frugal living tips no matter what your cost of living

Frugal Living Tips To Save Money When You Have a HCOL

Anyone who lives in an HCOL area can attest to how difficult it can be to save money. Even a high-income professional must be careful because a higher paycheck also comes with high-income taxes (if you live in a state without income taxes, this becomes a bit easier). Frugal living can help to save judiciously each month while still investing and maintaining life’s little pleasures.

What follows in this post are some frugal living tips that can you spend wisely on things that genuinely matter and 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.

How Can You Live in a HCOL and Still Save?

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.

Break Down Your Expenses

You have to break down your expenses. It doesn’t have to be super specific line-by-line budgeting to live frugally, but you 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, which are constant, meaning the price doesn’t fluctuate on each bill (unless you refinance or re-negotiate).

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, water, gas, etc.

Recreational Costs

This is the category we use for fun. These are not required for day-to-day life, but they are necessary to fulfill your wants. 

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, it’s a separate category because investments are not recreational. Instead, 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 in the stock market, to give a few examples.

Not everyone can 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

Hopefully, breaking down expenses this way helps to view everything as either in our control or out of it. Since you can’t do much about fixed costs, these frugal living tips will focus on your variable costs, the things you have control over.

In addition, it becomes easier to understand where you can make changes, and then you also have a better handle on your fixed expenses which you must ensure you cover.

First Things First

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

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

Of course, investments and emergency funds aren’t 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. You control where you spend your money, and you should use that power to make sure you do everything possible to spend it wisely. In order to abide by frugal living, you need to get into that mindset.

The biggest thing to understand 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 to always keep in mind:

Only Buy What You Need 

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

Avoid 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. Also, consider delaying any lifestyle upgrades until you understand your finances with your HCOL (e.g., don’t buy a brand new car right away).

Get The Most Bang For Your Buck

  • Look For The Best Deals. Compare rates. If you can shop online, use ebates or other cashback apps to help you save. Bargain shop whenever possible – sales, outlet stores, etc. Remember, you don’t need to pay full price to get high-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 well here. Paying for memberships upfront annually often can reduce long-term costs (e.g., gym memberships).
  • Don’t Sign Up For Subscription Services. Most sign-ups are cheap or free up front, and then we forget about them and forget to cancel before the cost increases. Review services you actually need and use and stick to those. Avoid anything that doesn’t serve you.
  • 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 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 can add up.
  • Purchase Better Quality Items. Sometimes spending a little more upfront can save you in the long run. For instance, better quality clothes last longer, which means you have to replace them less often, saving on future costs.
  • Try your hand at DIY. Try fixing things yourself! Youtube is a great resource, as is a simple Google search. It takes a little extra time out of your day; however, the savings can be huge.

Save on Day-to-Day Spending

For the random stuff, consider this:

  • Save on utilities by avoiding high usage during expensive, peak hours of the day. You can also consider investing in a Nest thermostat where you can control settings from your phone.
  • Only purchase items on credit unless you can pay them off in full (this double checks that you can actually afford it!)
  • Consider discount grocery stores – 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.

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, and museums, go to the beach (if you live near one), go hiking, play outdoor sports, and 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 go on international trips, create a travel budget, and save up for them separately.

When you plan an evening out on the town or 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.

A Comment About a Frugal Living Mindset

Everyone’s 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.

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 routines.

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 an HCOL area. Plus, there’s the whole “needing to have fun” aspect of life as well. While saving and investing is important, life is short and needs to be lived.

If you plateau, look for ways to increase your income, negotiate a higher salary when you’re able to, or look for more lucrative opportunities.

Some Intangible Money-Saving Moves

It’s important to remember that there are some intangible ways to save and increase your net worth. They are intangible because you won’t necessarily see your bank balance go up right away with actual cash. Instead, you will see a difference in future savings or save on future expenses. Something intangible may not be as exciting; however, these are super effective ways to save cash and ultimately increase your net worth.

Paying Off Debt

The more debt you have, the more payments you make each month, and the harder it is to save. However, if you can 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 becoming debt-free will be exponentially higher and faster.
  • Your ability to go after those lifestyle upgrades you want will also improve as you can easily take on new debt (if you wish) for those purchases.

If you think that paying debt reduces your ability to live and save now: think of each repayment as a saving in interest. 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 important to have and think about. 

One way to view this: everything you stock away into retirement accounts, especially pretax accounts, will save you in taxes each year. You’re paying yourself in the future versus paying the government now.

To Summarize

These frugal living tips and money-saving moves can help pay off debts, finance large purchases like buying a new home and still allow you to live life in a fun and comfortable way.

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 these examples aren’t just about saving money but also 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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