This post may contain affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

I don’t know about you, but I want to have a fulfilling life and spend time doing things that I love- without the money worries. I don’t want to worry about whether or not my family can pay the bills each month, and I don’t want to go into debt using credit cards to make ends meet.

However, my family has a finite amount of money to work with each month to make this a reality.

Frugal Finance 101 - Rules of Thumb You Need To Follow

And that brings me to the first rule of thumb.

Frugal Rule of Thumb #1: Financial freedom is defined as living within your means.

Who has two thumbs and defines financial freedom that way? This gal! Ew, what a way to start this out, right? Doesn’t “living within your means” mean saying no to what you really want and basically saying no to happiness? And who wants to take the time to track finances and pay bills and say no to buying things we want?

Well, I’m here to tell you that living within your means can be fun! It is wonderful to be living comfortably with the money that we have. Enough to eat and drink, enough for housing and clothing, enough to pay the bills, and of course, enough for those extras that aren’t necessities.

Seriously, think about it. If the goal is to have everything you need without worrying about how you’re going to pay for it (and I assume you’re not a trust fund kid), then it’s all about your cash flow. There is money coming in and money going out each month, and it’s as simple as making sure you spend less than you make. Living within your means will make you financially free.

There’s a couple of ways to accomplish this–you could work more so you can spend more, or you could spend less so you can work less. I prefer the second option. I get a lot of enjoyment in trying to stretch a dollar as far as I can.

If that sounds good to you, read on.

Frugal Rule of Thumb #2: Living within your means requires an attitude of gratitude.

You have to have the right mindset if you want to have control over your money instead of it controlling you. Be grateful for what you currently have. This grateful mindset shift will naturally bring us more happiness as well.

But how do you have an attitude of gratitude when we’re living in a material world? Ads and commercials bombard us wherever we go in the hopes that we’ll be reeled in by the gimmicks and bite. They are designed to make us want the products and services they are advertising, and make us think we won’t be happy until we have it.

So how do we decide what we should buy?

From my experience, it is a matter of focusing on the things that truly make us happy, being frugal about what we really need, and getting creative to make things affordable.

Ask yourself these questions before you buy anything: Do I really need this? Do I own something similar to this already? Do I need this right now or can it wait? Could I get a better deal? Have I researched this and still feel confident that it is a good product? Do I have a place to put it? Could I die without this?

Then wait a day, and ask yourself these questions again. If you still feel you need it, buy with confidence.

There is one big exception to this: If you could die without it, spend the money, for goodness’ sake! Don’t wait!

Frugal Rule of Thumb #3: Financial freedom is a journey- not a destination.

I keep saying my family “reached” financial freedom, but that’s a bit of a misnomer because it’s really a continuous journey rather than a destination. Let me explain.

Financial freedom is the act of living within your means, day in and day out, month after month, year after year. We continue to buy necessities and wants, so we never stop watching our finances– no matter how well off we are. Ignoring your finances is the quickest way to financial ruin.

For example, when you make the goal to become physically fit, you add exercise into your routine and you start to get stronger. Once you’re in good health, if you say, “I made it! Now I can stop exercising!” then you’ll lose all the progress you’ve made and have to start over. Financial freedom is a lot like that.

So, how do you become financially fit? That brings me to the fourth and final frugal rule of thumb- the budget.

Frugal Rule of Thumb #4: Financial Freedom requires a budget.

I spent most of my life living without a budget, and now I don’t know how I survived without one! Just having a plan and knowing where our money is going has given me power over that money and the ability to make it work for me.

Now, if you’re in the right mindset and you’re ready to start your journey to living within your means, go read my post about the first and most important step in reaching financial freedom, the foundation of it all, creating a budget:

Frugal Finance 101: You Need a Budget