5 Tips for Frugal Living That Won't Leave You Feeling Miserable

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CPA and financial expert Clare K. Levison wants you to know being frugal doesn't mean you have to give up on living the life you want. Her new book, "Frugal Isn't Cheap," offers practical tips and real-life stories about ways you can amass a solid savings account while juggling expenses.

"I wanted to get the message out that you can have a great life, really a better life, if you learn to live frugally and to save money," says Levison. "People think that means you have to scrimp and be miserable, but it really means that you need to take the emphasis off your possessions and material things. You need to focus more on free things like spending quality time with your family and friends."

Levison says she wrote her book in order to encourage people to practice frugality so it becomes a permanent practice. "The better you get at being frugal, the more fun it is and the more motivated you are," she says. "Being savvy financially is liberating. You're not beholden to banks, credit card companies, or to your parents when you have financial freedom." Here are some of Levison's tips for living frugally.

1. Find a way to save every day.

Everyone can find one thing they can save money on every day, says Levison.

"If you have a closet full of name-brand clothes and shoes, you should realize that if you have self-confidence and style, you don't need to accumulate all these clothes," says Levison. "You don't need to look frumpy, either. A $15 sweater from a sale rack or a consignment store can look just as good."

Skip the designer clothes -- or find other simple ways to save, such as, say, renting a DVD instead of going to the movies -- and put the saved cash in a jar. "Just seeing the cash add up in one week makes you believe you can really start to save money," Levison says.

If you use a debit card instead of cash, scoop some of the balance from your checking account into savings at the end of each week for a similar effect.

2. Start an automatic savings plan.

After you've begun the process of saving a little every day, Levison recommends transferring money out of every paycheck into a savings account. She suggests saving 20 percent of every check, but since that's a lot to tackle all at once, she says you can start with a smaller amount and reassess every three months. "Gradually work your way up to 20 percent," says Levison.

One caveat: If you have debt, Levison recommends only establishing a $1,000 emergency savings fund rather than funneling all your extra cash into a savings account. "Split the money you would be allocating to savings 50-50 between your debts and building that $1,000 fund," she says. "Once that's established, put every extra dollar toward eliminating your credit card debt."

3. Make a list of goals.

Levison recommends writing down a list of your priorities, such as saving for a new home, starting your own business, remodeling your home, or buying a nice retirement condo in Florida.

"Having goals that are exciting to you makes it easier to stay focused," says Levison. "Your savings should go to things that are a good long-term investment in your future."

For a short-term goal like saving for a vacation, Levison suggests finding a way to carve out extra money from your entertainment budget by cutting back on things like eating out.

"Beware of saving money and then spending it on short-term pleasures," says Levison. "Think of being frugal as building wealth for the long term."

4. Find a way to increase your income.

Sell your stuff on eBay or Craigslist, says Levison, and you'll simplify your life as well as bring in extra income. Do contract or freelance work in addition to your regular work, offer singing or music lessons or tutoring -- anything to generate extra money.

"Any extra income should go directly into your savings," she says.

5. Become a bargain hunter.

Get in the habit of seeking out the least costly options in every way, both big and small, says Levison.

"Start small with things like buying generic medicines and then adding the difference in cost to your savings account," says Levison. "Shop for deals and stay in a less expensive hotel while on vacation. When you get into larger purchases like cars and a home, your habit of choosing less expensive items will filter through into all your choices."

Levison says learning to trim your spending will free you to build a savings safety net and to accumulate long-term financial stability.

Michelle Lerner is a contributing writer to The Motley Fool. Try any of our Foolish newsletter services free for 30 days.

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