You can transform your personal finances by making frugality a habit. The best part—frugal habits save you money without you thinking about them.
In his book The Power of Habit, Charles Duhigg writes:
“To modify a habit, you must decide to change it. You must consciously accept the hard work of identifying the cues and rewards that drive the habits’ routines, and find alternatives.”
Duhigg describes several case studies on both individual and organizational levels that reflect this notion. In each scenario, changing one’s habit was key to inciting a larger change.
But what exactly makes a habit, well, a habit?
According to MIT researchers, a habit can be conceptualized as a feedback loop made of three parts: a cue, routine, and reward.
This simple breakdown can be used to understand many of our behaviors, both intentional and inadvertent.
And by understanding this habit loop, you can use it to your advantage—such as by making frugality a habit.
How can frugality be a habit?
We weren’t born knowing how to brush our teeth or tie our shoelaces, but by force of habit, these have become simple, automated behaviors. In much the same way, you can also transform frugality into a habit.
Our spending decisions aren’t set in stone, after all.
Using the feedback loop described earlier, you can break down your habits to identify what triggers certain spending behavior. For example:
- Cue: You hit your regular afternoon slump—it’s just 2 pm at work but you feel unmotivated and low-energy.
- Routine: You head over to the nearest vending machine and get yourself a chocolate bar as an afternoon pick-me-up.
- Reward: You enjoy a nice treat. Your mood may even improve a bit from a combination of getting out of your seat and tasting something sweet.
This is a simple example that, if repeated daily, would add up in both dollars and calories.
But such a habit doesn’t seal your fate. Like Duhigg suggests, you can change it so long as you consciously make an effort to identify why a habit exists and work on replacing it.
For the example above, that might be opting to take a brief walk around your office or packing a healthy snack instead of going to the vending machine. Done repeatedly, either of these behaviors can in effect “override” your previous habit.
15 Frugal Habits to Save More Money
Your daily routines are made of habit loops that may inadvertently cost more than you’d like to spend. But if you can identify these habits, you can then adjust them for a more frugal lifestyle.
Here are fifteen, for starters.
1. Evaluate the cost per use of every major purchase
Cost per use is a helpful concept for gauging the value of a purchase.
For items you’re debating whether or not to buy, make it a habit to ask yourself: How often will I use this?
Make a rough estimate. And then divide the cost of that item by the estimated number of times you’d theoretically use it—the final number is the cost per use.
Here’s an example:
- Your favorite clothing store has marked a cocktail dress down to 60% of its original price—it’s now $72 compared to its original $120. It’s a rare discount for this store, so it seems like an amazing deal. But how often would you wear it?
- If you wear it just once to a friend’s wedding, you will have paid $72 to wear the dress. And if you hang it in your closet and never wear it again, the cost per use remains $72.
- But if you happen to wear the same dress again for a formal work function later on, the cost per use goes down to $36 (for two wears).
- The more you wear the dress, the lower its cost per use.
Calculating the cost per use of items can help you understand whether a certain purchase is “worth it.”
And getting into this habit of evaluating cost per use can ultimately tame impulse buys because it’s easier to see that bigger picture of whether something’s a waste of money or a useful purchase.
2. Learn to cook
Here’s an easy habit loop to identify.
- Cue: Feeling hungry or craving something particular to eat.
- Routine: Opening DoorDash on your phone, pulling up your favorite takeout menu, or simply getting ready to hop in your car.
- Reward: Enjoying a meal from whatever restaurant you’ve decided to order from or go to in person.
Unfortunately, a habit of eating out can quickly translate into a tremendous food budget. In fact, the average American spends $232 dining out every month—that’s a total of $2,784 per year.
But you can turn this around by learning how to cook, a skill that has its benefits in both finances, health, and practicality.
And thanks to the internet, it’s never been easier to learn. Start by looking up simple recipes and getting the fundamentals down. Over time, you can move on to making some of your favorite restaurant dishes at home.
3. Meal prep
Learning to cook will help you reduce dining out costs, but you can even take it a step further by meal prepping.
Meal prepping reduces costs because it involves thoroughly planning out your meals in advance—meaning you can focus on buying only the ingredients you need, with less room for wasted food (and money).
“My wife and I used to spend more money each month on food than we did on rent,” Richmond Howard, blogger at PF Geeks, shares. “But we quickly got our grocery budget into shape thanks to meal planning and prepping our food.”
In fact, Howard and his wife even compiled a list of 50 cheap meal prep recipes that break down to less than $2 a serving.
4. Grocery shop for in-season foods
When fruits and vegetables are in-season, they tend to be at the peak of their supply and are more readily available. This makes it cheaper for farmers and distributors to get in-season foods to the supermarket—and as a result, it’s cheaper for you to consume them.
Resources like the Seasonal Food Guide make it easy to find out what’s in-season, but you can also often tell just by looking at what costs less at the grocery store.
But to help reinforce this habit even more, consider printing out a chart of when fruits and vegetables are in season. Place it somewhere visible in your kitchen—your fridge, for example—and take a quick look before you head out on your next grocery shopping trip.
5. Drink more water
“My husband and I used to buy so much soda, juice, energy drinks, and other miscellaneous beverages each month it was ridiculous,” says Lindsay VanSomeren, personal finance blogger at Science Finance.
After recognizing the cost of this “drinking habit,” VanSomeren made it a challenge to substitute water for her usual canned drink.
“I bought a good water bottle (I recommend Camelbaks) and set a goal to drink one full bottle per day to start,” she says. “I also added in ice cubes, because that seemed to help with introducing a unique texture/temperature rather than just plain room-temp tap water. Over time, I added more and more water to my diet, so that now we hardly buy any soda, juice, or energy drinks… And it’s saved us a ton of money in the long run.”
Like VanSomeren, you can make drinking water a habit. Though drinks like soda and juice may not seem expensive, they add up when bought regularly.
6. Conserve more water
Along the same lines, being more conservative and efficient about your home’s water usage can help bring down your water bill. Not to mention, it’s also good for the environment.
Some habits you can adopt to conserve more water include:
- Cutting your shower time—or showering less frequently
- Using your dishwasher instead of hand-washing dishes
- Running the washing machine only when it’s full
When practiced on a regular basis, these small measures can add up and save you some extra dollars every month.
As the Penny Pinching Ninja says, “The small amount of savings on your water bill may not seem like much, but it is the cumulative power of the little savings that make a huge impact on your overall finances.”
7. Share your subscription plans
Subscription-based services are the norm nowadays, from Netflix to HBO Go to Amazon Prime and many more.
The bad part about this? Different companies offer different shows and services, meaning you’d have to sign up for all to indulge in all of your favorite television and music.
To prevent entertainment from draining your budget, round up friends or family members you know are interested in the same content. Then make an agreement to share subscription plans and split the costs. That could be having one friend handle Netflix while you pay for Hulu, or having friends send over a flat amount per month (or year) to use your HBO Go password.
Many of these subscription services offer family plans or multiple users per account, so sharing a subscription isn’t even sneaky or illegal. It’s just a frugal way to get more for less.
8. Look for relevant coupons
This one’s a classic frugal strategy, and for good reason. Coupons save you from paying the full price—so it’s no wonder 90% of consumers use them.
Aside from clipping print coupons received in the mail, you can always Google the specific item you want to purchase and the word “coupon.” Digital coupons are becoming more and more popular and available for all sorts of items, even experiences.
See for yourself by browsing Groupon for restaurant deals and discounted experiences, including massages, art shows, sporting events, workout classes, and more.
9. Buy sample clothes from designers
Cultivating frugal habits doesn’t mean your wardrobe has to suffer.
Personal finance blogger Fo Alexander shares a hack for getting the latest fashion for a lower cost: buying sample sale items from designers.
“These are the samples that are run prior to production to verify that the garment will be made to specifications,” Alexander explains. “Designers offload this extra inventory by having sample sales that consumers can sometimes benefit from. Depending on what city you’re in, you can purchase samples from local stores for pennies on the dollar.”
10. Shop at consignment and thrift stores
Sample clothes from designers aren’t available in every city, but you can still save money on apparel by shopping at consignment and thrift stores like Goodwill.
Ashleigh Allman, personal finance blogger behind Smart Cents Mom, shares her insight on finding these deals: “I have found that pop-up consignment shops have much better prices than local consignment stores. These pop-up shops are usually only open for 3 to 4 days in the spring and fall.”
And clothing isn’t the only thing available at these stores—oftentimes, you can buy secondhand furniture and appliances as well.
Don’t let the low prices tempt you, though. Allman suggests shopping with a plan in mind, if not an actual shopping list. “It can be easy to overspend even at consignment sales if you don’t have a plan. I always go in with a detailed list of things we need to buy and how much I’m willing to spend.”
11. Host clothing swaps
Besides shopping at thrift stores, you can also cut back on your clothing expenses by hosting clothing swaps.
GP from Entirely Money shares this strategy as a way to avoid breaking his family’s budget on clothes—an especially helpful tip for families with growing children.
“We pack up our kids’ old clothes by size and send them around to friends, and we’ve had other friends do the same with us,” says GP.
But you don’t need to have children to host a clothing swap. Make a fun event of it with your friends and encourage them to invite others. The more people who participate, the greater the variety of clothing that will be available.
12. Buy the older models of products
This is distinct from buying secondhand because the item in question hasn’t ever been used—it’s new and just happens to be the older version of something on the market. Some items to apply this principle to include:
- Laptops and other electronics
Certified financial planner Justin Pritchard shares that he’s saved money on shoes by accident doing this. “Some of my favorite shoe models (Altra Paradigm and Altra Olympus, but I’ve done this with other shoes as well) have changed, and I don’t always love the ‘improvements’ they make. So, I always look for the older model at Amazon, Zappos, and eBay. You can often get the previous year’s model for 30 to 50 percent off or more.”
But looking for older models doesn’t come without its drawbacks. As Pritchard cautions, “Unfortunately, the right size isn’t always available, but if you check every few months, more inventory seems to pop up.”
13. Make homemade cleaners
“Cleaning products are very expensive, but you can save a lot of money by making your own,” says personal finance blogger Cara Palmer.
“With just a few simple ingredients like Borax, vinegar, and baking soda, you can clean just about anything. I use essential oils to add a pleasant scent to my cleaning solutions.”
This simple hack can help you save loads on household cleaning products. The best part—you can find plenty of “recipes” for cleaners through Google. Here are just a few:
- Three 3-Ingredient Cleaners for the Whole House
- 9 Homemade Cleaners That Actually Work, According to Cleaning Experts
- 11 Homemade Natural Cleaning Products – DIY Recipes & Uses
14. Take care of your things
How often do you wash your clothes according to the instructions on their label? Or replace the filter in your vacuum cleaner?
Though easier said than done, being diligent and careful about your belongings can reduce their wear and tear, meaning you won’t have to replace them as quickly as you would otherwise.
“The longer you can use an item you have previously purchased, the more value it brings to your life,” Kelan and Brittany Kline of The Savvy Couple advise. “It’s much cheaper to take care of what you already have than to purchase something new.”
This applies to cars, electronics, household appliances, clothing, furniture—and generally anything with long-term value. Developing a habit of taking care of your belongings can extend their longevity and the more you use something, the lower its cost per use.
15. Stack credit card rewards and cash back deals
Credit card rewards and cash back deals are more than a small consumer perk. They’re something to be taken advantage of and used strategically.
Make this a habit by:
- Looking for signup bonuses
- Choosing the best credit card for your purchase
- Using credit for big purchases
- Choosing cards with no annual fee (especially if you’re just starting out in the credit card game)
“I use rewards credit cards to earn anywhere from 2-5% cash back on each purchase, and in many cases, I can get additional cash back or rewards from other things like apps/websites like Ebates, store loyalty programs, coupons or special offers, and by purchasing gift cards below face value,” Marc Andre, founder of Vital Dollar, shares.
“Getting rewards from multiple different programs is very realistic with many purchases, and it can really add up.”
Making frugality a habit doesn’t mean you’ll be completely immune to impulse purchases and the occasional splurge. And that’s to be expected.
“No matter how strong our willpower, we’re guaranteed to fall back into our old ways once in a while,” writes Duhigg. “But if we plan for those relapses—if we take steps to make sure those slips don’t become a habit—it’s easier to get back on track.”
That said, it’s fine to relapse into an old habit every once in a while, whether that’s buying groceries out of season or a pair of shoes at full price. Just remember to correct your course and get back on track. Practicing frugal habits as a part of your normal routine will ultimately grow your savings and in an automated way that you don’t have to actively think about.