Secrets of the Frugal Lifestyle

I’ll admit I used to think frugality was a distasteful lifestyle forced upon the poor. I believed “frugal” was synonymous with never buying new clothes and dumpster diving under cover of night; that it meant cheap and slovenly.

Boy, did I have a lot to learn. And learn I did—and continue to learn—that frugality is the path to building wealth on any income.

I’d say the most fun I’ve had learning the fine art of frugality has been reading The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko.

Dictionary says

Webster’s defines “frugal” as behavior characterized by or reflecting economy in the use of resources. The opposite is “wasteful,” a lifestyle marked by lavish spending and hyperconsumption. Wealth has nothing to do with how much you earn, but what you do with it and how much you keep.

Meet Kieffer

Ask most people to name a financially savvy American and a regular guy like 41-year-old Paul Kieffer, profiled several years ago in Money Magazine, wouldn’t even be in the running.

At that time, Kieffer lived in St. Charles, Minn. (pop. 3,735), spent about $38,000 a year to support his wife and two kids, drove a three-year-old car he bought used, refused to sign-up for cable TV, and worked six days a week at the local Red Wing shoe store.

Oh yes. Kieffer also happened to own the store as well as five trailer parks in the St. Charles area, which gave him, at the time, a net worth of $1.4 million.


The reason folks like Kieffer are financially independent is that they live understated lifestyles. They live frugally. They aren’t showy but are careful how they spend and invest their money.

Stanley and Danko identify the self-imposed rules of self-made, wealthy Americans:

7 Secrets of the Frugal Lifestyle

1. Live below your means

Spend less than you earn. Reduce your spending as necessary to save 15-20 percent of your annual income before taxes.

2. Meticulously budget your spending

Make a belt-tightening plan for everything you spend and do whatever it takes to stick to it.

3. Take on secured debt sparingly

Every dollar you pay in interest is one less you have to invest. Unsecured debt is not in the vocabulary of the authentically wealthy.

4. Participate in serious tax sheltering

Pay as little as legally possible in income taxes by maxing out on contributions to tax-deferred retirement accounts.

5. Launch a disciplined investment plan

As important as the amount of money you put away now is establishing the habit of regular investing.

6. Get help from a sharp fee-only financial advisor

Such a professional can assist with a wide range of financial needs for a flat fee. To find a good one, go to the National Association of Personal Financial Advisors website, Another useful resource is Garrett Planning Network:

7. Work hard—ideally in your own business

Salaried workers are pretty much limited to what an employer will pay them. Savvy business owners can grow their business and thereby increase their income.

couple piggy bank money

Keep this in mind as you consider what role frugality will play in your household and your life: Many of the people who flaunt the trappings of success often have little wealth. I’m told that Texans describe these people who live flashy lifestyles in a straightforward yet colorful way: Big hat, no cattle. And that about says it all.

MORE from Mary:


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7 replies
  1. Anne says:

    Mary… where do I begin??!! I’ve read your books many times over the last 10 years and always found them insightful and inspiring. But it took some time to get my husband on board. He had the mindset that a budget would feel restrictive. We worked hard and paid our bills but were in an endless cycle of debt. Finally, two years ago, we jumped in and set up a plan that included a contingency savings and a freedom account.
    Two more months and we will have $20,000 in unsecured debt paid, $3,000 in our contingency fund, numerous line items in the freedom account so we have the funds as bills come up, and a tithe section to donate and share with others.
    We did all this even though we made LESS income this year (Just to put into perspective, we only gross $70,000 a year)
    It works. We feel blessed. Thank you for the guidance and insight that you share.

  2. Judith Rettich says:

    I want to warn about a dishwasher detergent commercial that says, “save water and don’t rinse your dishes”. I tried that and within 8 weeks I had to pay my handyman to come in and take my dishwasher apart and clean the filter, because the water was not draining out. Unless you have a top-of-the-line dishwasher that grinds food particles, do not load your dishwasher with dirty dishes that have lots of food particles still on them…unless you have the tools and skills to clean the fliter yourself. Otherwise, dirty dishes with food particles may clog your dishwasher and keep it from draining, resulting in a handyman or plumbers bill

    • Mary Hunt says:

      You should ALWAYS scrape off any and all chunks of food with a rubber spatula. Always. Beyond that rinsing is not necessary.

  3. Sandy Hogan says:

    I love this article I love dumpster diving and yard sales and second hand stores. I have done it for 47 years and to me it is fun, enjoyable and the money I save is unreal. Thanks so much, love it. We must just be down to earth, and keep pushing to save, I also believe we are much more happy.


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