10 Ways To Embrace Frugality So You Can Invest More

10 ways to be embrace frugality where spending is inevitable, to invest more money into your future and help you achieve financial independence.

Introduction

As modern day humans, there is a lot of things we simply must spend money on in order to get by and as we journey through adulthood, this list only seems to get longer. First it’s rent, bills and groceries when we move out of home, then eventually come things like kids, a mortgage (and maybe car, boat or other toy payments if you aren’t being careful). Sometimes, it can seem like too much to keep up with.

Luckily, with advancements in technology and the rise in consumerism making business more scalable and competitive, amongst all the distractions and temptations, with some careful management, there are some great ways to save money for the frugal-minded, allowing you to invest more money into your future. In this article, we examine 10 such areas to help you get started in achieving financial independence.

What does the word Frugality really mean?

The meaning of Frugality, in essence, is learning to be economical with your money in order to embrace a life of simplicity. However, if you choose to lead a frugal and simple life, it doesn’t have to be forever. By embracing frugality now, you can invest more money into your future, allowing you more money and freedom to provide for a family, or perhaps do more of the things you enjoy later on. I think frugality is a part of financial self-discipline, money mindfulness and embracing of delayed gratification to allow us live more free and joyful lives. Frugality is a wonderful muscle to train and flex – but this should not be confused with being ‘Cheap, Stingy or a tight arse’

“Frugality is one of the most beautiful and joyful words in the English language, and yet one that we are culturally cut off from understanding and enjoying. The consumption society has made us feel that happiness lies in having things, and has failed to teach us the happiness of not having things”

Elise boulding

10 ways to embrace frugality in your life

Groceries

Saving money at the supermarket doesn’t stop when you get home. In fact, one of the best ways to save on groceries is to minimize waste wherever possible. Buying frozen veggies is a great way to do this, as any spares can be sealed with a clip and stored right back in the freezer for next time. Meat is costly and can also be stretched by adding any leftovers to dishes like a pie or pasta for the next day.

When it comes to actually doing your shopping, though, it can take a lot of discipline to keep your grocery spending down. That’s why it’s important to set a grocery budget, write a list, and try to stick to it. If you’re someone that struggles with this, one way to do this is via online shopping. You can keep a live tally on how much you’re spending and simply remove any unnecessary items from your cart before checking out. If you continue to spend too much, another more extreme method of utmost frugality is to get cash out before your grocery trip and leave your bank cards at home.

Having said this, I think during my FIRE journey I may have taken this a little too extreme – Between 2019 to 2020 I reigned my grocery bill spending down by almost 90%, going from some weeks spending $300+ on food, right down to a budget of $35 during the ‘peak’ of my FIRE obsession. In hindsight, although it was very healthy physically wise, as I basically lived off an amazing whole food plant based diet, mentally or psychologically speaking it wasn’t great as it did add some feelings of guilt and stress regarding my food consumption. Whilst we should be mindful of what we eat, obsessing over food is never healthy and can lead to eating disorders.

These days (post-FIRE), I rarely track my grocery food budget as it seems that my frugality muscles are so well toned that no matter how I spend, it seems to always come in at under $100 a week (unless it’s a very special occasion and I am buying specific luxury ingredients for a decadent meal). This usually feeds myself and about half of the meals for my partner.

Don’t forget to shop at Aldi to save money compared to the other large shopping chains.

Household bills

As of February 2022, the average 4-person Australian household’s monthly bills were over AU$5,000. With inflation and interest rates both continuing to rise through the tail-end of this year, this figure is only going to get worse. It is, therefore, a no-brainer that there are some savings to be made in this area for those trying to be more frugal.

One place to start is by turning off the power sockets where you have unused appliances connected. While this has been debated in the past as a means of saving on your power bill, the UK-based Energy Saving Trust claims it costs most households approximately £80 a year, with many other sources claiming this simple trick can cut up to 10% off your power bill.

Another great method for saving on bills for larger households in particular is moving to a bundled mobile phone or data-sharing plan. With the average single phone plan costing between $65 and $100 and a 4-phone bundle plan setting you back roughly $140, this is an easy way to slash up to 40% off your monthly household phone bills. However, I hate monthly bills, and those figures are horrendous – I don’t know how people sign up to this crap. See how I save money on my mobile phone bill here by using a sim only prepaid 12 month plan to only pay 10-20% of what everyone else is paying!

It also makes sense to regularly audit your household bills and compare providers. Are you really getting the best deal out there? Have you asked for a better price? These things can help to cut costs by a significant amount.

If you are a homeowner, it is worth crunching the figures on solar panels, especially in the drier parts of Australia that receive significantly higher solar irradiation. Some figures I have seen show that (depending on household size and electricity consumption) you can pay a system off in as little as under 5 years (a pretty good return on investment compared to an index fund). Solar panels with a battery allow you to even use this off-peak, but battery tech doesn’t quite seem to be there yet and the figures I have seen show a battery can take up to 20 years to pay itself off (a pretty poor return on investment compared to an index fund) however there are emerging concepts which are promising such as using EVs for electricity storage and I think we should pay attention to some of these ideas and crunch the numbers ourselves to see if its worth doing.

Social Life

Being frugal with your social life can be a double-edged sword; the age-old saying, “money doesn’t buy happiness” comes to mind. While money is certainly helpful in a lot of ways, it’s how we use money that truly brings us happiness and extensive research suggests that social connection and interactions are leading factors.

With this in mind, it’s important to strike a balance between frugality and social life, especially for those in their 20s and 30s. Don’t say no to those social activities that are new, or otherwise excite you. For example, if your friends are planning a vacation and money is the only thing holding you back, don’t say no because you’re trying to be frugal, but flip the coin instead. Be frugal in the other areas discussed in this article, or maybe say no to those social activities that bore you because you’ve done them 1000 times, so you can afford the vacation with your friends. After all, what’s the point in saving or investing money if you can’t have some fun along the way?

Limiting or avoiding alcohol consumption can be a great way to still participate whilst saving your bottom line. Interestingly, after my experience with medicinal mushrooms, I barely feel the need to have more than one or two drinks at a social engagement where I would have normally had ten.

Meals and Takeaway

No matter how hard we try, life gets busy and after a long, hard day, sometimes we simply don’t have the time or the energy to cook dinner. Takeaway or other quick-fix food options, though, are often expensive (especially for those with families), lack adequate nutrients and in the case of microwave meals, come in ridiculously small portion sizes.

So, what is the alternative? A staple in my household is a ready-made meals – I meal prep and freeze them. Curries, stews, roast veggies, fried rice, soups etc.

An Aussie ‘lazy dinner classic’ is simply grabbing a roast chicken, some bagged salad or slaw, and a bag of buns or rolls from a grocery store. No cooking or heavy overspending is involved when compared to fast food outlets, plus plenty of vegetables and protein to keep your energy stores full.

Some other options are instant rice with your choice of meat/protein (great if you have leftovers) and some garlic, cream, or sauce to suit. Or make or buy a heap of dumplings and freeze them. Minimal prep, minimal spend. If you’ve had a busy day and need a low-stress solution for dinner, take the opportunity to get creative without breaking the bank, and have some low-effort ’emergency meals’ banked in the freezer for when you just don’t have the energy to cook from scratch.

Gifts

Gift-giving, in just about every culture, is somewhat unavoidable. However, for those pursuing a more frugal lifestyle, buying gifts doesn’t have to be a dealbreaker. Keeping a list of those you regularly purchase gifts for and things you think they may like can help you to capitalize on any sales or other bargains you see while out shopping.

Buy one, get one free promotions can also be an easy means of saving on gifts. Do you have 2 relatives that enjoy the same things? Do you have a friend that likes to wear the same cologne or perfume as you? If so, take advantage of these 2-for-ones when you see them.

Seasonal promotions can also be an excellent way to save cash on gifts. Back-to-school sales, Black Friday/Cyber Monday promotions and Boxing Day sales are just some examples of occasions throughout the year where you can score some bargains on some cool presents bound to make the receiver’s day.

You can also take advantage of cashback stores such as Cash rewards and Shopback to get cash back on purchases.

Personally though, I really dislike the commercialization of holiday and festive seasons. My family runs a ‘secret Santa’ game with the rule that the gift must be below $50, and this stops a huge amount of waste. Because, really, most people don’t get what they actually want (or need) and most gifts just sit around, or get re-gifted or thrown out and become landfill.

I have bought peoples books they don’t read, courses they don’t ever do, and plants which they just let die. In general, don’t gift something to someone if its going to take up their time and they just don’t care. It is a waste of your money and therefore your precious life energy.

Before you think gift cards solve this issue, think again – in general, gift cards are total crap. Brilliant idea if you are selling them, shit idea if you are buying them. Whilst I’ve seen some cool hacks where people are able to get an additional 5% off their grocery bills using the Coles Myer cards, I just prefer my hack to get 30% off by shopping at Aldi instead. Gift cards are basically just a shitter form of cash (or crypto?), which limit the receiver’s ability to buy to whatever items are at that store, and they fricken expire AND can get lost or stolen. IF you are going to give a gift card, just for god’s sake, gift them the cash and be done with it.

Fitness and exercise

If there is one area we as humans should invest more heavily and regularly in, it is our health and fitness. We need to have enough self-respect to understand the importance of our health as our number one priority. Like our social lives, extensive research shows a deep link between regular exercise and improved mental wellbeing (in addition to the obvious physical health benefits). The internet is full of sites like ResearchGate where you can view such studies. Luckily, in this day and age, it has never been easier to strike a happy medium between fitness and frugality… if you know where to look.

If you can’t seem to stick to a home-workout regime, several gym chains around the globe offer inexpensive memberships with both lock-in contracts and month-to-month options. Anytime Fitness is one such chain. With over 2.6 million members and almost 3,000 gyms across five continents, Anytime is just about anywhere and all members can access any gym across the world for less than AU$75 a month (which for the record I think is ridiculously high – My home gym set me back about 12 months worth of a gym membership, but guess what – I have it forever!)

There are several other gym chains like AnyTime fitness across the world and most offer regular promotions where you won’t have to pay a joining fee and will receive free or heavily discounted monthly memberships for some time. Keep your eye out for these sales to see if you can grab a bargain on your fitness. See how I save money on my gym membership here. However, I do accept that for some people hey you just don’t have the self discipline (or the space) for a home gym. If having a gym membership or using classes or a personal trainer motivates you and keeps you in peak physical condition – then it’s worth every cent.

You can of course exercise for free! Grab a second hand bike from Gumtree, go cycling, head out on different bush tracks for bushwalking, do some YouTube workouts at home or take the kids to kick a soccer ball at the oval.

When trying to be fit & frugal, it’s also important to remember that “healthy food is expensive” is a complete myth. Your food doesn’t need to come from a ‘health-food’ store to be healthy. Take a little extra time at the supermarket when hunting for cheaper food options and ensure you consult the nutritional information too, and you can get rich and healthy with a plant-based food diet.

Providing for the kids

When it comes to providing for children, especially young ones, the “embracing a life of simplicity” side of frugality is extremely important. If you want to live frugally while still providing for your kids, then “less is more.”

First order of business: decluttering. Clutter makes for more stress and anxiety, both for Mum, Dad and the kids. Not only does decluttering provide an opportunity to grow your savings by selling unwanted items, but it allows a child more room to grow, which brings us to our next point: cut down on the toys!

You may be tempted to feel guilty for not splurging on your child, however, you may actually be doing them a favour. Simple objects, like a frisbee, have a range of uses from a frisbee, to a steering wheel, to a toy plate. With more room to grow, and just a few simple but versatile toys, your children’s imaginations will grow and thrive.

Whilst I’m not a father yet, I have many nieces and nephews who I am regularly (basically daily) involved with, and I have done a shit ton of research for my own personal family planning which I have published in my ‘cost of raising children’ series (soon to be amalgamated into one giant post so watch this space)…

Buying second hand

It goes without saying that purchasing second-hand items can save you a lot of money, but it’s important to note the potential compromises on quality and longevity. An example of where it may be worthwhile to purchase used rather than new is cars. A used car can save you significant money in repayments and “dead money” in the form of interest payments and any monthly fees you may incur with a new car.

The other way that a used car saves you money is in the purchase price itself. They are often significantly cheaper than their newer counterparts, which lose up to 30% value in their first year of life and half their value by the end of year two. By purchasing a used car, even if it’s only 2-3 years old, you “skip out” on this significant loss of value and incur a much lower annual depreciation rate. The obvious caveat to used cars is potential quality issues, so ensure you have a trusted mechanic or car enthusiast check over the car before purchasing.

Another place you are likely to find some bargains on decent quality second-hand items is op-shops. The key here is to set a budget, and stick to it. Don’t go shopping for the sake of it, make a list of items you need and look for those items only. When op-shopping, be sure to consider the life-cycle of a product versus the cost of a new alternative to ensure the used item will be worth your while.

Educating yourself

Just like anything in life, the more you know and continue to learn about frugality, the better your results will be. There are many online education resources for how to better manage your money, with most countries’ governments even having their own websites dedicated to this topic.

Two such websites are the Money Smart section of the US government’s FDIC website and MoneySmart.gov.au for the Australian readers. If you want to learn how to be more frugal, then knowledge is power, so read up!

FIRE blogs are also a hugely valuable free resource – I listed the 10 best Worldwide FIRE blogs HERE, and the 10 best Aussie FIRE blogs here.

Ask yourself: Why?

Motivation is great… until it runs out. That’s where discipline comes in. There will be times in your journey where you forget why you’re even being frugal in the first place, and most people will go through this. The more clearly you can articulate the answer to this question, the more likely you are to remain disciplined and see the journey through.

Are you investing so your children can have a better future? Do you have plans to see the world while you’re still young enough to do it? Not only is this question going to prove helpful when your frugality journey feels more difficult, or you are tempted to splurge “just this once,” but it is a helpful question and philosophy for all facets of our lives.

“I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.”

Jeff Bezos

Conclusion

Now that you know these savings life-hacks and ways to find bargains in your everyday spending, with a little practice and self-reliance, you’ll be saving more money in no time and your investments will grow as a result.

With a sound education and a clear purpose, embracing frugality can become second-nature and yield great results for your future and the future of your family. The only question left to ask is, what do you plan to do with all these savings?