Frugal Living Secrets: 16 Ways Dave Ramsey Says You Can Build Wealth
Frugal living gets a bad reputation. People hear “frugal” and think of extreme penny-pinching, boring budgets, and saying no to everything fun. That’s not the reality. It’s about spending with purpose so money stops slipping away and starts working for you.
Dave Ramsey has spent decades teaching people how to take control of their finances. His advice is straightforward, no-nonsense, and proven to work. He believes debt is a trap, financial freedom is possible, and smart money habits are the key to getting ahead.
This is a breakdown of 16 frugal living strategies straight from Ramsey’s playbook. Expect straightforward advice on budgeting, saving, spending wisely, and making sure your money is actually working for you instead of against you.
Table of Contents
Create (and Stick to) a Zero-Based Budget
Ramsey doesn’t believe in vague budgeting. He teaches the zero-based budget, where every dollar has a job. No extra cash floating around, no money getting “lost” in the shuffle.
This means adding up all income, subtracting all planned expenses, and making sure the final number is zero. Every dollar gets assigned, be it for bills, savings, or paying off debt.
People who budget this way don’t wake up wondering where their money went. They already know. It’s about control, not restriction. When every dollar is accounted for, there’s no room for waste, no excuses for overspending, and no surprises at the end of the month.
A CFA’s Take on Dave Ramsey’s Baby Steps: A Young Retiree’s Comprehensive Analysis
Cut Up Your Credit Cards
Debt is a trap, and credit cards make it easy to fall in. Ramsey doesn’t just warn against them, he flat-out says to cut them up and never look back. The reasoning is simple: credit cards encourage overspending, rack up interest, and keep people stuck in a cycle of payments.
He teaches using cash or debit instead, which forces intentional spending. If there’s no money in the account, the purchase doesn’t happen. No temptation to “put it on the card” and deal with it later.
Credit card companies make billions off people who carry a balance. Ramsey’s advice? Stop giving them money and start keeping more of your own.
Related Video: Credit Card Secrets According To Expert With 800+ Credit Score
Follow the Envelope System for Cash Spending
Ramsey takes budgeting to the next level with the envelope system, a hands-on way to make sure cash goes exactly where it should. The idea is simple. Set aside money in labeled envelopes for specific expenses: groceries, gas, eating out, entertainment.
When the envelope is empty, spending stops. No swiping a card to cover the difference. This system forces discipline, helps avoid impulse purchases, and makes it painfully clear where money is actually going.
People who struggle to stay on budget often find this method a game-changer. It’s easy, visual, and impossible to cheat.
Buy Used, Not New
New things come with a premium price tag, and Ramsey doesn’t see the point. He preaches buying used whenever possible, especially on big-ticket items like cars, furniture, and appliances.
A new car loses 20-30% of its value the second it’s driven off the lot, while a quality used car can be just as reliable for a fraction of the cost. The same goes for clothing, tools, and even electronics.
Spending more doesn’t always mean getting more. Smart shoppers know that slightly used often means huge savings without sacrificing quality.
🙋♂️If this is interesting so far, follow DadisFIRE on MSN, then hit like to see more articles on financial freedom, personal finance, and smart money moves.💪
Use a Simple, Low-Cost Investing Strategy
Ramsey’s investment advice stays consistent: Keep it simple. No chasing stock tips, no jumping into risky investments, no falling for “get rich quick” schemes.
He recommends putting 15% of income into retirement accounts using straightforward index funds. No fancy strategies, just steady, long-term growth. The stock market builds wealth over decades, not overnight.
The best financial plan is the one that works, and the best way to invest is consistently.
Stop Keeping Up with the Joneses
Too many people go broke trying to impress people who aren’t paying their bills. Ramsey calls it like it is: a financial death trap. Chasing the latest trends, the newest gadgets, or the biggest house only leads to stress, debt, and wasted money.
As Ramsey puts it: “Live like no one else now, so later you can live like no one else.” That means making smart sacrifices today to enjoy true financial freedom down the road.
The Joneses aren’t worried about anyone else, and they’re likely drowning in debt. The smart move is ignoring them and focusing on what really matters, long-term financial security.
Stealth Wealth: The Key to Keeping Your Wealth and Your Freedom
Meal Plan and Avoid Eating Out
Dining out is one of the easiest ways to burn through a budget. Ramsey isn’t against enjoying a meal out, but frequent restaurant trips and takeout orders add up fast. The better option? Meal planning.
Taking time to plan meals for the week cuts down on waste, avoids impulse grocery purchases, and makes it easier to stick to a food budget. Cooking at home also costs far less per meal and is usually healthier.
It’s not about never eating out, it’s about making it the exception, not the routine. People serious about saving money know their kitchen is the biggest money-saver in the house.
Use Coupons and Cash-Back Apps
Ramsey isn’t a fan of extreme couponing, but smart discounts and cash-back rewards? That’s a different story. Using apps like Ibotta or Rakuten, checking for digital coupons, and stacking discounts on essentials can lead to real savings without the hassle.
The key is to use them for things already on the shopping list, not as an excuse to buy things that wouldn’t have made it into the cart otherwise. The best way to save is controlling spending, not chasing deals.
Used wisely, coupons and cash-back programs are just another way to make the most of every dollar.
Say No to Subscription Overload
Most people don’t realize how much they’re paying in subscriptions until they add them up. Streaming services, gym memberships, monthly box deliveries, it all seems small until it’s eating away at the budget.
Ramsey recommends taking a hard look at which ones are actually used and cutting the rest. Those $10-$20 charges seem harmless, but they add up fast. If the gym membership goes unused, workouts can happen at home.
If five streaming services are on the bill, one or two is probably enough. Eliminating unnecessary subscriptions is one of the easiest ways to free up extra cash without feeling the pinch.
Want to Build Lasting Wealth? Try These 30 Everyday Moves
Drive Your Car Until the Wheels Fall Off
Car payments are one of the biggest money traps out there. Ramsey’s advice? Buy a reliable used car and drive it as long as possible. A paid-off vehicle frees up cash for things that actually matter.
Car dealerships push the idea that a new model every few years is normal, but that’s a marketing trick, not financial wisdom. The real money move is skipping the loan, avoiding the depreciation hit, and keeping a car running for years.
Routine maintenance costs far less than another five years of payments. People who stay out of car debt build wealth faster, it’s that simple.
Avoid Debt Like the Plague
Debt isn’t normal, no matter how much society tries to sell it as a way of life. Ramsey’s stance is firm: No car loans. No credit card balances. No personal loans. No debt.
Interest payments make banks rich while keeping people stuck in a cycle of monthly bills. The only way to break free is refusing to play the game. Paying cash, saving for big purchases, and living within actual means is what builds wealth.
People who stop relying on borrowed money take back control of their paycheck instead of handing it over to lenders every month.
23 Debt Payoff Mistakes That May Keep You Broke (And How to Fix Them)
Downsize Your Home if Necessary
Too much house leads to too much financial stress. Ramsey teaches that housing costs should never eat up more than 25% of take-home pay. If the mortgage payment is keeping other financial goals out of reach, it’s time for a change.
Downsizing isn’t a step backward, it’s a strategic move that frees up money for savings, investments, and a life without financial pressure. A smaller house, lower utility bills, and fewer maintenance costs make it easier to build wealth instead of just paying for square footage.
Bigger isn’t always better.
Dave Ramsey’s 2025 Housing Market Predictions
Get Rid of Expensive Phone Plans
Cell phone bills have ballooned into another unnecessary monthly drain. People pay for unlimited data they don’t need, name-brand carriers that overcharge, and extra features that never get used.
Ramsey teaches cutting out the fluff and switching to lower-cost providers. Plenty of budget-friendly options offer the same coverage for half the price. A simple phone plan that covers actual needs is all that’s necessary.
That extra cash belongs in savings, not in a carrier’s pocket.
🙋♂️If you like what you are reading so far, subscribe to the DadisFIRE newsletter and follow DadisFIRE on YouTube.💪
Embrace DIY for Home Repairs and Maintenance
Paying someone to handle every minor repair gets expensive fast. Ramsey encourages learning basic DIY skills to avoid throwing money away on things that can be fixed with a little effort.
Changing air filters, fixing leaky faucets, and handling minor repairs aren’t complicated, and they save a fortune over time. Online tutorials make it easier than ever to pick up new skills, and a little upfront learning pays off in long-term savings.
Every job that doesn’t require a professional is money that stays in the bank.
The Real Costs of Owning A Home: 25 Expenses That Really Add Up
Find Free or Low-Cost Entertainment
Entertainment doesn’t have to come with a high price tag. Ramsey points out that the best experiences aren’t tied to expensive outings. Parks, community events, game nights, and free activities offer just as much fun without the financial regret.
Too many people waste money on entertainment they don’t even enjoy. Cutting out overpriced outings and replacing them with low-cost or no-cost options means more fun and less stress when the bills come due.
Practice Gratitude and Contentment
Financial peace starts with mindset. Ramsey teaches that focusing on what’s already good in life stops the endless cycle of chasing more. People who are always trying to upgrade, buy the next thing, or keep up with trends never feel satisfied.
Contentment isn’t about settling, it’s about appreciating what actually matters. Less comparison, more gratitude, and smarter spending lead to financial security and a happier life.
Money doesn’t buy happiness, but financial freedom sure does reduce stress.
Frugality That Builds Wealth
Frugal living isn’t about deprivation. It’s about cutting out the junk that keeps you broke so you can put money where it actually matters. Dave Ramsey’s approach isn’t complicated: ditch debt, spend with intention, and stop wasting cash on things that don’t bring real value.
Small choices add up fast, and before long, they start turning into real financial freedom. Living on less now means having more options later, less stress, more savings, and the ability to actually build wealth instead of just getting by.
Make the changes, take back your money, and start living with a plan.
🙋♂️If you like what you just read, subscribe to the DadisFIRE newsletter and follow DadisFIRE on YouTube. 💪 Also be sure to follow DadisFIRE on MSN💰
