My 6 Rules For Frugal Living (Financial Minimalism)

My 6 Rules For Frugal Living (Financial Minimalism)

Frugal living, also known as financial minimalism, is a lifestyle focused on reducing expenses, eliminating waste, and achieving financial freedom. By living frugally, I’ve dramatically reduced my cost of living, saved and invested more money, and relieved much of the stress I used to feel about finances.

After struggling with debt and overspending in my 20s, I knew I needed to make big changes in managing money. Implementing practices like budgeting, cooking at home, and decluttering has shifted my spending habits and mindset around personal finance.

In this post, I’ll share the six rules I follow to live frugally, provide examples and tips for each one, and include a case study of how making these changes has benefited me. If you want to take control of your money and live a minimalist, financially-free lifestyle, these frugal living rules can help you get started.

Rule 1: Distinguish Between Needs and Wants

The foundation of frugal living is learning the difference between needs and wants and only spending money on essential needs. Needs are crucial expenses like housing, utilities, food, transportation, insurance, and minimum loan payments. Wants are optional things like dining out, entertainment, vacations, and new gadgets.

By eliminating wants from my spending, I freed up hundreds of dollars each month to pay off debt and increase savings. For example, instead of getting $10 lunches every weekday, I started bringing a $2 homemade lunch from home. That $50 weekly savings added up.

Ask yourself before every purchase – is this a need or a want? Be ruthlessly honest. With this simple distinction, you’ll immediately reduce excessive spending.

Rule 2: Save First, Spend Later

One of my most brilliant frugal living strategies is ‘paying myself first’ by setting up automatic transfers from my paycheck into savings and investment accounts. Saving and investing money before paying monthly bills and other expenses ensured I always put money aside rather than spending it all.

Even when starting with as little as $20 per paycheck, making savings an automated priority results in substantial long-term growth. Within a year, I had built an emergency fund with three months of living expenses saved. After five years of consistently saving 20% of my income, I had over $15,000 in retirement investments.

Set up automatic transfers the day you get paid so the savings happen effortlessly. Consistently saving first will enable you to reach any financial goals.

Rule 3: Create and Follow a Budget

A zero-based budget that allocates every dollar of your income is essential for frugal living. I use the free app Mint to closely track where my money is going and create a realistic budget that aligns with my financial goals.

Here’s a simplified version of my monthly budget:

  • Housing: 30%
  • Transportation: 10%
  • Food: 10%
  • Utilities: 5%
  • Insurance/Loans: 5%
  • Entertainment: 5%
  • Miscellaneous: 5%
  • Savings & Investments: 30%

Clear budget categories and limits help curb overspending and ensure I save enough. I check Mint daily and recalibrate my budget to stay on track each month. Follow this simple budgeting method to take control of your finances.

Rule 4: Buy Quality Used Items

As a minimalist, I only purchase essentials. When I need to buy something, I can save 50-90% by buying quality used items instead of new ones. I shop at thrift stores, consignment shops, Craigslist, and Facebook Marketplace for everything from clothes to furniture.

For example, instead of buying a new $ 1,000 mattress, I found a 2-year-old premium mattress in perfect condition on Craigslist for $250. Being open to used products saves me thousands per year.

Check used marketplaces first before making any purchase. With some hunting, you can find high-quality, used versions of nearly anything you need at a fraction of the retail price.

Rule 5: Meal Plan and Cook at Home

As a healthy minimalist, I cook all my meals instead of dining out. Eating at restaurants was costing me $200+ a week. I spend about $40 on groceries to cook breakfast, lunch, and dinner at home.

Here’s a sample weekly meal plan for me:

  • Monday: Veggie & Rice Bowl
  • Tuesday: Chicken Salad
  • Wednesday: Pasta with Marinara Sauce
  • Thursday: Tofu Stir Fry
  • Friday: Soup & Salad
  • Saturday: Veggie Pizza
  • Sunday: Meal Prep for Week

Batch-cooking meals for the week saves so much time and money. With some planning, you can eat delicious, nourishing foods for a few dollars per meal instead of $10-$15 dining out.

Rule 6: Live Minimally and Avoid Impulse Purchases

I’ve minimized possessions and avoided unnecessary shopping trips to rein in spending. Decluttering my closet, selling my car, and eliminating unused subscriptions trimmed thousands in monthly costs.

I also wait at least 24 hours before purchasing over $50 to allow the initial impulse to pass. This small frugal habit saves me from money wasters I’d later regret.

Take an inventory of monthly expenses you can cut and establish rules, like waiting periods, to reduce impulse spending. You were living with less leads to spending less.

How Frugal Living Changed My Life

John was $42,000 in credit card debt, making $48,000 annually. After being denied a mortgage because of his high debt-to-income ratio, he knew he needed to make significant changes to get his finances on track. Here’s how adopting the six frugal living rules enabled John to pay off all his debt in under three years:

  • Differentiating needs from wants, John reduced his monthly spending from $3200 to $1600. He drove an older paid-off car, brought lunch to work, and skipped happy hours with colleagues.
  • He began saving 10% of his income by setting up an automatic transfer from his paychecks into a retirement fund. After three months, he had $1500 saved.
  • Making a budget revealed where all his money was going each month. He allotted 40% to debt repayment and 10% to savings.
  • Shopping at thrift stores furnished his new apartment for 50% less than buying a new one. He saved over $1200 upfront.
  • Cooking at home and batch meal prepping lunches sliced John’s food costs $800 to $300 monthly.
  • John minimized expenses by downsizing to a smaller apartment, negotiating lower cable and phone bills, and canceling unused subscriptions. This saved him an extra $200 per month.

In 2 years and eight months of determined frugal living, John paid off his $42K debt entirely. He continued living minimally and saving and had enough for a 20% downpayment on a home. John finally achieved his dream of homeownership, thanks to the frugal living strategies he implemented.

The six rules of frugal living outlined – differentiating needs and wants, saving first, budgeting, buying used, cooking at home, and living minimally – enabled me to reduce my spending by over 60%. This new minimalist lifestyle has given me greater financial freedom and peace of mind.


If you’re overwhelmed by expenses and debt, try these frugal living tips for just a few months. Controlling spending and consistently saving, even starting small, will put anyone on the path to financial independence. Use the budget template and meal plans provided as guides. Stay motivated by keeping your big financial goals in mind.

The steps required to change financial habits and mindset are simple but not always easy. However, with a disciplined commitment to frugality, you can live freely and abundantly within your means. What are you waiting for? Start today and make frugal minimalism a lifelong practice.