5 Ways to Live Frugally as a Bootstrapped Founder (2022)

I'm guilty as charged. Like many bootstrapped founders and indie hackers, I've been living frugally like a poor person for years now. It comes naturally to me. I didn't even need to research anything on this topic. Because I'm a natural.

Before I share my tactics about how to cut down costs in your personal and professional lives, let’s talk about how it’s seen as a “bad” thing by our peers to save money and buy things that may not be expensive. I’ve noticed that a lot of times people will look down on you because you want to opt for a cheaper alternative to doing something mainstream.

I personally try not to carry a Dollarama bag when I shop there, because I'm worried of what others might think of me. I live in a posh part of the city so I guess that makes sense. But letting random strangers determine how much money I should save or spend is pretty meaningless — they don’t pay my bills, I don’t live off their income, so why should I care?

And so as you read through this article, I really hope that I'm able to help you refine your thinking so that you focus more on your personal habits, income and costs, and worry less about what others might say about you “pulling back” or “downsizing” or whatever. Oh btw, you should follow me on Twitter eh? I’m the founder of Sparrow and my job is to make founders rich by helping them make their startup dreams come true! Anyway, on to the article.

Budgeting Basics

This is quite simple. The idea is to look into your weekly and monthly costs and find ways to remove, reduce or find alternatives to costs that you can easily avoid (i.e., things that are not a must-have.) Here are the usual suspects:

1. Rent: Do you really need to live in an expensive part of your city? Do you really need a one-bedroom and one-bathroom apartment for yourself, or are you comfortable living in a bachelors pad with access to the same amenities in your building?
   
   For most of us, rent is the highest monthly cost in our balance sheet and yet many of us are hesitant about changing this because we are just so used to living and being a certain way for decades.
   
   The idea here is to thoroughly check if you’re comfortable downsizing your current living condition to either live in a bachelor unit, or perhaps living with roommates, so you can pay less per month. This was a hard one for myself personally because I couldn’t enjoy living with other people at all. But that also meant my monthly rent went up 3x … but having the mental peace of being alone and working my own hours allowed me to become 2x more productive. So in the long run, it paid off for me — but your story might be different!
   
   Before moving in with roommates or friends, be very cognizant of their raw personality by getting a feel for these questions. You might get wrong answers if you ask these point blank, so get creative:
   
   (a) Bad habits: Do they smoke, drink and/or have sex a lot in the house? When they’re by themselves, do they care about their roommates’ preferences? I know. Weird question to start.
   
   (b) Cleanliness: When no one’s supposed to come over, are their bathrooms and kitchens clean? Do they have the habit of leaving dirty plates and unwashed utensils for days around the house? Do they take out the garbage or let it wait till it gets unbearable?
   
   (c) Wake up time & working hours: When do they really wake up on work days? Do they work from home and need their space? How often do they have late night outs with friends? Do they bring home people late at night? Are they a night owl or early bird? Critical questions.
   
   (d) Motivation: Do they want to live with you because they want you to pay rent? Or because they like your presence and are lonely? This is important to understand because both of you are equally responsible to make this living experience great for each other. So getting this clarified will help you have a smoother living experience.

   Btw, unless it’s something personal, is there a reason you’re not following me on Twitter? I also have a cool newsletter.. if you’re that kinda person.
   

2. Food: There’s two parts to this actually.
   
   (a) Reducing eating outside: Just like many people, I am also guilty of eating outside when I don't need to — I don’t have to cook, it feels fun, the food tastes amazing, etc. But when I looked back at my spending habits, I realize that I was spending over $100 a month eating things that barely added value to my body like McDonald’s, A&W, etc.
   
   I'm not asking that you completely eradicate eating outside from your schedule, but it helps to only eat outside once every two weeks or maybe every week, you only eat one meal that's under $20 for yourself, with a friend! It might sound silly now but over time you save hundreds of dollars which you can then either invest into an index fund (sorry i’m that guy) or maybe just put towards some thing a bit more valuable — like taking your parents out for a nice dinner! See? It pays offff.
   
   (b) Cooking sustainable meals at home: I wrote a food hacks article on Medium and Sparrow the other week. It might help you but I want to add more value for you on this page.
   
   There are plenty of fun and tasty meals that you can cook by yourself at home under 30 minutes that can keep you fed for a bit, and also add good nutrients to your body. Here’s a list that might help. Do not overthink it please. Oh, and you might need to turn off Adblocker for this page to work.
   
   There's also whole foods that you can buy from grocery stores like bananas, apples, etc. which you can supplement with homemade sandwiches and other fast-to-prepare meals. These cost you a fraction of what an outdoors lunch would cost you. Over time, these $3, $5, $8 save ups will accumulate to $100 and more, which you can then put towards growth experiments for your startup! Sorry, nerd moment. Anyway.
   

3. Monthly subscriptions: Yep. I’m coming for your Spotify addiction. I think I read a report somewhere that said that the average American spends over $70 in monthly subscriptions to different kinds of services including YouTube, Netflix, Spotify etc. Oop, just checked. It’s from “The Forever Transaction” and it’s $237USD a freaking month for video, news, software and meal kits according to the July 2018 report from West Monroe Partners. Insane.
   
   I think I’ve established that I'm frugal and I'm not ashamed of it, and so I'll be the first to tell you to go ahead and kill off any subscriptions that don't add genuine value to your life. I mean dude, you can’t wait 5 seconds to watch a YouTube video? What are you, Donald Trump? And you realllly need to listen to your Spotify music without ads eh? Are you a DJ? Oh and you need to pay $$ a month for Netflix? Have you considered just buying an account with 2 of your friends and sharing the costs with them? 4 friends can just pay 3 months each during a year. Same with Spotify — some of my friends just trick them into thinking it’s a family account. So each of the “family members” pay $3 a month or something. Can’t vouch for this one, but I can for the Netflix sharing.
   
   Kill off monthly subs you wouldn’t die without.
   Opt for group/family arrangements when you have the chance.
   This applies to your personal and indie hacker life as well. If there’s a SaaS you subbed to but don’t see a genuine need for your startup life, just unsubscribe from it man. Please. Do it for me ❤
   

4. Avoiding peer pressure: Didn’t expect this, did you? A lot of times our friends and family members indirectly force us into buying and doing things and maybe outside our budget range. I've been in that spot where I worry about what others might think if I don't spend the amount of money that they think I should. However, this is not a good long-term strategy. Obviously.
   
   No real trick or hack here to suggest, but the idea is to be very confident and purposeful in your intention of spending just the amount of money that you want to spend. If you are determined to stay under a specific limit for your monthly transactions, there's no real way others could force you to change that preference. It’s your life. Your goals. Who the fuck cares what David and his gang thinks about you ordering water instead of overpriced whiskey at the bar? Own it.
   

5. Traveling costs: I had originally moved into my current apartment to be close to my workplace. Every month, I started saving $200 because I did not have to travel three hours a day through our public transit here to get to work. But this doesn't just stop at commuting, eh?
   
   This also includes travelling to your friends’ places, the grocery store, etc. Try to ask yourself if you really need to use that Uber ride to go somewhere that would only take 30 minutes via public transit and cost you only 30% of that Uber ride. Sure, you only save $10 at a time but it all adds up. Trust me. And it may even apply to long-range travel. For example using the train instead of a plane ride to your destination. Of course, you will have to ask yourself if saving 5 hours via plane actually means a lot more to your life than paying $300 less for that trip when taking the train. Don’t let me determine that for you, but this is just something for you to consider.

Bonus round

I lied. I have more ways to steal happiness away from your life. But I’ll make it up to you through really nice tweets.

1. Thrifting: So I’m not a big of this at all. And I mean, not at all! But — you don't always need that brand new piece of furniture from IKEA when moving to your new home. Sometimes it pays off in the long run to buy used products which basically give you the same amount of utility a brand new piece of furniture would.
   
   And as you probably know from my way of writing so far, it doesn't just have to stop at furniture! I am a little less keen on thrifting clothes because I love wearing fresh new clothes that I like to buy for myself. However, you should think of creative ways to buy used material, resources, and things that others want to part with. Not everything people want to give away is because they’re rotten, old or useless. Sometimes, people just stop needing things and give them away at a fraction of a price. Kijiji, Criagslist, etc. are great resources. Oh, and maybe yard sales but god I hate Gary.
   

2. Making sound financial investments: This is not a financial advisor because I am not a financial advisor. You cannot just get richer by saving money. You need to invest your money into sure ways that bring you 8–10% a year in returns, so you can fight inflation and not let your money lose value. There’s 2 things I recommend here:
   
   (a) Have enough saved up: My dad always recommended me have enough money saved up for six months of rent and food. A “Rainy Day” fund. For me that equates to around $12,000. I'm personally not a fan of keeping more than $5,000 in cash in my bank account because I keep feeling that the money could be worth a lot more if invested into proper places.
   
   (b) Invest into sure shots: If I were to summarize what I've learned about financial investments in the last five years, it's to invest into the S&P 500 index fund. Every good bank will have a fund that mirrors the S&P 500 fund, which you can talk to your bank’s financial advisor about.
   
   Alternatively, you can just buy Vanguard’s VOO. You can learn more here. I recommend not trying to pick winning stocks to invest in, or day trading because it generally takes a lot of years to be good at this skillset and even then, you are very likely to underperform the S&P 500.
   
   If you have investments in place that you don’t completely understand, perhaps look into how they’ve been performing over the last 2–3 years and re-consider if you should move them. Again, this is heavily dependent on how you think about money and my perspective might not be useful here — exercise caution! :)

And that’s a wrap!
What’s your honest opinion what I mentioned above? Do some of these measures seem a bit too over-the-top? I certainly am not a fan of thrifting for instance. Or, is there something I missed? Please tell me!

I genuinely hope I was able to help you see things differently when it comes to saving and spending money! It’s always better to position your thinking about the long-term when it comes to money. Short-term, stupid temptations almost always end up in disaster. Who cares about your 20 seconds of happiness now. Worry more about how you’ll feel in 20 months. Invest for your long-term health and happiness. Nothing is more important! :)

And btw, if you know an indie startup founder (bootstrapped especially) who needs help building or growing their startup, I’d be very glad to help! I’ve struggled making my platform myself and I knew there are other indie hackers who needed help — which is why I built Sparrow, where vetted startup advisors help you grow your company! Because they already did what you’re looking for help on!

I really care about helping founders get rich following their dreams and this is how I’ll do it. Thanks for reading. Let’s get happy together!!