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Household money and budgeting

Frugal living

A way of living that spends carefully and avoids waste, so more of your money goes to the things you value most.

What It Means

Frugal living means being careful with money and resources: buying what you need, using what you have fully, and cutting spending that adds little to your life. Merriam-Webster groups frugal with thrifty, economical and sparing, and says frugal leans toward a simple way of life with little luxury. Many people use it to free up money for a goal, such as paying off debt or building savings.

Try It: Tick the Swaps and See What They Free Up

Tick the swaps you'd try. The amounts are examples; yours will differ.

Freed up each month$0
Over a year$0

Tick a swap to see what it adds up to.

How It Sounds at Home

  • "We're trying to live on less this year."
  • "I'd rather cook than pay for takeout again."
  • "We found $100 a month we didn't know we were spending."

The Breakdown

A short example. Maya and Chris want $1,200 set aside by next summer for a family tripFamily vacationA trip taken together by a parent or parents and their children, usually planned around school breaks, the children's ages and a shared budget. See more. They go through a normal month and pick three changes: cooking at home two more nights a week, dropping a streaming service nobody watches, and shopping from a grocery list. Together that frees up about $115 a month, so the trip money is there in about 11 months.

Where it goes wrong. In the first rush they also cut the Friday takeout night, the one thing the whole family looks forward to. By the second month everyone resents the plan, a hard week ends with a bigger takeout order than before, and the other changes start slipping too. They bring the Friday night back, keep the other three swaps, and the plan holds.

What to watch for

  • Cuts to the things you care about most, like the takeout night in the storyUser storyA short description of something a product should do, written from the point of view of the person who needs it, often in the form "As a, I want, so that." See more.
  • Bargains you didn't plan on. A sale on something you don't need still costs money.
  • The cheapest version of something you'll replace twice, which can cost more than a sturdier one.
  • Swaps that eat time you don't have.
  • Insurance and needed medical care, which don't belong on the cut list.
  • Money that's freed up with no job to do. Give it a goal, or it drifts back into spending.

Good to Know

The Consumer Financial Protection Bureau's shopping advice, written for the holidays, works all year: shop from a list, compare prices across stores and online before you buy, and be wary of sales that pull you toward things you hadn't planned to get. Decide ahead of time where the money you free up goes, such as a savings goalSavings goalA specific amount you plan to save by a set date for one purpose, which turns into a monthly or per-paycheck amount to set aside. See more or an extra debt payment, and move it there when you're paid.

FAQ

What does frugal living mean?

Spending carefully and avoiding waste, so your money goes to what you value. Merriam-Webster says frugal suggests a simple lifestyle with little luxury.

What's the difference between frugal and thrifty?

Merriam-Webster lists them as synonyms that both mean careful with money or resources. It says frugal leans toward simplicity and little luxury, while thrifty stresses good management and hard work.

Where should I start with frugal living?

Look at last month's spending and pick two or three costs you wouldn't miss, such as a subscription nobody uses. Put what they free up toward one named goal so you can watch it add up.

Do It in Buhata

Goals and Budget

Set the goal in Goals in Buhata and log what each swap frees up in Budget, so you can see the total grow month by month.

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Related Terms and Categories

  • Needs vs wants

    The split between costs you must pay to live, work and protect what you have (needs) and extras that would be nice to have (wants).

  • Lifestyle creep

    When spending rises along with income, so a raise or a new job leads to a bigger lifestyle but little or no extra saving.

  • No-spend challenge

    A set stretch of time, often a month, when you spend only on essentials like housing, groceries, bills and transportation, and cut everything else.

  • Impulse spending

    Buying something on the spur of the moment, without planning for it or checking it against your budget.

Household money and budgeting

Sources

Merriam-Webster Thesaurus, "Frugal"; Britannica Dictionary, "Frugal"; Consumer Financial Protection Bureau, "Plan your spending to avoid holiday debt"; Consumer Financial Protection Bureau, "A five-step spending plan to avoid holiday debt"

Last updated .