The right tip at the right time can make a huge difference in your future. That’s why I compiled this list of 75 frugal living tips.

Think of it as a checklist. Not every tip will apply to you. But chances are there’s one, two, or 5 to 6 that acted upon can change your financial future.

Need help in a certain area? Click one of the links below to view tips for a certain category. 

Basic Frugal Living Tips

  1. Track your income and expenses. Millionaires do.
  2. Set financial goals. You spend the majority of your time making money–make sure it’s for the right purpose.
  3. Automate the important stuff. Savings, investing, bills, etc…
  4. Adjust your payment due dates. Don’t make the mistake of making minimum payments just because your paycheck hits later in the month.
  5. If you have high-interest debt, there’s no need to carry more then $1,000 of cash. Pay off your debt ASAP! The interest is what’s causing you to stay behind.
  6. Try the envelope method of budgeting, if you’re always spending more than you earn.
  7. Don’t pay banking fees. Check out Even Financial, a free search engine that helps you find the bank that pays the highest interest rate in your area. When I did this, I found a bank that paid 22X the national average on their savings accounts and wasn’t going to nickel and dime me on fees! See what banks are paying around you area—check out Even Financial today.

Credit Score & Credit Report Tips

  1. Use Credit Sesame. It’s completely free and you’ll get customizable tips on improving your score.
  2. Your credit score matters! One study showed the difference of having excellent vs. poor credit saves a typical 35-year old male $274,918 over his life.
  3. Take 5 minutes to understand how to improve your score. It’s not complicated.
  4. Pay off your credit card payments in full each month. This will lower your credit usage, which is 30% of your score.
  5. If you’re paying in full each month, set a calendar alert to increase your credit card limits every 6 or so months.
  6. Are there any purchases such as a home you’ll be making with a loan in the next few years? The time to start improving your credit score is now, not when you’re about to take out a loan.
  7. If you’re young, get a good no fee card like the Chase Freedom or Chase Freedom Unlimited. Then, plan on keeping this card open. This will increase the average age of your credit which will increase your score.

Eliminating & Managing Your Debt

  1. The best way to find out how much you really owe and to who is your credit report. You can check this for free using Credit Sesame, which uses the TransUnion credit report. A recent FTC report found 20% of Americans have an error on their credit report, so make sure to know what’s on your report and take advantage of Credit Sesame’s free credit monitoring to get updates anytime there are changes.
  2. Use the debt snowball or debt avalanche method to pay off your debt ASAP.
  3. Want to start paying off the debt with the highest interest rate first (which might not be the smallest)? That’s fine. But stick to a plan and commit to it! Don’t spend weeks debating what plan to use — just start!
  4. AnnualCreditReport.com is the website set up by the Fair Credit Reporting Act. This site allows you one free copy of your credit report for each of the major agencies each year (Credit Sesame allows you to see only TransUnion). Make sure to check all of them at least once a year.
  5. Set a calendar alert for every 3 months to grab different reports on AnnualCreditReport.com. Reports may differ from agency to agency.
  6. You want the lowest interest rate possible on your debt. This allows you to pay it off the fastest. Check rates often (especially after your credit score has improved) to make sure you’re paying the lowest rate.
  7. Typical debt to income ratios, such as you can afford to buy debt payments of 36% of your income, are meant to maximize bank’s profits, not your finances.
  8. I like Dave Ramsey’s rule of thumb for getting a mortgage–payments should be 25% of income, on a fixed rate for 15-years.
  9. Keep some cash around but not too much. Aim for about three months and make sure it’s in a bank account that’s hard to access.
  10. Big purchases such as a car, home, or wedding can and should be planned for. Not something you decide you want to do, then take on the necessary debt to do so.

Investing: General Investing Tips To Maximize Your Portfolio

  1. Find a better bank. Don’t settle for a bank that charges you fees and pays next-to-nothing on their savings account. Head over to Even Financial, which is a free search engine that helps you find the bank that pays the highest interest rate in your area. No personal information is required, just enter your zip code to get the results.
  2. Focus on your savings rate. Beating the market is very hard. What’s easy is increasing your savings rate over time. It’s also 100% in your control.
  3. Compound interest is how the everyday person can grow extraordinary wealth.
  4. Want to be an above average investor? Low-cost index-funds place you in the top half (actually about top 20%) of investors.
  5. If you’re in the accumulation stage, be excited when the stock market goes down. Next time you buy, you’ll be buying at a  discount.
  6. What gets measured gets managed. Track your investment returns but don’t obsess. I use the excellent Personal Capital App to check in once a month or so. (Click here to sign up for Personal Capital and get a free $20 Amazon gift card)
  7. Like the idea of investing in individual stocks? That’s OK, just don’t bank your financial future on it. A good place to start is investing up to 5% of your net worth in individual stocks. Just know, that the average individual stock investor doesn’t outperform index investing.
  8. The stock market has returned about 7% a year after inflation. But by no means is that a smooth 7%. Some years will be up 30+%, while others down 30%. Expect this!
  9. The goal of investing is to obtain the highest return after fees and taxes! Don’t forget to factor in fees and taxes into your assumptions.
  10. The best book for beginner investors is The Little Book of Common Sense Investing. Even with no investing knowledge, you can breeze through the book in one night and understand how to use stocks to grow wealth.
  11. Have a hard investing question, post it on The Bogleheads Forums. The forum is filled with very qualified and knowledgeable people who can lead you down the right path.

Your IRA: How To Grow Your IRA The Right Way

  1. Open up an account ASAP. Outside of a 401(k) match, your IRA is the best place to put retirement savings. Fees are typically lower than employer-sponsored plans like 401(k)s, plus better investment choices.
  2. There’s no age limit for opening up a Roth IRA. All you need is earned income. As such, it’s a good vehicle to gift your children money, as long as they have income. It’s also a good place to start investing even if you’re not working somewhere that offers a 401(k).
  3. If you know a thing or two about investing (not advanced but understand fees, asset allocation, etc…) — my favorite brokerage is Vanguard. As an example, I have my spouse’s IRA 100% in the Vanguard 2050 Retirement Fund.
  4. If learning about investing is getting in the way of opening an IRA — open up an account with Betterment. Instead of picking an asset allocation you simply pick your goals and Betterment will place you in an optimized portfolio.
  5. Waiting to open an account until you have $1,000 or so saved up? Don’t. You can get started with Betterment for as little as a $1.
  6. Optimize your after-tax returns by choosing either a Roth or Traditional IRA. Run the numbers yourself using a calculator like this one.
  7. If you’re over the income limits, a backdoor IRA can still let you put away money tax-deferred.
  8. A Spousal IRA lets one spouse make a contribution to their spouses IRA, even if that spouse has no earned income.
  9. Pay yourself first by setting up automatic withdrawals from your bank account to invest in your IRA.

Your 401(k): How To Optimize Your 401(K) or Other Employer-Sponsored Plan

  1. Start contributing from the first day on the job. The longer you wait, the harder it is to start.
  2. Contribute at least up to the 401(k) match. Even if your plan has higher fees, the match will still outweigh higher returns.
  3. When it comes to asset allocation, check out Blooom’s Free Analysis to learn if you’re properly allocated with the options available to you.
  4. Don’t know a thing about investing? Blooom can manage your account for $10 a month, with the first month free.
  5. Increase your savings rate over time. Even 1% a year will make a huge difference over your lifetime.
  6. If you’re younger, try increasing at a faster pace. Set a calendar alert to increase 1% a quarter.

Making Extra Money

  1. Think of making extra money as a skill. A skill that can be improved with practice.
  2. Maybe the easiest way to start improving your money making skills is surveys. You won’t get rich but it’s a start.
  3. Downloading these passive income apps (see # 10), are also an easy way to earn some extra cash.
  4. To make some good money outside of  your job, give freelancing a try.
  5. Consider your first three or so freelancing clients as an experiment. Don’t worry about the money. My personal example — I spent about 10 hours on my first project and earned $50. In a year I was comfortable charging $100+ an hour.
  6. Not interested in freelancing? There are many other options to make good money.
  7. Try blogging. You’ll learn valuable skills, meet amazing people, and can choose your own adventure regarding what blogging does for you.

 

Your Career

  1. While salary is an important part to picking the right job, there are other questions to consider. One to try out, “What career path allows me to grow the most?”
  2. Learn negotiation. Read one good book in your life on negotiation. It’s a valuable career skill. Plus, allows you to maximize your earnings.
  3. Be likable. Studies show it’s not always the best performers that keep their jobs. Often it comes down to who the boss likes the most. So do good work and be friendly.
  4. Be good at two things. Make sure that first thing is the primary objective of your role. However, the second thing can be anything else that has value. Maybe you’re a customer service rep, who likes to write and therefore handles social media.
  5. Try to pick up one new skill a year. Don’t obsess over becoming world class but it’s good to have a working knowledge of new skills. In the past, I’ve focused on copywriting, web design, email marketing, and SEO.
  6. Have a system for increasing your income and responsibility. For example, find a higher paying job with more responsibility every three years.
  7. Invest in yourself. A lot of turning points in my career and in life have come after investing in myself. One course I bought changed the trajectory of this blog and allowed me to go full-time. Short on money? Invest time.

Insurance

  1. Only buy insurance on what you can’t afford to insure for yourself. For example, a house fire vs. cell phone insurance.
  2. Use the largest deductible possible. As a good rule of thumb, make the deductible large enough that it stings a bit to write the check. Yet, it shouldn’t impact your financial goals. e.g. minor setback.
  3. Term life insurance is the best case for 99% of people. Buy it once you have a family.
  4. Insure your house for its replacement value, not what you bought it for.
  5. Compare insurance costs before buying a new car.
  6. The largest discount most insurance companies offer is home/renters + auto.
  7. Your credit history is one of the primary factors in the price you pay for auto insurance. If your credit score has improved a lot since the last time you shopped insurance, shop it around again.
  8. Call your insurer to ask what they cover before renting a car, often the rental car insurance is unnecessary
  9. Shop around for home and auto insurance every year. Rates vary DRASTICALLY from carrier to carrier. Esurance is a quick way to get started.

 

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