For me, living frugally is about allowing me to do things the way I want when I want, not necessarily frugality for the sake of frugality or being cheap. Here are my 4 general principles:
Does it save money?
This might seem obvious, but some people really miss the mark. Getting the cheapest bed/furniture/etc. will actually cost you in the long term in replacement costs, whereas researching and purchasing the best quality for cost will save you from having to buy those items again. This also applies to making food, not everything is cheaper homemade (most things are), sometimes there is no way that you can equal the cost saving power of mass producing something. My best example is gardening, gardening can save you a lot of money in fresh food costs; however, for most people gardening involves buying seeds, soil, fertilizers, pesticides, etc. By the time the food is ready to eat it costs more than buying it at the store. If you avoid the get-all-the-gadgets trap though it can be a rewarding, stress relieving, and money saving hobby.
Does it save time?
Surprisingly, because of our family's dietary restrictions, cooking our own meals and preparing homemade frozen dinners saves me time compared to spending hours reading labels in the grocery store. 1 day of cooking leads to several weeks or even months of food that's ready to go. Plus if I don't have time or don't want to go shopping one week, there are plenty of healthy meals available without heading to a restaurant.
On a different note I will happily pay for the convenience of an automatic shower sprayer over having to scrub the tub weekly. This saves me time and despite the cost difference between doing it myself, I feel it is a better choice to invest my time elsewhere.
Is it healthier?
Sometimes cost and time aren't the only considerations. Being able to make healthier choices often coincides with more frugal options in my mind. Healthier options mean a healthier family, which probably evens out in the end. This means paying slightly more for healthier food alternatives is a frugal choice in my book over just getting the cheapest things, it could also mean a gym membership is right for someone else, despite the recurring costs.
Do we actually need it?
Probably the best money saving strategy is to seriously consider whether we actually need something. This often means waiting to buy, and thinking about whether we need the item/service or if it is something we feel we should need because everyone else seems to need it. This includes things like a stand mixer, which would be helpful given the amount of cooking and baking I do, but in reality I can make bread and other things just as quickly without the mixer and then it isn't taking up room in our kitchen.
Does it improve our quality of life?
This is a catch all category and includes things like making the shelving units for our home (because I enjoy the challenge and can do it for cheaper and a better quality) through choosing to use a car instead of the bus, but sticking to a single car. It also means that living on less so that working less is a possibility is a very important part of our family strategy.