Times are tough and money is tight. Not too many people are going to argue with that statement, but is that necessarily all bad? I don’t happen to think so. I believe now is the perfect time to embrace frugality. Not as a temporary fix for what ails us, but as a permanent lifestyle.

So, what does frugal living look like? l hope you aren’t envisioning deprivation and sacrifice, because if you are you’re way off base. Frugal living is smarter living. It’s about making choices that will allow you to live the kind of life you dream of. Do you dream of travel, giving to charity, funding a fat retirement account or being debt free? It’s all possible when you embrace frugality.

Here are the basic tenets of frugal living:

You’ve gotta know your money, honey! That means where it comes from and where it goes. It means getting up close and personal with your bills and income statements. How do you feel when you look at where your money is going? Is anything a surprise? The subject of money often makes people really uncomfortable, but if you don’t take ownership of your financial situation you are effectively denying yourself the life you want.

Budgets are our friends. A budget is a plan of action. It’s a living document. A budget doesn’t stop you from buying anything, but it certainly can help you make better decisions about what to buy.

Creating a household budget should cause you to think about what’s really important in your life. Question every expense (not do you really need it, because we don’t ‘need’ most things), ask yourself if it adds to the quality of your life in a way that nothing else can. Does your weekly brunch outing genuinely fulfill you and make you feel connected to your friends? If so, it should stay in your budget; if not, skip it and put that money toward something more important.

Most people can see the obvious waste. Like the gym membership that never gets used. As painful as it might be, it’s time to make that phone call and cancel it. Other expenses may need to be broken down. For example, if you have cable or satellite, question whether the platinum package is necessary. Are you really watching all the channels you subscribe to? Would the basic package be acceptable? Try it out for a few months and I am betting you won’t switch back, especially when you see the savings. I happen to be TV free (thanks Hulu!), but that choice isn’t for everyone.

Get smart about where your money goes and always be strategic in your decision making. Before you make any purchase ask yourself if the action will move you closer to your goals or just give you momentary gratification. Momentary gratification is wasteful. It’s like throwing money off a bridge and you wouldn’t do that, would you?

What are your long term dreams? Do you have a plan of action for reaching them? Budgeting is your chance to lay the groundwork to make it happen. Figure out what you need in order to make your goals a reality and start saving for them now. Every dollar saved is a dollar you can put towards your dreams. Instead of thinking about budgeting as a cost cutting measure, think of it as dream funding.

Frugal is not cheap. It’s worth repeating – frugal is not cheap. And don’t confuse cheap with inexpensive. Inexpensive implies not expensive, but cheapness almost always causes us to spend more money than initially planned. More often than not when we ‘cheap out’ on something we regret it. Sometimes it’s just an inconvenience and sometimes it causes serious distress. Cheap is about saving a buck now without thinking about long term consequences.

Cheap is not smart. If you shop only by price you deserve what you get. This isn’t to say that the least expensive option isn’t sometimes the best. Sometimes it is. Being frugal is about making sure your choice is going to serve you well today and tomorrow, so be a savvy shopper and do your research.

You must stretch your comfort and creativity zones. Does the thought of shopping at a thrift store make you uncomfortable? Well now is the time to get over your discomfort and get acquainted with the plethora of resale shops and thrift stores that are out there. You’ll be surprised with who’s shopping ‘thrift’ now. And because of the changing customer base the stores have stepped up the presentation. Often it’s only the pricing gives away the fact that you’re in a second hand shop.

Garage and tag sales are another option. As always, the standard rules of shopping apply, use a list, don’t deviate from it and stick to your budget.

Never used coupons? Get clipping, but remember to buy only what you’ll actually use. A deal is not a deal if you won’t use it, don’t need it or don’t like the product.

Get creative and re-purpose what you already have. For instance, a chest of drawers taken from a bedroom can become a sideboard in a dining room. Spruced up with a coat of paint and fresh hardware, it will look like a completely new piece.

We all have special skills. Why not barter? If you’re a whiz at sewing offer to do some mending or make alterations in return for an oil change. Swap a massage for a hair cut. Sound crazy? It’s not. It is done all the time. You just have to ask. Once upon a time bartering was a way of life, there’s no reason you can’ t revive the practice.

Look at creative ways to meet a common need. Let’s use childcare as an example, it’s a big issue and expense for many families. Suppose you’re craving some adult only time (and really what parent isn’t), you could form a neighborhood babysitting cooperative. You’ll want to set clear ground rules, but that’s totally worth the effort. Just imagine, booking a sitter without having to hand over a bundle of cash.

Frugal living isn’t about giving it all up. It’s about being selective, being smart and knowing that living well on less is not only possible, but it’s the fastest way to fulfill your dreams.

Have you already embraced frugality? Share your frugal living tips with us by entering them in the comment section. Happy savings!

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