The 11 Laws Of Frugality

Save Your Money, Dump The Stress, And Fall In Love With A New Way Of Life

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When you ask the average person what frugality means, they'll probably talk about money before anything else.

“Frugality means you don't spend too much.”

“It's like you're trying to make things last… or maybe reuse stuff, so you don't have to go shopping a bunch…”

“Don't buy it if you don't need it.”

These are pretty common responses. But in reality, the concept of frugality doesn't have to be about “what you can't buy.” Frugality is a principle, and it can be applied to more than just money. A lot more.

At its core, frugality is this: wise resource management.

Positive and Negative Weight

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​Wise resource management applies to money, to food, to housing… but also to things like time and energy.

When you adopt a truly frugal mindset, you recognize that everything you have is limited. You respect that fact and spend accordingly.

You also accept that all these resources are connected.

It's All Connected

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Consider the following scenario.

Let's say you earn $100 an hour.

Your Hulu membership costs roughly $100 a year. If you make $100 an hour, the price of a Hulu subscription is probably not going to bother you very much.

But if you make $15 an hour, that annual cost adds up to almost an entire day of work.

Is that still a good trade?

Over the course of five years, that's a full week of work.

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​If you are making that much, and have Hulu for twenty years, you're talking about a solid month of work.

Is that still a good trade?

The point isn't whether you answered yes or no. Maybe you just really love Hulu (and we wouldn't blame you if you did!).

But the point we're making is: this is how you need to think about this stuff. The aim is to adopt a different mindset. To start seeing these resources as being all intertwined. You start looking at the big picture so you can minimize waste and maximize joy.

Our society is a sales-oriented society. It's designed to make us all feel guilty or ashamed for not spending money and for not earning more of it.

Frugality is an answer to that exact problem.

Does Frugal Living Work?

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The question really should be, “does spending carelessly work?”

How is it that frugality––essentially just the application of wisdom to one's financial life––gets so easily painted as the bad guy in this scenario?

Well, we're all for frugality. And yes, it works.

Frugality is about reclaiming control.

Don't get us wrong. There's nothing bad about spending money if that's WHAT you really want to do (and if you can afford it.)

The problem for many people is that they're spending money they don't have.

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​Or they're letting their hard-earned cash slip through their fingers because almost everything in modern society is designed to push them to do just that.

So we're going to look at adopting this new lifestyle with a number of Laws.

There's a hierarchy here, though. Not all “frugal tips” are created equal. If you're really looking to cut back on the amount of money you're spending, you need to:

  • ​Take a look at where it's going currently
  • ​Identify your worst spending habits
  • ​Make a plan to change those habits, and
  • Redesign your spending and your life in order to maximize your enjoyment

​In order to do all this, you'll have to adopt the frugal mindset. Which brings us to our first Law of Frugality…

Law #1: “Live Frugal”

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​This is the first Law because it's the most important. Seems pretty obvious, right?

Let's just get this out of the way ASAP: yes, we know that the phrase “Live Frugal” is terrible grammar.

But “Live Frugal” is an easy mantra to remember and that makes it easier to adopt.

(It's also a lot more fun to say than the grammatically correct “Live Frugally,” which is a big part of why we picked it. Who wants to live “frugally”? Yeccchhh.)

If you really want to do this frugality thing right, you'll want to take a cue from your most obnoxiously healthy friends. In particular, how they treat their diets or exercise routines.

The world's healthiest people don't go on crash diets one week and then binge on a billion Bon-Bons the next. They adopt consistent routines. The live an entire way of life that is healthy.

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They may indulge occasionally. But they keep coming back to the rules. The rules are always there. They've internalized them.

If you can do that same sort of thing with frugality, you will come away with much more than a few tips for saving pennies for a few weeks. Adopt the frugal mindset, and you will change your whole relationship to money, time, and even people.

Put another way, “Live Frugal” is sort of like when people say “live free.”

When people say “live free” they mean: “You are free. You are a free person… so now live that way.”

That's the idea here. Frugal is going to become what you are.

And you're going to live your best life as a result.

So what are the benefits for someone who begins to “Live Frugally”?

The Bennies of Being a Frugal Guru


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Frugality is treated like it's some virtue. Is that fair?

Well, yes, as long as you approach it with the right attitude. We'll get into the difference between being “frugal” and being “cheap” in a moment. But in the short-term, frugality brings some major benefits to the world at large.

Frugality is More Environmentally Friendly

Just as our personal resources are limited, so are the Earth's natural resources. And these elements, our water, wood, and minerals, are every bit as interconnected.

When you begin to “Live Frugally,” you ditch the need to be a conduit for waste that travels from the factory to the ocean or landfill.

Frugality Increases Stability

People adept at practicing frugality live well below their means.

Many others don't even know what their means are, much less try to live within them. When they hit their limits, it can be a rude wake-up call. Is it any wonder that so many wind up in serious debt as a result?

The amount of stress and heartache that accompanies fiscal instability is bad for society, and it's bad for individuals. But it doesn't have to be that way for you.

Frugality Increases Freedom

Time is money. The higher your expenses, the more time you have to spend working in order to pay for them.

Unfortunately for the average American worker, wage stagnation and increased cost of living mean that an hour on the clock doesn't get you what it used to. Twenty years ago, people could afford to work less.

So the question becomes, what really matters to you? Do you feel like you're working to the bone to make ends meet? If so, maybe the secret lies in identifying what you don't really need.

How Can Being Frugal Help Me?

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In the most basic sense, people who Live Frugal will have lives with lower stress. For one thing, you're not cramming your life full of things you don't need. For another, you can save for the future and worry less about things going wrong.

It's great for your confidence, too. Advertisers want us to believe that we can't live without this product or that service. They're masters in leveraging Fear Of Missing Out to get us to spend our dollars.

But once you kick the FOMO to the curb, you start to realize you really can go without a lot of that stuff.

And a lot of the time, you won't even miss it.

Law #2: Identify Essentials

People who Live Frugal know that they can do without.

What's more, they don't mind. They're deliberate about how they indulge because they know that it's the best way to maximize enjoyment.

Here's how to practice Law #2.

Look at your spending over the last three to six months. If you make a quick overview of your credit or debit card statements, you'll be able to get a good idea of what you're spending money on.

(This is harder if you spend cash. If that's the case, try to keep a reliable spending log for a few weeks.)

For each purchase, ask yourself: how would my life be different now if I hadn't bought this?

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​For things like rent, mortgage, utility bills, or food, obviously, the answer would be that you'd be in bad shape. You need that stuff so that you're not starving or homeless.

But what about the rest?

You may find that a lot of the things you buy don't have much long-term effect on your happiness.

There will be a few “optional” things that really have made life richer. Maybe you splurged on a birthday dinner for your partner. Maybe you took the kids somewhere that created a memory you'll share forever.

So when you identify essentials, pick a) things that you really can't live without, and b) the things that make life worthwhile.

Everything else is noise.

Cheap or Frugal? Attitude is Everything

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​This brings us to another point. Although it's not one of our Laws, it's important to know the difference between being “frugal” and being “cheap.”

Cheapness can more be wasteful.

When the bottom line is the top priority, quality gets sacrificed for “quick and easy.” Cheap clothes need to be replaced sooner. Cheap toys break. Cheap utilities malfunction (or even worse, start fires.)

Frugality prioritizes value. It's about the long haul.

The Live Frugal crowd finds ways to avoid high cost, low value. They borrow items from friends. They buy from garage sales or thrift stores. They only part with their money for something that's truly worth it.

Frugal VS Cheap Infographic

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Law #3: Build Your Emergency Fund

The next Law is about protecting yourself from the unexpected: build an emergency fund.

You need to have something set aside for a rainy day. When people are living close to the edge, a small accident can turn into a big hassle.

Having a credit card for emergencies is a common practice, and that's better than not having anything. But it's better to have something that won't charge interest just because you got hit with an unexpected setback.

An “ideal” emergency fund is three months' living expenses in your account. So if you live on $2,500 monthly, you'd want to save $7,500.

You might be asking how this all fits in with being frugal. Well, if we think of frugality as being wise resource management, this is the next wise step.

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It also has its roots in human psychology. Humans are wired to be lazy. It's how we conserve energy and stay alive longer… by doing less work.

Except, in this case, it actually has the opposite effect.

So, we need to give the brain a challenge.

Let's say that under normal circumstances, you earn $3,000 in a month, and your truly “essential” expenses come to $1950.

With $1,050 left over, you might not be very careful with how quickly you spend it.

But if you set yourself a goal to save $750 of that every month for a year (which is what you'd need for a good emergency fund), then you have to get creative with the remaining $300.

And that will demand that you Live Frugal.

It's also a good way to practice (ugh, here comes that awful word) …budgeting.

Live Frugal Super-Simple Approach to Budgeting

We're going to be as basic as we possibly can here because there are a million budgeting manuals out there. But if you don't already use a budget, they mostly boil down to the same principles:

First, figure out what your expenses are.

Second, figure out what your income is.

Third, figure out what the difference is, and what you're going to do about it.

It should come as no surprise that your income needs to be higher than your expenses. If it isn't turning out that way, you need a new system.

Most of the time you can solve the problem by cutting costs. Once you've narrowed your expenses down to only the “essentials,” you should have plenty of wiggle room.

Then you can start adding back in, starting with putting as much as you can reasonably spare toward building your emergency fund. This will teach you how to look at the long-term rather than short-term expenses.

If you want a truly detailed approach toward the ins and outs of budgeting, check out Dave Ramsey's take on that topic.

Law #4: Pay Off Credit Cards And Debt

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You know this one. Of course, you do. Everyone who has a credit card knows that carrying a balance from one month to the next is one of the worst things you can do for your expenses.

Unlike a positive investment, credit debt doesn't do anything for you… it just sits. And gets bigger. And sucks up your resources while your other bills pile up.

If you're in a position where credit debt is a serious problem, then drastic measures may be required. Fortunately, there are sometimes options for people who are struggling to get free of this burden.

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Make you talk to someone with a good reputation. There are plenty of vultures looking to take advantage of people who are already desperate. Contact the National Foundation for Credit Counseling and see if they can help you with a repayment program that will work with your budget and limit the amount you spend on high-interest rates.

You aren't going to get out without paying something, but it doesn't have to ruin your financial future.

Law #5: Save For The Big Stuff

Once you've built an emergency fund and paid down debt, you want to take a look at every major long-term expense you have. One of the biggest comes with raising children.

If you have kids, you know that it can be tough to keep them fed, clothed, entertained, and also save for a college education. One of the largest regrets parents have in advanced age is that they wish they had saved more for their kids' college.

Another regret people have is that they wish they had traveled more. “We just never had the money.”

The thing is, these expenses, these big, important expenses, don't just happen overnight. Most of us spend a long time working toward them.

So if you have done the work to save for an emergency fund, turn your attention to another “big” thing you want. Start thinking about how you're going to make that happen. At the end of your life, you'll be way prouder of that than you will be of the tiny little expenses that you can eliminate with a little frugality.

Law #6: Sell What You Don't Need

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How much of your stuff is actually helping you? How much would you miss if it were gone?

Decluttering is all the rage right now. Marie Kondo and others like her have really gotten people talking about minimalistic living. Getting rid of their stuff… so much, so that thrift stores are starting to be overwhelmed with how much people are donating to their sales floors.

How much of your stuff do you really need? If it's something you won't use but could sell, then do it. There's no use hanging onto things that simply gather dust.

The "Live Frugal" Family: A Step-By-Step Guide

Getting your family in on the act will save you big time in the long run.

Stick to the Budget

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Stick to your budget! If you don't have a system already, check out an app like Mint or Pocket Guard to help you get into the habit.

Once you've mastered doing that for a few months, get your kids into the swing of things. If you can give them a small allowance, ask them to make their own budgets every month, and by the time they reach adulthood, it'll be part of their mentality.

​​Save First, Spend Later

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As we discussed in Law #3 and Law #5, if you are saving money, take care of that before you dig into your discretionary funds.

And of course, teach your kids this tactic too.

​​Scavenger Hunt For Bargains

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If your kids are old enough that you can take them shopping and trust they won't wreck the merchandise, one way of getting them involved in your thrift-store routine is to turn the outing into a scavenger hunt.

Make your list of what you need and what you plan to spend. Give a copy to each of your kids and see if they can find what you need.

​​Borrow, Don't Buy

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Teach your kids the value of generosity and of asking for help. Especially in the case of a non-essential item, see if it's possible to borrow it.

In your own shopping routine, this is a great method for cutting costs. If a recipe called for a kitchen appliance, you'll only use once? If a Do-It-Yourself project calls for a specific tool, you don't have? Borrow it, or find something else to make.

Don't spend $50 on a tool to save $5 on the project.

​Axe the Subscriptions

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Do you have a Netflix subscription, and Amazon Prime Video, and Hulu, and cable?

Do you really have time to use all of them (if you do… can you tell us how?)

Subscription services seem inexpensive at the time, but they can quickly become a major drain on your bank account. You might balk at a high price tag if you were asked to pay for an item up front. Of course, companies know that. So they squeeze more money out of you by making you pay a little every month.

If you're actually using that gym membership, great. But if you only have time to get there once a month, is it really worth the fees?

Look at each and every one of your recurring costs, and see if you can swap any of them for another option. Pick your favorite entertainment service and cancel the rest.

Law #7: Look For Deals

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Speaking of thrift stores, this is one area where you can really clean up. The next law of frugality is all about maximizing your dollar. Not spending on cheap stuff that will break tomorrow but buying things used and still in good shape.

Sales on big expenses will have a major impact on your bottom line. Do you really need to buy a new car? Buying it once it has a couple thousand miles on it will drop the cost dramatically, at very little actual sacrifice to you.

Law #8: Pay For Quality, Not Flash

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And on top of that, what kind of car are you getting? Are you paying for safety and reliability? Or are you spending for something that will turn heads?

The Kelley Blue Book has been the standard in the auto industry for decades. Check out their lists and see what actually is the best deal for what you're really getting.

Consumer Reports also covers cars and a whole lot more.

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A car is a major expense, so this rule really needs to be applied here. But it fits with everything, including clothes, bags, and any purchase where you're paying for a label.

If you want to become truly frugal, you want to make sure you understand the value of what you're buying. Sure, a lot of frugality is about NOT opening up your wallet. But studying these resources will help you make informed decisions when you do.

Law #9: Do It Yourself

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Hiring someone is expensive. If you can do it yourself, give it a try.

Learn how to fix your car, or do home repairs. Cook your own meals as much as possible (prepared meals and eating out are among the biggest expenses among some people, as they can really add up over time!).

That being said, you should also know your limits. You may not be great at plumbing, and you may recognize that you never will be. In some cases, it's better to spend upfront for a professional than it is to try to do it all yourself.

Law #10: Use Everything

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See what you can re-purpose. Save things that you know you'll need some day.

For instance, let's say you are planning on moving to more affordable housing. You probably are going to plan this a little ways in advance, some weeks or months before you actually move.

So don't leave buying cardboard boxes to the last minute. Those things are expensive if you purchase them at a retail setting. Instead, if you have something shipped to you, break the box down using a box cutter and put it aside until it's time to move.

Rebuild it with a fresh roll of tape. If you're moving an entire house, you'll save a ton of money this way!

The 11 Laws of Frugality Infographic

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Law #11: Invest In People, Not Things

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When it comes to creating a meaningful life, the last Law is the one you want to remember.

At the end of their lives, what makes people happiest? Is it their stuff? Their accomplishments?

Typically, the answer is no. The thing that makes the average person the happiest in life is: do they have healthy relationships?

Whether it's spouses, children, parents, friends, or co-workers. How someone relates to other people is the single biggest factor in whether or not they consider themselves “happy.”

When you plan on spending your “non-essential” cash if you prioritize the other people in your life… if you prioritize your relationships with those close to you… and if your spending reflects that, you will be putting your money to the best possible use.

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And you will understand why the frugal lifestyle is so important.

In the end, this is the real lesson of the mantra “Live Frugal.” Frugal is the second word here.

The important thing––the most “essential” thing of all––is in how you live.

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