frugal living tips no matter what your cost of living

Frugal Living Tips To Save Money When You Have a HCOL

As someone who lives in a HCOL area, I can attest to how difficult it can be to save money. Even as a physician, I have to be careful because with my high paycheck also comes high income taxes (if you live in a state without income taxes, this becomes a bit easier). Frugal living has helped me to save judiciously each month while still investing and has not taken away my ability to enjoy myself.

What follows in this post are some frugal living tips that I have incorporated in my life, that have helped me to spend wisely on things that truly matter to me, and have helped me avoid lifestyle inflation.

To start:

What is HCOL?

HCOL stands for “high cost of living”. Depending on where you live, this can vary greatly. Some popular HCOL areas include New York and California (I’ve somehow managed to live in both).

Living costs generally include housing, food, and transportation as the biggest cash cows. However, HCOL areas also tend to pay more to help cover these costs.

Living in a HCOL

A common misconception about the high cost of living areas is that you won’t be able to save money. That is not the case. Just as it’s true that living in a low cost of living area doesn’t guarantee that you can save more.

How Can You Live in a HCOL and Still Save?

Break Down Your Expenses

You have to break down your expenses. It doesn’t have to be super specific line by line budgeting in order to live frugally, but you do need to be aware of fixed and variable costs.

Fixed Costs

These are as they claim, fixed. This will include your rent/mortgage, car payments, insurance payments, etc. You have to pay these each month and they are constant, meaning the price doesn’t fluctuate on each bill (unless of course you refinance, or re-negotiate something).

No matter what you have to pay these.

Variable Costs

These are required costs, however, they vary each month depending on usage. For instance, groceries, electricity bills, water bills, gas costs, etc.

Recreational Costs

This is the category we use for fun. These are not required for day to day life, but they are required in order to fulfill your wants. Fixed and variable categories are your “need”.

What goes in this category will be different depending on your wants, your bucket list, your goals in life and the things that make you happy.

Please do not add things to this category just because people you know are doing it!

Investment Costs

This is also not required, however, I give it a separate category because I don’t consider investments to be recreational. Rather this is a way to make your money work for you.

Investments will vary from person to person as well. This can include money put into ETFs or mutual funds; in real estate investments; or the stock market, to give a few examples.

Not everyone has the ability to do this, but if you can, it’s worth noting that you can think about this as either a regular payment into your investments or as a percentage of your income. In other words, this can be fixed or variable.

How To Save In a HCOL

Why did I break up the costs the way I did? I believe that we have to view everything as either in our control or out of it. Since you can’t do much about fixed costs, the focus of these frugal living tips will be on your variable costs, the things you do have control over.

By viewing it all in this way, I think it makes it easier to understand where you can make changes, and then you also have a better handle on your fixed expenses for which you must make sure you cover.

I’m not going to go into detail about how to handle your expenses, but rather I will try to give you ideas to save where you can. Some of these I’ve done and still do. Some of it make not seem like it’ll do much for you, but let me tell you, every little bit that you save will add up.

So, the first things you’ll do

  • Take care of your fixed expenses
  • Invest consistently where you feel comfortable (the amount depends on your budget)
  • Save into your emergency fund for a rainy day (at least 6 months worth)

Every so often, I recommend you look over your fixed expenses and call your lenders, banks, providers, etc. and see if there are ways to reduce this at all, or bundle payments so that you can save.

Remember also, once your emergency fund has been built up, the amounts that you were putting away there can be re-allocated where ever you need them. (For instance, I shifted my extra money to pay off my student loans)

Of course investments and emergency funds aren’t necessarily required in life, but they are highly recommended.

Next, Develop a Frugal Living Mindset

Once your fixed expenses are out of the way, the rest is up to you to control. In order to abide by frugal living, you need to get into that mindset. You are in control of where you spend your money and you should use that power to make sure you do everything possible to spend it wisely.

The biggest thing to understand, I think, is that this entails living below your means. Remember, just because you have the money, doesn’t mean you should spend it.

Some frugal living tips that I keep in mind and take with me wherever I go:

don’t buy things unless you need them

This is especially true in the beginning when you’re starting out in your HCOL area. If you’ve just moved, then keep your recreational expenses to a minimum and see first exactly where your money is going, and what’s the most costly part of your day to day.

don’t get sucked into lifestyle inflation

Lifestyle inflation is the worst. Ignore your neighbors and whatever they’re doing. Focus instead on your own needs, expenses, and financial situation. I’ll also add, that you should delay any lifestyle upgrades until you get the hang of managing your finances with your HCOL (e.g. don’t buy a brand new car right away).

Stretch your dollar as far as it can go

When you do spend, get the most bang for your buck. For instance:

Look for the best deals.

Compare rates. If you can online shop, then use ebates or other cashback apps to help you save. Bargain shop whenever possible – sales, outlet stores, etc.

Trust me, you don’t need to pay full price to get great quality items.

consider bulk spending

This can help you save in the long run, especially if you have families. Costco and Sam’s Club memberships work really well here.

I’ll also add gym memberships to this. Sometimes, paying upfront for an entire year, for instance, makes the month to month cost cheaper.

Try to break down the costs this way so that you understand exactly how much you’re spending in each situation!

Don’t Sign Up For Subscription Services

This is specifically for groceries and delivery services. I genuinely think they overcharge you. Then there’s the aspect of you not picking your own produce and having to deal with what’s chosen for you. I’ve been disappointed many times. It may be more efficient from a “saving time” standpoint, so if that’s important to you then go for it and find a service that is reliable that you trust. But if you have the time to go shop yourself, I think you should.

Return items you don’t use or like

How many people go shopping, especially online shopping, get your stuff, and maybe it doesn’t fit right, or you’re kinda unsure. Now, how many forget to return those items sometimes? Make it a point that if you purchase something and it’s not working out, go and try to get your money back. Those few dollars here and there really add up.

Purchase Better Quality Items

Sometimes spending a little more upfront can save you in the long run. As I write this I’m thinking about clothes. Better quality clothes last longer, which means you have to replace them less often, which means you save on future costs.

Try your hand at DIY

For anything that needs to be fixed – see if you can do it yourself first. Youtube is a great resource, as is a simple Google search. Must of the maintenance around your home, or for your cars can be done yourself. It takes a little extra time out of your day, however, the savings can be huge.

I’d also recommend you expand the DIY concept to other areas. Gardening, for instance. Make your own compost, buy solar lights, and install them yourselves. For decorating there are tonssss of ideas on Pinterest and Instagram for great ways to repurpose what you already have.

Day to day Spending

For the random stuff you can do on a daily basis, consider this:

  • Save on utilities by avoiding high usage during expensive, peak hours of the day. You can also consider investing in something like a Nest thermostat where you can control settings from your phone.
  • Don’t buy anything on credit unless you can pay it off right away (i.e. this double checks that you can actually afford it!)
  • Think twice about your subscription services for anything. Do you really need Hulu if you already have Sling TV? Are you actually reading the magazines that show up at your door each month? How many HelloFresh meals have you actually had/made or like?
  • Consider discount grocery stores – trust me, they’re fine. You don’t have to use them for everything, but certain items here can save you a lot.
  • Try to cook at home versus eating out and attempt to reduce food waste

An example of utilities and water, there are times where the cost of usage is much higher because that’s when it’s anticipated that people need to use more. To give an example, my area in California has a peak time of 4 pm to 9 pm. I avoid turning on the dishwasher or doing laundry during those hours. I also try not to have the AC or heater on then either. I have noticed a significant drop in my bills by trying to be cognizant of this.

For fun

Going on adventures around your new home can be super exciting, however many of them can cost you. Don’t brush off the free things to do in your new hometown. For instance:

  • Visit parks, museums, go to the beach (if you live near one), go hiking, play outdoor sports, go for picnics

If you’re unsure about how to afford a vacation, then consider staycations over big international trips – especially in the beginning when you’re still trying to figure out your spending and saving ability. When you do go on international trips, create a travel budget, and save up for them separately.

When you do plan an evening out on the town or to go out to eat, look for and attend happy hours, and look for discount events so that you don’t have to pay full price for those drinks. I’d also use Yelp check-ins. Often, checking in to a restaurant or bar will get you a free appetizer or drink. You just have to show the waitstaff your app!

A comment about the frugal living mindset

I’d like to just say, that everyone’s level of tolerance or willingness to go the distance to save will be different. The differences arise as a result of our priorities and what sacrifices we are willing to make. For instance, for me, I find it worth it to drive a little farther away in order to save on groceries. Others, though, may not find that kind of effort to be worth their time.

The idea here is to find what works for you and capitalize on it. Sometimes we don’t know how or where we can cut costs until we try. So, get out there and see which of these frugal living tips help you save, and incorporate whatever works into your regular routines.

Adjusting to a HCOL Area

Adjusting to a high cost of living, and getting into that frugal living mindset, can be really difficult and can take time. The biggest thing is to give yourself that time to settle down and figure out what your expenses are. Once you know and get the hang of what to expect, it becomes much easier to splurge here and there or treat yourself.

To give an example of when I first moved to southern California:

  • I moved to a cheaper rental (relatively speaking)
  • I had an old car (2003 model) and I kept it for at least 2 years after moving
  • In the beginning, I just went wherever I could find supplies. As time went on, I did a little more research and became more specific with my shopping
  • I didn’t buy any new clothes/shoes or do any shopping for fun for the first six months
  • I needed new furniture, so I focused on only figuring that out in the beginning
  • Much of the local exploring I did was by walking/wandering around the different neighborhoods

These steps helped me to avoid extra costs for the first few months while I adjusted to my new home.

What Happens When You Can’t Save?

At some point, cutting expenses will reach a plateau. There’s only so much you can do especially in a HCOL area. Plus, there’s the whole “needing to have fun” aspects of life as well. There’s no point in saving so much and working so hard to cut costs that you stop enjoying yourself, or end up super stressed out. While it’s important to do save and invest, life is short and also needs to be lived.

In which case, if you’re finding it difficult to save, despite living frugally, or are finding yourself to be super unhappy, then maybe consider alternative ways to increase your income or make extra money.

This can mean you work longer hours, extra shifts (for doctors this may mean extra call), or, for some, you may need another job to help provide you with the cushion you’re looking for. I know several physicians who take extra calls when they know they have big expenses coming up, like home renovations or a big trip. So this is not necessarily something you’d have to do all the time.

I would also argue, if possible, to negotiate a higher salary when you’re able to. Too often money is left on the table because we are fearful of asking for it!

Some Intangible Money Saving Moves

This section isn’t about frugal living, however, it is a way to increase your net worth and improve your ability to save. I call these intangible because you won’t necessarily see your bank balance go up right away with actual cash. Rather, you will see a difference in future savings, or save on future expenses. Something intangible may not be as exciting as seeing something tangible like your bank balance going up, however, these are super effective ways to save a ton of cash and ultimately increase your net worth.

Tackling Debt

This is and will always be something that I argue for: pay off your debts.

The more debt you have, the more payments you have to make each month, and the harder it is to save. However, if you’re able to abide by even some of these frugal living tips and send extra money towards paying down all that you owe, you will come out winning on many fronts.

For instance:

  • The final amount you repay will be far less than if you keep making minimum payments because you will save on interest accumulation.
  • Your ability to save AFTER you’re debt-free will be exponentially higher and faster.
  • Your ability to really go after those lifestyle upgrades you want will also improve as you will easily be able to take on new debt (if you want) for those purchases.

For anyone who thinks that paying debt reduces their ability to live and save now: think of each repayment as a saving in interest. BAM that’s your savings! It’s not literal money in the bank now, but it is literal money in the bank in your future. And yes, the future matters too :).


This is not a savings account that you have access to, but it is an important one to have and think about. I know someone making 20k + per month after taxes and pours all of it into her student loans (yay!), but is NOT putting away for retirement…at all.

That’s not good either.

One way to view this: everything you stock away into retirement accounts, especially pretax accounts, will save you in taxes each year. Over the last few years, I’ve worked less, saved more into my pretax retirement accounts, and taken home the same amount after taxes. It’s kind of insane to think about.

Bundle Payments

Expenses like car and rental/homeowners insurance? See if you can bundle them. Oftentimes you’ll get a discount this way.

To Summarize

These frugal living tips and money-saving moves have helped me to pay off debts, buy a new home, and still live my life in a way that is fun and comfortable for me. My priority is to travel, and so much of my recreational expense goes there.

By developing a frugal living mindset and being careful about my spending I’m still able to save while living in a high cost of living area. Don’t get me wrong, I’ll still splurge and have my moments of “lets do this”, but my overall lifestyle reflects one that lives below my means.

You can start living frugally at any time and still enjoy yourself and have luxuries in your budget that are personal to you. As you can see, many of my examples aren’t just about saving money, but about spending it in the best way possible. Try some of these tips and see if they help you!

Images courtesy of unsplash.

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