The ABCs of Frugality: 8 Simple Rules to Spending Less and Enjoying Life More

by Garen Daly
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Do you feel like your finances are out of your control? Follow these simple rules to start spending less so you can ultimately enjoy more.

Ok, let’s be honest. Rising costs and lowered incomes are putting pressure on our budgets. The traditional virtue of thrift is essential. All of us will be required to design a financial regimen, one that protects our families and our homes.

This isn’t new. It has been done in the not too distant past. We can and will do it. And we have few pointers to help you. They are the ABCs of Frugality. The first step is relatively easy, but in its simplicity lies the core of smart planning. Here then, are eight simple rules to spending less and enjoying life.

A. Get the Data

Make a list of monthly expenses. It’s pretty easy to know your mortgage payment, utility bills, or auto insurance premiums. Yet most people don’t include groceries, gas, dry cleaning, etc.

Grab a small notebook and start tracking everything. Know where your money goes. If you know where it goes, it is easier to stop unnecessary outflow. It’ll be easier to keep necessary expenditures reined in.

Here’s what you do.

Write down every penny you spend including credit card expenditures. Then add it up. Once it is down in black and white, understanding is self-evident. Many times the big surprise is the cost of restaurants.

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B. Now Annualize Everything

Knowing what you spend on a monthly or even a weekly basis is just the start. Multiply that number into a yearly cost.

If you spend $4 a day on a cup of coffee, that’s $1,400 a year. A couple who eats dinner out twice a week could spend $5,000 a year. There’s nothing wrong with that if it’s important to you. Too many of us have gotten into habits and we don’t realize the cost. Ask yourself, “Is it worth it? Is it worth, say, the $5,000? Or could that money be used differently?”

C. Smart Credit Card Use

The most abused area of personal finance is the credit card. Time delays and indecipherable bills obscure spending. Studies have more than suggested people will spend less money when cash is used.

Remember that when using your card, you should ask yourself if it’s really a good deal? Being honest is the first awareness. We do use credit cards. They’re very convenient. But carrying a balance is throwing away money. Therefore the first financial priority is paying off cards.

Cut all spending to the bone. Although it may seem daunting, start by paying off the lowest balance first. It’ll give positive feedback. Then pay the balance each month before the due date. Credit card companies are constantly looking for new and exciting ways to get more money out of your pocket. They add all fees. They shorten grace periods. They raise interest rates if the wind decides to change direction. Some folks recommend dropping all your cards except one or two. Others suggest keeping the cards, but not using them. The unused balance will augment your credit rating. Everyone’s situation is slightly different. Use the one that enhances your financial picture.

If you have significant balances and your interest rate is unattractive, action is required. Start by paying more than the minimum on time. After a period, call the company and negotiate the fees and the interest. If there is a negative response, start making plans to change companies.

When you begin your search for new credit cards, look for companies with no annual fee. Rewards programs sound great, but if there is no payoff to the tune of $50, no fee is better. That $50 stays in your pocket. Rewards plus an annual fee serves the credit card company, not you. I have one last note on rewards programs. Be sure the reward is cash or something you’ll use.

D. Sea of Debt

Our culture has fostered debt. It was the engine driving the economy. Remember when a certain politician invoked mall spending with patriotism? It makes sense for the national economy, but not individually. Not drowning in a sea of red ink is a healthy way to live, but it requires being savvy to keep afloat.

For example, check interest rates on mortgages, auto loans, school loans, or any other debt. Develop a plan for extra payments on those loans with the highest rates. As debts are whittled down, monthly living expenses will drop.

Use debit cards with care. Items bought with them may not be protected. Loss of a card and use by someone nefarious may not be protected. And several studies have shown people spend more with a card, any card, than if they used cash. That is something to keep in the forefront of your mind.

There is a great quote for the father of our country George Washington: “To contract new debts is not the way to pay old ones.” Knowing debt will drag you down is a major step towards frugality.

E. Align Your Values

Have you ever defined the family’s financial goals? Is a college fund part of it? Or perhaps a new house for an expanding family is needed.

Whatever it is, stepping back with clear goals makes it easier to match philosophy to actions. Actions like moving to a smaller, less expensive house may make sense. Upgrades on housing services like heat may make sense. That second car may be impractical. The course of action becomes evident when the numbers are presented and the goals defined. Be courageous in your examination and don’t rationalize.

F. Waste Not

Knowing where money is going is a start. Understanding areas to spend less is the another step. Some typical issues:

Cable Services

The average TV watcher focuses on 12 channels, and some watch even less. Do you really need the other 150 channels? Consider dropping all but the stations you want if your cable company had reasonably priced tiers. Or forgo cable for one of the many streaming services. Estimated savings: $1000 a year.


With landlines, cell phones, Internet phones, and even email, we have so many ways to communicate with each other. They’ve been built up over time. Take a step back and analyze your needs. If you have a cell phone, do you need a landline’s long distance service? If you have a cell phone, are you on a contract with lots of roll over minutes? Is you cell contract on a family plan? If any of these exist in your home, you probably can save anywhere from $1,000 to $3,000 a year.


Dining out is not cost effective. It may be enjoyable, but it is not cost effective. Restaurant eating has become a culture, which costs more than making your own food, and in many ways, it’s unhealthy. Cutting down on the restaurant meals will save money. Dropping one restaurant visit a week can save a family of four $2000 a year. Imagine how much you’ll save if more is dropped.

Other areas to consider examining are insurance rates (raising deductibles) or less expensive vacations. Any place money is spent is always a place to re-examine how that money is spent.

G. Stuff the Stuff

Many Americans simply have too much stuff. The attic, the cellar, the back of closets and even those ubiquitous self-storage centers are crammed with stuff not used in years. Assess what is in storage. Recycle what is not used. Before shopping for new things, look around. Maybe it is already there. Put the creative hat on and reuse what is already on hand.

H. Delay the Gratification

When the urge to buy swells, wait. The moment will subside. Then determine if the purchase is a smart choice. Before buying it, talk it out with your spouse. Here’s a good rule of thumb. If you’re not willing to talk about it, you probably don’t need it.

Another way of delaying gratification is to keep your car longer, or buy an appliance only when it is on its last leg and you’ve researched a replacement. However it is reached, stalling the impulse to buy is a solid, frugal decision.

Frugality starts when the realization that our money is ours. Using it wisely is a tradition that goes further back than Ben Franklin. As a culture, we have strayed from that principle. Remember that being frugal is not being cheap. It is about getting value. It’s spending our money where it matters and never wasting money. This is the basic frugal tenet.

Reviewed October 2022

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