The Frugalist Expense Reduction Guide

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Spending less than you earn is a core component of good money management, and a vital part of any wealth building strategy. This guide is intended to provide readers with ideas, how-to’s, and resources on frugal living and expense reduction. It will explore aspects of frugality and provides practical ideas on how to save money and reduce your expenses.

What Is Frugal Living?

Being frugal is not the same as being cheap.  And frugal living doesn’t condemn you to a life of deprivation and sacrifice — if it does, then something is wrong.  Frugal living means that you are smart about how you spend your money — i.e., you know how to get more value for less money.

Frugal Strategies

There are many ways you can approach frugality.  There’s no right or wrong way, and you can adopt any number of strategies.

Addressing Your Needs Before Wants

I think Maslow’s Theory of Needs defines wants versus needs perfectly.  Fundamentally, you are putting money toward food (for sustenance), shelter, clothing (functional not fashion), and health before you spend it on other things.  Here are some more articles that talks about wants versus needs:

Smart Money Decisions Based On Value

Being frugal doesn’t mean buying the most inexpensive thing you can find.  It’s about getting the most value for what you buy, and saving money on what you have to spend.  Sometimes this involve sacrificing the bells and whistles, and focusing on buying what you really need. Here are some examples:

Minimize Waste

As a society, we throw out a lot of stuff that could be reused, repaired, or repurposed.  Here are some great articles to help you get started:

Minimizing waste also means not spending money unnecessarily when you have a lower cost alternative — this usually means giving up some of the convenient factors.  For example, walking another block to use in-network ATM machine, finding street parking instead of heading straight for the parking lot, etc.

Expense Reduction

Leading a truly frugal lifestyle is not for everyone; however, reducing expenses should be within everyone’s reach; and cutting costs is a great thing to do during periods of poor economy.  Here are some fun and creative ways to reduce your expenses:

Pareto Principle

You can use the Pareto Principle, or the 80-20 rule to work on your biggest financial drains and then work your way down (read the full article).

Expenses and Pareto

You can create a graph like the one above easily, by loading your information into free software like Mint.com.

Quick Wins

Instead of going crazy categorizing everything, another easy way to reduce expenses is to just sit down, brainstorm, and figure out the easiest ways to cut costs — this is called Quick Wins. You can even make this a family game where the winner figures out the most ways to save money, or save most money.  Be sure to turn your ideas into actions!

If you want to be technical, here’s a chart that rate easy versus outcome.

Quick Wins

For example, anything that requires a low effort to implement is a quick win (read the full article).


The third and last geeky way you can cut your expenses is through the use of a Scattergram.  This is a little more complicated, but it does give you more control than the other two methods.  Here’s what a scattergram looks like (read the full article).

expense reduction scattergram

Other Ways To Save Money

Here are some more money saving ideas for you to work with:

A Caution About Frugality

In parting, I’d like to caution that there’s only so much you can do to save money.  Frugality has its limitation — it’s called deprivation.  Therefore, being frugal is a good thing for your financial health, but in the long-term, effort put into developing income streams to earn extra money is what you should be doing.

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15 years ago

A first car is not a need.

And a basic “free” cell phone with a plan is also not a need.

I do not own a car, and my pre-paid cell phone costs 25 cents per minute but I basically use it only for incoming calls and I can usually get all my calls for $5 per month.

15 years ago

Thanks for the article! More and more I am finding that frugality isn’t about money at all, it is about peace of mind. Having your basic needs cared for (the first tiers of Maslow’s hierarchy) creates peace of mind, buying quality items that will last a long time and not need replacing, living below your means, not having debt hanging over your head – it all about making smart choices so you can let go of worry and stress.

15 years ago

I have been reading so many blog entries that suggest giving up hobbies and to stop spending money, period. The fact is, as you say, that would be deprivation and an impossible lifestyle to sustain so I hope more people take up your advice on living frugally instead of crawling in a hole with their money. I think at one point when the economy wasn’t so bad, too many people threw out the frugal mentality and now we’ve forgotten how to practice frugality when we really need to.

15 years ago

These are great tips. Accessing our needs before our wants is one of my biggest frugality tips because so many of us are in the “want it now” mentality. This mentality needs to be broken for the sake of our financial health.

Amber C
15 years ago

We have just started our Debt Reduction Journey and appreciate all the links for the great articles. I think I’ll sit inside by the heater today and read them all.

15 years ago

living frugally is now more important than ever, but as you point out you need not stop doing everything you want to do, it’s about balance. I think that what your article raises is the opportunity for people to stop and think about how they spend money to see if there are alternative approaches

11 years ago

Frugal Living does pay in the long run as it does help one to save for the future but it does not mean that we give up too much in our present making it boring. I cannot recall where but i did hear that past is gone, future we dont know but today is a Gift, that why we call it Present.

11 years ago

Good article. I started cutting back on a few luxuries and spending my money more wisely. I also try to buy items I need, if possible, used. I tend to use sites like ebay and craigslist, but I recently found a cool site for trading video games. I find trading, either between friends or using a system has saved me a lot of money. I am one of those people that tend to buy a lot of video games, so I have a lot just sitting around I don’t play anymore.

Some sites you can check out:

Nick @ CreditRanker
Nick @ CreditRanker
11 years ago

One thing I do to keep myself from spending too much money is that if I go to get groceries or to another store for something I NEED, I evaluate every item I have before going to the checkout to see if there is anything I can delay purchasing. This strategy ends up saving me money a lot of the time.

10 years ago

This is a lot of useful information. I also tend to buy a lot of video games which has gotten me into $37,000 worth of debt over the past decade. I now meet up with other locals to swap games instead during weekly meetings and also do trading thru craigslist.

The Frugalist Expense Reduction Guide

by Pinyo Bhulipongsanon time to read: 3 min
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