In order to do that, you need to be able to tell the difference between an actual want purchase and an actual need purchase.  If the product or service is not something that is required to live life, it may not be a need.

Things like groceries, water, power, a coat for winter are examples of need items.  Items like restaurant dinners, three coats for winter, or monthly waxes are want items.  Don’t convince yourself that a want item is something you need.  You must be able to tell the difference to master frugal living.

Rule #5: Plan and Save for Your Goals

A frugal person doesn’t drop everything, charge a plane ticket on their credit card and whisk off to some tropical location.  A frugal person plans for the things they want to do, and actually saves towards them.  To live frugally doesn’t mean you can’t do the things you love.

It means you can save and allocate money to pay for those things, without resorting to credit.  Nothing beats a vacation that is fully paid for prior to going.  A terrible feeling typically takes over when you return from vacation to find a maxed out credit card.

Related: 9 Frugal Habits to Implement Now

Frugal living should not be mistaken as living a life of cheapness.  It means you live under your means, save for the things you want, and avoid debt at all costs.  To truly get financially ahead in life, these things are crucial.  How do you keep your spending and living expenses low? Do you consider yourself frugal? Leave a comment below to share your thoughts!

-The CGS Team



4 thoughts on “The Rules of Frugal Living”

  1. I’ve definitely had the misconception that living “frugally” means someone is a stickler with their money, in other words a cheapskate. That’s not the case. Living frugally means being smart with your money, even if that means staying home instead of going on a lavish vacation that you can’t afford. I definitely strive to make my money work for me, and more importantly, keep my money where it should be. Great read.

  2. I love this article! I also coupon to help me save on items that I’m going to purchase anyways. Learning how to coupon properly (and yes, there strategic ways to help with that) can also help save lots of money – in fact, you can even get money back from grocery stores. There are also apps to help get rebates and save even more. I use Ibotta – that one seems to be the best grocery store rebate app, and I’ve been using a few different ones.

  3. I joined our local Gleaners group; for a yearly fee and a few volunteer hours a month my family gets fresh produce/meats/dairy and bakery goods – depending on what has been donated by the day. Each member gets three shopping days a week. The Thriftstore are items donated from garage sales and store close outs. It’s great when frugal living is bigger than just your personal circle.

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