Posted on November 11, 2011 by Kathryn Hawkins

Maybe you’re not raking in the big bucks. But so what? Frugal living is entirely possible. You can live a satisfying life even if you only make a modest income. Try these tips for building a rewarding life, no matter how much is in your bank account.

1. Forget about the Jones.

Society can be competitive, and it’s a natural instinct to want to keep up with your friends and neighbors: If your sister’s just gotten her kitchen remodeled, you need granite countertops too, right? Try to resist the urge to compare and compete, and focus only on what’s actually necessary, rather than what you’d love to have in an ideal world. It’s easier said than done, but if you can get over the jealousy issues, you’re likely to be a lot happier with what you’ve already got.

2. Think small.

Sure, we’ve always been taught that bigger is better, but by choosing to live in a smaller home, you’ll have more money to spend on the things that matter most to you. A New Yorker named Luke calls a 78-square-foot New York City apartment home; most people won’t want to downsize quite so dramatically, but if he can be comfortable there, chances are, you can give up a bit of your extra space for the sake of spare cash.

3. Focus on home cooking.

Dining out at restaurants is one of the fastest ways to blow your budget. If you don’t know much about cooking, buy yourself some basic cookbooks like Mark Bittman’s How to Cook Everything, and start experimenting in the kitchen. Instead of asking your friends to meet you at a restaurant for a meal, invite them over for dinner instead. You’ll still have a great time talking, but it won’t cost any more than the price of a few grocery items.

4. Shop Craigslist, Freecycle, and thrift stores.

You can save hundreds of dollars each month if you skip department stores and malls in favor of the secondhand shopping market. Whether you’re seeking furniture, electronics, clothing, or a car, take a look at what others are selling or giving away before heading to the shops. Chances are, you’ll be able to find a gently used item for a fraction of the retail price—or even free.

5. Love your local library.

Rather than buying books or DVDs, borrow them from your local library at no cost. If the selection is limited, check your library’s website to find out about reserving items: It’s likely to have an interchange program with other libraries in the area to provide a greater variety of choices.

6. Don’t go without health insurance.

If your budget is limited, it may seem tempting to go without insurance, but it’s not worth the risk. If you became ill or injured, you could end up hundreds of thousands of dollars in debt. Depending on your income level, you may be eligible for government assistance in financing your health care; check out health.gov to learn more about your options.

7. Get outside.

Most outdoor activities—a trip to the beach, swimming at a local lake, or going hiking, to name a few—are free or very cheap. Commit yourself to discovering the natural beauty in your own area: If you have kids, planning weekly outdoors excursions is a great way to help them grow up with a love of nature.

8. Downsize your lifestyle.

Create a realistic budget that shows your monthly income and expenses. If you’re finding that you don’t have any money left over at the end of the month, or are going into debt, it’s time to rethink some of your expenses. Could you cancel your cable TV service and watch your favorite shows on the web instead? Think about what you’d feel comfortable living without, and cut back where you can.

9. Save money for goals.

Once you’ve downsized your lifestyle, you should have enough money to start saving a bit every month. Consider what long-term goals are most important to you: Do you want to save for a down payment on a house, or plan a trip to Italy? Assess how much you’ll need to accomplish that goal, and measure your progress each month until you get there.

What have I missed? Any other tips to have a frugal and rewarding life? Add your comments below.