How to Live Frugally

by Michelle Lasley

Michelle Lasley is a mother, wife in Pacific Northwest learning to balance green dreams with budget realities.

December 28, 2008


Categories: Family

This seems to be a common search as of late, and it keeps popping on my blog “What does it mean to live frugally?” That blog was more of a rant on how we are treading the waters where we swim. I’m not sure I really know how to live frugally. I have learned a few things over the years and past few months, and those are:

  • Track your expenses (write everything down)
  • Create a budget
  • Use a Baby Step Method, I like the following:
  1. Create a $1,000 emergency fund
  2. Pay off debt (except house) with debt snowball
  3. Add to started emergency fund, finishing at 3-6 months of living expenses
  4. Retirement plan
  5. College fund for kids
  6. Pay off house
  7. Be charitable

I use Franklin Covey planners, and they have an envelope form where we keep our monthly receipts.  From there, I transfer the amounts to an excel sheet I created to track our expenses.  I track all our expenses, everything we spend with cash and the debit card and our fixed household expenses like rent and utilities.  I also utilize another spreadsheet to track how our expenses compare to our income.  I update both at the end of the month and share with my husband where we are.  We talk about everything and make even grocery shopping trips joint decisions.

Larry Burkett was the first to spell out for me where our money should go.  I never knew before how much I should be spending on rent and utilities, for example.  It’s difficult to make a budget if you don’t know if you’re spending too much.  Dave Ramsey has piggy-backed off Burkett’s framework and made it more flexible.  If you don’t have an automobile, for example, you could take that expense and put it towards your housing costs.  The breakdown is as follows, all percentages are based on income:

  • Tithe 10% of gross
  • Housing 38% of net
  • Auto 15% of net
  • Food 12% of net
  • Insurance 5% of net
  • Entertainment & Recreation 5% of net
  • Clothing 5% of net
  • Medical & Dental 5% of net
  • Miscellaneous 5% of net
  • Savings 5% of net
  • Indebtedness 5% of net

Dave Ramsey would probably say that you should take the last three, 15% and put it all towards debt if you have it, get that paid off, and live debt free.  Once you’re debt free then you can focus on his other baby steps (4 and beyond).

We are in Baby Step #2, but the freedom we both feel just being on a budget and keeping our expenses in check is amazing.  We know the end is in sight now.


  1. Lee Holcomb


    Great post, especially for those looking to “buckle down” this new year!

    Lee @ Crown

  2. Michelle

    Thanks Lee! Larry Burkett’s book was given to us as a wedding gift (one for couples), and it was a great eye-opener.

    I see a lot of “frugal blogs” now a-days, and it seemed their points can be boiled down to the ones I stated above and some basics in the sequel blog.

    I suppose it’s my way of trying to pay it forward until I have the time to volunteer or work more closely with those struggling.

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