Living an environmentally friendly life and living a frugal one are not mutually exclusive. In fact, it's easy to go green while pinching pennies.

Here are 7 ways of going green and saving money while you're at it:

1. Scale Back Your Energy Usage

Cutting back your energy use is one of the easiest ways to go green and save boatloads of money. If you set your thermostat just a few degrees higher during the summer and just a few degrees lower in the winter, you can save on heating and air conditioning without sacrificing too much comfort.

Instead of round incandescent bulbs, use compact fluorescent light bulbs which last for years longer than incandescent bulbs and use less energy. Your energy bill will thank you.

Be vigilant about turning off lights and appliances when you aren't using them. Buy an eco-friendly power strip that eliminates "vampire" electricity use.

Instead of warm or hot water, cold water will suffice most of the time when washing clothes. This can cut the energy costs of your washing machine by up to 85 percent. Consider using a clothesline or drying rack instead of a dryer.

2. Cut Back Your Water Use

The less water you use, the less your water and heating bills will be and the less you will impact the environment and water supplies.

Instead of baths, take showers, and be quick. If you do like longer showers, try a low-flow showerhead which limits the water flow. They are cheap and you'll barely notice the difference.

On your home's many faucets, install a faucet aerator. They change the stream of water coming out of the faucet by dividing the stream, which helps to conserve water. They can also reduce the amount of heat needed to make hot water and can help keep water pressure high.

3. Change the Way You Commute

If you drive to work but could walk or bike, give it a try. You will save on gas, parking, and car payments. It's also healthier as it can improve your cardiovascular health and diminish your chances of becoming obese, which can lead to a wide range of diseases that are expensive to treat.

Ask your boss if you can telecommute to work if you live too far away to bike or walk. If you do live very far away from work, consider moving closer. The savings in the long run could outweigh the costs of moving and of extra rent.

If you must drive, consider trading in your car for a more fuel-efficient car, a hybrid car, or an electric car. These will save you money on gas and will be cleaner for the environment.

4. Changing the Way You Eat

If you are a meat eater, consider cutting some amount of meat from your diet. Pound for pound, meat is more expensive than most other types of food including fruits and vegetables. The environmental impact of meat production is significant and contributes to water, air, and land pollution. Eating excessive meat also increases your risk of cardiovascular disease in the future.

Buy sustainable produce, meat, and eggs that are locally grown or raised. Not only is this cheaper because it eliminates the middleman, local food does not have the same environmental impact as food that has been shipped or trucked into town.

5. Saying No to Bottled Water

Bottled water is more expensive than tap water and most of the time isn't as pure. Instead of buying bottled water, filter your tap water and use reusable aluminum bottles. Water bottles become container waste and contribute to landfills and pollution.

6. Seeking Alternatives to Buying

For some purchases, buying shouldn't be the first thing that comes to your mind.

Instead of buying books and movies, borrow them from a library instead. Books and movies can get expensive, and you get a chance to try before you buy. Also, the plastic used in DVDs and the ink and paper used in new books all have a negative environmental impact.

When in the market for furniture or appliances, consider secondhand or used products for the cheap. Barter on Craigslist or use eBay to bid for a great deal.

When shopping for clothing, try out thrift or consignment stores. They often have better deals on brand-name clothing that could have been worn just a few times. These clothes usually would have ended up in a landfill somewhere.

7. Making Smart Purchases

What products you buy and how you buy them both have an impact on the environment. Going green when making purchases is relatively easy.

Evaluate what kind of goods you buy a lot of and buy them in bulk. When buying food in bulk you'll often save money and cut down on packaging you take home with you. Don't buy anything that is packaged in Styrofoam, which doesn't biodegrade and ends up stuck in landfills.

Since dry cleaning chemicals are toxic, buy clothes that don't need to be dry-cleaned.

Do your research and target products that are long-lasting, durable, and high-quality.

Andy is the co-founder of CreditCardCompare.com.au, one of Australia's top credit card comparison services. He also edits their blog, The Credit Letter.