How to be Frugal: A Definitive Guide

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Foolish to Frugal: Tips on How to Be Frugal

My Story: I was excessive, too.

Story time!

I’m a millennial. You know, that infamous cohort born between 1981 and 1996.

Just like any millennial raised in consumerist culture, I was excessive too.

I was born in the nineties, a teenager in the 2000s, I grew up looking at MTV Cribs; admired the likes of Gossip Girl and read Confessions of a Shopaholic. I admired these lavish, neurotic protagonists I consumed in pop culture.

As a girl living in a third world girl, it was the dream to live in Consumerist capital of the world, America.

In my early 20s, I became one of the youngest professors in the Fine Art department in Asia’s oldest university. I worked for 5 years there and then decided I wanted to challenge myself. I decided to go back to school. I chose to pursue an MBA.

I had everything I needed for the next two years to pursue grad school: family support, considerable savings and a part scholarship.

Moving to the big city

The thing is, moving from Cebu into the big city of Manila (and later, to Philadelphia) was the most exciting thing for me.

Life in America | Economerienda

Anyone who has been a ‘new girl’ knows that feeling. I wanted to prove to a sea of strangers my worth. I was eager to prove myself to new friends, and the lifestyle that came with it.

It took me only six months to wipe out my savings.

Aside from school, I was also checking off things in my bucket list. I had plenty of free time to study and do all the things I always wanted to do: spiced pumpkin latte in the snow; solo traveling and surfing in the Pacific, pole dancing–I was doing it all!

However, doing all these things were cool, but not exactly cheap or easy.

More expenses kept coming in–I needed to afford this new lifestyle. There were parties to go to, interesting people to meet, clothes I shouldn’t repeat.

I was racking in credit card debt, but I kept telling myself:‘I’ll be able to pay it all back once I get a job after business school!’

I broke the number one rule in personal finance: I spent money I haven’t earned yet.

I was insecure and discontent, and as a consumer I was taught that the cure for this was to try new stuff. It did made me happy, until it didn’t anymore. I have to go buy more stuff to go back to being happy.

Because I was a student, I reverted to irresponsibility and thought I would worry about it when I’m back to being an employed adult.

Just like a vast majority of people, I encountered a phenomenon called ‘upgraded wants and needs’.

Even if you do start earning more, you scale their needs as your income increases. You create a vicious cycle in consuming, aided by cheap and easy credit. Spending becomes an addiction. It fills an empty void temporarily, and then you need to have that fix again. There’s always that newer, shinier object you need to have.

Rich, or rich in debt?

“A vast majority of people with high income, do not necessarily mean high net worth.”

My story is not an uncommon one among our generation. Credit is easy, job market is dismal, but based on the social media news feeds, everyone else seems to be having a good time.

These factors are driving many young adults to a vicious rat race chasing for the dollar (or peso); whether they are living in first world (such as USA) or to a developing country (such as my home base Philippines).

…But what if I just earn more?

But being frugal Sucks! What if I just earn more?

Sure, saving isn’t as appealing as spending. But there are several reasons why savers win in the end.

It took two years after finishing grad school to realize that I was in trouble and unhappy. I was aspiring to be someone–someone who isn’t even really happy.

It took a while, but it sparked from my will to change.

One day, I woke up and realized that this wasn’t me–I could do better than this. I don’t want to be a loser anymore. Slowly and surely, I’m picking myself up from the self-inflicted financial wounds.

I was fueled with an illogical that I might not be living my life to the fullest. My next realization is that I can’t really spend for everything, that would bankrupt me.

Frivolous spending reflects irresponsibility. Big spenders are afflicted with FOMO and make impulsive decisions (and purchases). Big spenders don’t know what they truly want in life, in fact they try to have it all.

Frugal is not cheap. It’s mindful spending.

Mr. Cheap only cares about the price.
Mr. Frugal cares about value.

Mr. Cheap is guilty about spending anything.
Mr. Frugal invest on the right things.

Mr. Cheap is too cheap to spend on his friends.
Mr. Frugal treats people he loves and values relationships.

Mr. Cheap vs. Mr. Grugal

It’s not about being a spending generalist; but to spend on your priorities. Knowing your priorities start with knowing your purpose, defining your WHY.

I’ve adopted a simpler lifestyle and healthier mindset– I realized that I can do away with a lot of stuff (things, activities, people, etc.) that I kept for a long time.

Savers focus on what’s important in their life. Thrift isn’t about being cheap. It’s about making mindful choices and a conscious choice to simplify your life.

High spending builds a world we won’t like.

Big spending not only affects your own personal finances, it affects the world too. Big spenders imagine that they can throw garbage away and it would just magically disappear. (5)

High spenders build a world based on predatory capitalism–creating social issues rather than solving them: child obesity, ocean pollution, waste production, among other concerns.

After COVID-19, Frugality will be the norm.

In our lifetime, we have seen two major global crisis during our lifetime: the 2008 global financial crisis and the COVID pandemic.

A lot of middle, lower income households, never recovered financially from the global financial crisis 12 years ago. Americans have shifted habits from spending to saving to survive the economic fallout.

After COVID-19, Frugality is no longer a conscious preference. It’s now the default.

The pandemic has spread like wildfire shown us how fundamentally broken the system is: job insecurity, healthcare inequity, rent crisis, and corporate welfare.

Thrift is now gaining more ground than ever–where it used to be on the fringes, practiced by eccentrics in the form of Steve Jobs and Keanu Reeves–nowadays, minimalism and frugality has been more ‘commonplace’.

COVID-19 pandemic has exacerbated and sped up the shift to frugality. Frugal and minimalist lifestyle is going to be the norm, and this great social shift is not going to revert anytime soon.

We will save not for a rainy day, but we’ll save for several years-long deluge.

The shift towards thrift has even reflected in numbers. personal savings rate in the United States has jumped from 8% in February to 13% by March. A pessimist would say it’s too late, as we’ve been overspending for decades.

The pandemic crisis has forced us to shift to a more frugal lifestyle, and that shift is not reverting back anytime soon.

We have learned from the pandemic to rely less on others and more on ourselves. We’re reverting back to growing our own food, working out in our own homes, and saving our own asses.

To survive, millennials must shift to the frugal lifestyle.

The Millennial group, also dubbed as Generation Y, Generation Me, Digital Natives and Generation Rent (3) is the most studied, most misunderstood, most struggling age group there is.

Because of the two major crisis happening in our most productive period in life, millennials are in a more precarious situation than other age groups.

We are the lost generation that are weary, wary, and neck-deep in student loan debt (4). Most millennials are struggling in the fiercely cutthroat job market, and competing against other people, robots and AI for jobs.

Home, car, nice things–the aspirations to own things are not gone.. You can see how Pinterest is filled with interior design porn, or how we follow rich kids on Instagram to envy the things that most of us lacked.

Worse, there is more peer pressure called the social media where we are being audited 24/7 by strangers based on our posts, tags, and check-ins.

Everything is busy keeping up with appearances.

The less you spend, the more you can invest.

The difference between the money you make and the money you spend is the money you use for wealth building. The less you spend, the higher the difference. The higher the surplus, the more you have for investment opportunities.

There is a difference between saving vs. investing. Investing is glamorous and cool, saving is corny. However it’s important to having the right defenses first before you go on offense. Read: Saving vs. Investing

Thankfully, I have zero credit card debt now, and I am strengthening my savings and growing my investment portfolio.

I haven’t reverted back to my high spending lifestyle. I’ve learned to say no. I spend my time, effort and money on priorities, and now there’s less chaos and more clarity in my life.

How to be Frugal – Tips

Here are some tips that can help you reduce your expenses dramatically:

Food and Shopping

  • Cut out vice commodities: smoking, alcohol, drugs. Not only are they bad for your health, they also make a big dent on your pocket.
  • Same goes for sugar. It’s a vice commodity, too.
  • Quit shopping for the sake of shopping. Meticulously separate needs from wants.
  • Always make a list when you shop–for groceries, clothes, home appliances, etc.
  • Have a budget and stick to it.
  • Buy in bulk.
  • Learn how to cook your own meals.
  • Buy a chicken whole versus parts.
  • Do not buy bottled water.
  • Practice minimalism.
  • Eat in moderation. Cut down snacking between meals.
  • Plan your meals in advance.
  • Never go grocery shopping when you’re hungry.
  • This extends to looking through food delivery apps and FB groups. Don’t look at them when you’re hungry!
  • Sell things you don’t need: your Xbox, Playstation, TV, etc. It’s time to be an adult. Sell them off at Facebook Marketplace or barter them for items with more productive output (such as a microwave oven).
  • Opt for quality over quantity. Buy clothes less frequently, but invest in high-quality pieces. Avoid fast fashion altogether.
  • 90% of the items on sale, you don’t need.
  • Opt for timeless classics that never go out of fashion. A white shirt and jeans has been my staple since college.
  • Do not upgrade your smartphone every year.
  • Track where your money goes. Have an expense journal or use a budget app where you take note of every expense–from brunch bill to parking fees.


  • Credit card interest rates are the worst debt to be in, nothing is worth the 3.5% interest rate.
  • Never use credit card for credit. Pay your credit card bill full on time.
  • Don’t be in thousands of student loan debt for a liberal arts degree. It’s not worth the ROI or lack thereof (from a writer I admire, Ann Patchett)
  • The only kind of debt that is okay is when you buy for assets whose value is likely to increase, such as home or property. Don’t be in debt over things that diminish in value the moment you buy them. (Also Read Kevin Kelly’s 68 Bits of Advice)
  • Set up circuit breakers. If you do get sudden windfall: an annual bonus, a sales commission, a tax refund, an inheritance, put it away immediately for investment in order to avoid spending it carelessly on impulsive purchases. You can put it in money markets (stocks or funds) and high-interest bank accounts (digital banks).

Home and Car

  • Learn to do basic DIY around your house to save you money rather than paying for a handyman.
  • Swap your bulbs for LED lightbulbs.
  • If you can, use public transport or bike to commute.
  • Upgrade your air conditioning unit to save on electricity immensely. The newer A/C models have vast improvements in energy efficiency and cooling power.
  • Learn how to do your own taxes, or at least understand how taxes work in your country. Be timely with your tax filings to avoid future payment issues.

Health and Fitness

  • Stay healthy. This is easier said than done.
  • Staying healthy can save you tons of money on hospital bills and medicine in the long run. Prevention is better than cure.
  • Sleep 8 hours a day consistently. Don’t be ashamed to take a power nap.
  • Exercise or engage in sports that will give you moderate stress to your body. Take extra care of your teeth, ears and knees.
  • Exercise is important, but you don’t need to spend a lot of money on it too. I’m sure you can get exercise without that premium gym membership or high-grade equipment. e.g., I prefer the freedom to exercise at home or outside with little equipment except a mat, hence I find yoga and mat pilates to be perfect for me.
  • Get good health insurance. Get good health insurance while young and get above average coverage. The cheapest, low-bracket insurance is mostly useless–understand your coverage that will shield you and your bank account in case of medical emergency.


  • Ditch fake friends, avoid high-maintenance relationships, and toxic people that will undermine your vibe and your efforts. You need to surround yourself with people who are positive, resilient, and enthusiastic.
  • Love is a bad investment… when you’re with the wrong person. Choose carefully.
  • You are the average of the five people you spend the most time with.
  • It’s better to be alone than being surrounded by negative and toxic people.
  • Remove social media apps on your iPhone so you can only access them on your desktop. You will reduce wasted time significantly. No one has ever regretted not spending enough time browsing on Facebook and Instagram.
  • Modern dating is a mess now, there are so many options there in apps and online. Stick to one. It’s less expensive that way.
  • Just like in material things, opt for quality over quantity when it comes to relationships. Invest in high-quality relationships. Focus on depth, not spread.
  • Stop impressing people. We’re now living in a world where we have constant social media pressures to keep up with the lifestyle of others. Not everything is what it seems, other people may be deeply in debt trying to afford the lifestyle they can barely afford.

Among the four functions in Financial Planning, Reducing Expenses is the easiest to do because this is the part where you have the most control. NEXT STEP: Let’s look into ways where we can increase income.

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