Why So Many Americans Are Turning to Frugal Living — And How You Can Join Them

Feeling good about your finances can seem tricky these days, but you’re not alone. A recent survey from American Express found that only 13% of Americans feel very good about their money situation. In fact, most people are tightening their belts: 61% are cutting back on non-essential spending, and younger folks especially are embracing frugal habits to stay on top of their budgets. So what’s really going on? More than ever, building strong money skills—and having a plan—can help you feel better about your wallet, no matter what’s happening in the world.

Understanding America’s Shift to Frugality: What’s Driving This Trend?

If you’ve noticed friends talking about canceling streaming services or bringing lunch from home, you’re seeing the frugal living trend in action. According to that American Express survey, most people are making intentional decisions to spend less on non-essentials. What’s interesting is that this shift isn’t just about saving a few dollars—it’s about gaining peace of mind in uncertain times.

It’s normal to feel uneasy about your finances. In fact, a Bankrate survey says that 52% of U.S. adults admit money hurts their mental health—a jump from 42% last year. Inflation, rising prices, and even social media pressure to spend on life’s big moments make it tougher to feel secure.

“More than half of Americans say money negatively affects their mental health, so it’s no surprise frugal living is making a comeback.” — Bankrate Survey

Frugality simply means being careful with your money, not being cheap. It’s about prioritizing what matters most to you and knowing the difference between wants and needs. For instance, you might swap pricey outings for free community activities or enjoy a family game night instead of movie tickets. Millennials and Gen Z, in particular, are often leading the way—choosing value over flash and seeking experiences that don’t break the bank.

This mindset shift comes at a time when celebrating big life milestones can add a lot of financial stress. An Achieve survey found that 74% of Americans feel events like weddings or graduations can impact their bank accounts for months after. One solution many are turning to: simple, budget-friendly celebrations or pooling resources together with friends and family to keep costs down.

Next steps: Try tracking your spending for two weeks. Look for easy areas to cut back—like takeout or online impulse buys—and see how much you can save just by making small swaps. The goal isn’t to cut all the fun out of your life, but to spend on what truly matters to you.

Building a Financial Plan That Gives You Confidence

With only 13% feeling very good about their finances, it’s clear that uncertainty is common. But there’s good news! Having a plan—no matter your income—can make a real difference. Think of a financial plan like a map. Without one, it’s easy to get lost, but even a simple route points you in the right direction.

Research backs this up: A study by the CFP Board found that people who work with CERTIFIED FINANCIAL PLANNER® professionals are much more likely to have detailed financial plans and feel comfortable with their money. But you don’t need a pro to get started. Setting up a basic monthly budget and tracking your biggest expenses goes a long way.

“Clients of CERTIFIED FINANCIAL PLANNER® professionals are more likely to report living comfortably compared to those who don’t have a financial advisor.” — CFP Board

Start simple: Write down your income, your bills, and your savings goals. Do you have an emergency fund (money set aside for unexpected expenses)? Even $25 or $50 a month can build up over time and help you handle surprises like car repairs or a medical bill. The more specific you are with your budget, the more in control you’ll feel.

Many Americans are also rethinking what brings them happiness. For example, a KeyBank survey shows 66% of people would rather have a job they love—even if it pays less—than a higher-salary job they dislike. This reminds us: Feeling good about your finances is about more than just numbers. It’s about matching your money choices to your values—a process called values-based spending.

Next steps: Use a free budgeting app or pen and paper to break down your monthly spending. Set one small goal this month, like adding $25 to savings or cooking at home twice a week. Celebrate your progress—small wins can have a big impact!

Everyday Money Decisions: Navigating Credit, Savings, and the Hazards of Plastic

Frugal living isn’t just about cutting back. It’s also about understanding where your money is going—and how certain tools can help or hurt. Take credit cards, for instance. While they offer convenience, a recent Affirm survey showed that 73% of Americans say credit cards actually make it harder to manage their finances. Why? It’s easy to lose track of spending or carry balances that spiral into debt.

“Most Americans find credit cards make it challenging to manage their finances.” — Affirm Survey

Many frugal households use simple strategies to keep credit card use in check: paying off the balance in full every month, setting low spending limits, or even using cash for daily purchases. These habits help avoid costly interest charges and keep your budget on track.

Savings is another key piece of the puzzle. Even if you can’t save big chunks at once, consistency matters. Setting up an automatic transfer—say, $10 a week—from your checking to your savings account is an easy win. Think of it like planting seeds: Small amounts grow over time, especially with interest.

Life’s big celebrations, like weddings or graduations, can also stretch finances thin. You don’t have to skip them—just plan ahead. For example, hosting a potluck party or splitting costs with friends makes special moments more affordable. And for everyday needs, using a shopping list and comparing prices before you buy can keep impulse purchases in check.

Don’t forget: Financial health is for everyone—not just people with lots of money. Whether you’re starting from scratch or already saving, the best habit is checking in on your money regularly and making intentional choices.

Next steps: Review your latest bank and credit card statements. Look for recurring charges you might have forgotten about, like subscriptions or memberships you no longer use. Canceling even one or two can free up money for your goals. Try setting a weekly spending limit for non-essentials and see how it feels—many find the sense of control boosts confidence almost right away.