Practicing frugal habits can help you spend less, save more and reach your financial goals faster. But what does it mean to be frugal, exactly? How do you do it? And most importantly, where should you start? We'll consider what a frugal lifestyle looks like and which thrifty habits may work best for you.
What Does "Frugal Living" Mean?
If you were to ask 10 people what it means to live frugally, you'd probably get 10 different answers, ranging from never buying anything to being an extreme couponer. The word "frugal" just means using money and other resources economically. So, frugal living is being wise with your money, time and other resources—which can look different for everyone.
12 Tips for Frugal Living
What does frugal living look like for you? While clipping coupons is one penny-pinching habit, it may not be your first choice, depending on your preferences. Fortunately, there are many ways to adopt a frugal lifestyle. Consider which of these frugal habits work for you and your financial goals.
1. Choose quality over quantity
Living a frugal lifestyle means approaching your spending a little differently. And one of the most impactful shifts is to focus on the quality of your possessions rather than the quantity. Purchasing higher-quality clothing, furniture, appliances and so forth often means they will last longer. And replacing your things less often means spending less and saving more money in the long run.
So, rather than having tons of fast-fashion clothing that only lasts one season, buying well-made wardrobe staples that can work in multiple seasons and last for years can be more cost-effective. Purchasing higher-quality goods may cost more up front than items of a cheaper quality, but you'll save more in the end. Just think: Buy less; buy better.
2. Prioritize value over price
One of the misconceptions of frugal living is that you should always buy the cheapest item, no matter what. But similar to focusing on quality, living a frugal lifestyle also means prioritizing value over price. So when you spend—whether on physical items or services—focus on what you get for your money instead of just the cost.
Prioritizing value can mean paying up front for a full year of an online subscription rather than going for the monthly rate because the annual price is the better deal. It might mean shopping in bulk and spending more initially for a lower per-item price. When you focus on the value of a product or service rather than just the cost, your dollars can stretch further.
3. Use credit wisely
Frugality is all about living below your means. So if you use credit, use it for convenience rather than to purchase things you can't afford and rack up overwhelming debt.
Also, be strategic about credit card usage. If you practice healthy habits—like keeping an eye on your credit utilization, making purchases you've budgeted for and paying your balance off every month—you can leverage credit cards to save you money. For example, the Synchrony Premier World Mastercard® has no annual fee and offers cash back on every purchase automatically. Getting money back on your everyday purchases (including utility bills) can be a smart way to maximize your budget and reduce your bottom line.
4. Declutter regularly
A hallmark of the frugal lifestyle is only to purchase—and keep—what you need. One way to ensure this is to declutter your belongings consistently. Keeping your possessions organized and decluttering often will help you know exactly what you have. This way, you can avoid buying duplicates and notice if you're accumulating too much of one thing.
To put this habit into practice, consider purging quarterly or at another regular interval. Or adopt the “one-in, one-out" rule: If you buy a new item of clothing, you get rid of one item of clothing.
Decluttering routinely can help you keep the clutter at bay without it being a huge chore. Also, selling the items you get rid of can offset their original purchase price and bring in additional income.
5. Use a budget to guide your spending
Being frugal is all about using your resources wisely and living within your means. One of the best ways to ensure you spend your money consciously is to create a budget and establish limits for each category.
If you tend to associate budgeting with restriction, shift your perception to thinking about a budget as a plan for your money. Budgeting is about making intentional spending choices. Plus, there are many types of budgets, so it's easy to find one that works for your personality and preferences.
| Budget type | How it works | Who it's best for |
| Zero-based budget | You plan all your spending ahead of time, down to the dollar. | Those wanting a super-detailed budget |
| 50/30/20 budget | You allocate 50% of your income to needs, 30% to wants and 20% to savings. | Those wanting a flexible and fluid budget |
| Cash envelopes | You plan your spending and use cash for as many categories as possible. | Those looking to curb overspending in specific areas |
6. Know the difference between wants and needs
It can be easy to get caught up in consumption. But if you're adopting a frugal lifestyle, it's crucial to understand the difference between your needs and wants. For example, purchasing a well-made winter coat is a need, but buying a designer coat is a want.
Living frugally doesn't mean you can never splurge. It's more about recognizing your needs and wants and making conscious decisions about your spending.
7. Be a savvy consumer
Frugality is about making wise decisions with your money, time and other resources. So to make smart spending choices, familiarize yourself with the resources available to consumers. A few strategies to consider:
- • Product warranties. Know the warranties of the products you buy and follow any manufacturer requirements, like registering your product. This can inform you of any recalls and allow you to replace your items rather than repurchase them if they break before the warranty ends. Additionally, check your credit card terms, as many cards offer an extended warranty benefit on qualifying purchases.
- • Price-match policies. Many retailers have a price-match policy: If you find the same item for less at a competitor, they will honor the lower price. You can also take advantage of this policy when shopping online.1
- • Price adjustments. Another policy retailers often offer is price adjustment or price protection: If an item you purchase goes down in price within a specific time frame, they will refund you the difference.1
- • Coupons and discounts. Coupons get a bad rap, but they're a form of currency. Coupons and discount codes can help you purchase the things you need for less out of pocket. Also, go beyond coupons and take advantage of discounts by striking when the time is right. For example, traveling during shoulder season—right before or after peak travel times—can produce significant savings.
8. Prioritize your values
Keeping your costs low in some categories frees up money to spend in others. So, it can be helpful to identify what areas of your life you value the most.
For example, if travel and experiences are important to you, you may be willing to cut back on areas that are less important to you—say, clothing and technology.
Identifying your values can also help you be strategic when applying other frugal habits. For instance, if you spend a lot eating out, reviewing your values may help you discover that spending time with friends is important to you, not necessarily the meal. That discovery can lead you to creative ways to entertain and spend time with friends without attaching the cost of a meal.
Spending time reflecting on your values can help you ensure you have the resources to spend in the areas that are important to you.
9. Audit your spending and bills annually
"Set it and forget it" is a strategy that works sometimes—like automating your savings—but if you set up your household bills and other recurring expenses without reviewing them periodically, you could be overpaying or spending money on services you no longer use.
It can be helpful to assess your recurring bills on an annual basis. Review each expense to see what you can eliminate, reduce or negotiate:
- • Eliminate: You may be paying for services you don't use (e.g., gym memberships, online memberships and streaming services). Consider canceling if you haven't used them in the past six months.
- • Reduce: For bills and services you can't eliminate, see if you can reduce what you pay. For example, you could drop premium features you don't use. Or if mortgage interest rates are lower than when you bought your home, refinancing your home loan can reduce your payment for the life of the loan.
- • Negotiate: For expenses you can't eliminate or reduce, see what you can negotiate. Perhaps you can ask your cell phone provider to meet a competitor's rates.
10. Create boundaries for yourself
If you're adopting frugal habits for the first time, it can be helpful to establish strategies, rules and boundaries to help you succeed. For example, if you tend to give in to impulse shopping, you can set a rule to always let your online shopping cart sit overnight. You can also unsubscribe from the emails that tempt you the most, or give yourself a specific waiting period before making purchases over a certain amount.
The idea is to provide a realistic path to a frugal lifestyle and achieving your financial goals—whether you're aiming for financial independence or saving for your next car.
11. Learn grocery shopping strategies
After housing and transportation, food usually represents most consumers' third biggest spending category.2 So, practicing frugal habits when grocery shopping can have a significant impact on your budget. There are several money-saving strategies you can use:
- Learn the prices of your high-impact items. One of the most impactful strategies you can practice is to learn the best prices of the grocery and household items you use regularly and stock up when they're at their lowest prices.
- Use coupons and discount codes. Using coupons on groceries is an excellent way to practice frugality, and you don't have to spend your Sunday afternoons clipping paper coupons to do it. You can keep things simple by downloading the app for your go-to stores, where you'll find both manufacturer and store coupons. Spending a few minutes loading up coupons before you shop will do the trick. You can take it a step further by using a rebate app that gives you cash back on specific purchases. Ibotta, Checkout 51 and Coupons.com are a few to try. Also, check your mail for even more savings, as many supermarket chains send exclusive coupons to members of their savings program. And if you buy your groceries online, be sure to use browser extensions to find coupon codes.
- Plan your meals. Simply planning your meals can help your grocery dollars go further. Doing this before grocery shopping is best, so you can plan your meals around what's on sale. But doing it after your trip is also good because it can help reduce food waste.
12. Buy used before buying new
One way to stretch your dollars further is to purchase used items as much as possible. By shopping at thrift stores, consignment shops, online marketplaces and garage sales, you can get items at a percentage of their retail price—sometimes as much as 50% less.3 Or if you have a Buy Nothing or Freecycle group in your area, you can often find the items you need for free.
You can take the pre-owned approach in many areas of spending, from cars to clothing to furniture. For example, purchasing a vehicle that is a few years old rather than new means you can scoop it up at a much lower price. Cars can lose up to 20% of their value in their first year and around 15% more per year through year five.4
There will always be some items you prefer to buy new, but in categories where it makes sense to purchase secondhand, pursue that option before buying new. Not only can this help you save money, but it's also good for the environment.
The Bottom Line
Living a frugal lifestyle can require a significant shift in your habits. But reaching your savings and other financial goals faster will be worth the trade-offs and changes you make.
Take it slow and be patient with yourself as you make adjustments. Consider starting in the area where you can make the biggest impact. You'll be most successful if you develop frugal strategies there first and then move on to others once you've successfully made some changes.
And remember that practicing these frugal habits can help you spend less and save more. If you'd like to learn a great way to maximize your savings, take a look at Synchrony's high yield savings account.
Alaya Linton is a personal financial coach, speaker and writer on a mission to help people break the paycheck-to-paycheck cycle and create a better financial future. Her writing has appeared in Lending Tree, The Balance, GOBankingRates, Sisters From AARP and other publications.
READ MORE: How to Save Money by Organizing Your Finances
Sources/references
1. Mahar, K. Everything You Need to Know About Price Protection and Price-Match Guarantees. The New York Times. Published December 8, 2022.
2. Consumer Expenditures—2021. U.S. Bureau of Labor Statistics. Published September 8, 2022.
3. New to buying used? 5 Benefits of buying secondhand. Hennepin County Environment and Energy. Accessed July 1, 2023.
4. What is car depreciation? Progressive. Accessed July 1, 2023.
