They buy a modest House
Starting with No.11 of frugal habits of MILLIONAIRES is Buying a modest house.
Warren Buffett is living in the same house that he had back in 1958 for $31,500.
Even if he has billions in his bank accounts, he didn’t think of moving to a new and bigger home.
The rich can buy the most expensive mansions, but they don’t because they recognize that housing costs constitute the biggest percentage of one’s budget.
In the US, the bulk of a household’s budget is placed on housing, whether on mortgage or rent.
There is no doubt that buying a home is a huge investment that one must carefully look into.
For example, a smaller household doesn’t necessarily have to buy a bigger home, although it’s a good strategy if they’re thinking of selling their home in the future.
Don’t settle for buying a larger house than you would actually need for the number of people in your household; otherwise, too large a home will suck up a huge part of one’s monthly budget.
They don’t waste food
No.10 They don’t waste food. One of Google’s early private investors, David Cherian, with a net worth of $6 billion, has a shocking Frugal habit: saving half of his meal for the next day when having dinner at a restaurant.
He definitely knows how to make a good meal last. Instead of leaving leftover food at the table, he saves half of the meal for consumption the next day. “We rarely do this,” the Stanford professor says.
Many of his Frugal habits are from his parents, who passed along the good habits. His parents grew up during the Depression period, so he definitely knows how to live a Frugal life too.
Other habits that might surprise you include cutting his hair for over 20 years and not buying expensive cars, but instead, a 1986 Volkswagen wagon.
He’s been pinching pennies his entire life, and it has done him a lot of good things, including financial literacy and excellent money management skills.
So if you want to apply frugality in your life, don’t think twice about copying the rich’s simple habits, including not wasting food.
They make their meals while traveling
No.9 They make their meals while traveling. This Frugal habit of the rich makes them richer. Instead of buying expensive meals or eating out at hotels and restaurants while traveling, they prepare their meals.
In this way, they not only save money but also control what goes into the food they’re eating. As a result, they can eat healthier while also enjoying their sumptuous meals in their hotel room.
For instance, Danica Patrick, a race car driver who has an estimated net worth of City million dollars, says that she loves cooking and stopping by local markets while on the road. She cooks her food and appreciates doing so because, according to her, it’s healthier than always having to eat out at restaurants.
So if you want to save more dollars, you should start making your meals either while traveling or not. You can make it a habit to prepare food at home rather than eating out at restaurants when working.
They look for deals
No.8 They look for deals. The rich won’t be where they are in their lives if they don’t know how to be wise with money.
The rich can buy anything that their hearts desire. They don’t give in to the temptation of buying items at full price if they can get them at a lower price.
Many of the rich people do not go for expensive items, especially if they have to pay full price. They don’t hesitate to look for deals that can save them a couple of dollars. That is why they exert effort in finding deals and coupons.
Regardless of their income, they never splurge on expensive stuff, especially those that will not give them long-term value.
They instead ensure that every dollar will count. They look for coupons and deals when they want to buy something.
A few known examples of this habit of the rich include Lady Gaga and Hillary Swank.
They carry only the cash they need
No.7 They carry only the cash they need. One of the surest ways to overspend is using credit cards when shopping or out. It is also one of the primary reasons that people dig themselves into debt.
It’s not the way to go for the rich because they’re financially literate and understand how easy it is to overspend with credit cards, which can be easily swiped to pay for whatever they want.
They also recognize that paying off credit card debt can take a long time, especially if they pay only the minimum. That’s why they only carry cash with them whenever they go shopping or buy their supplies at the grocery store.
One example is T. Boone Pickens, whose net worth is $1.4 billion. He brings only the amount of money that he’d use to pay for the items he has planned to buy.
Even with that big net worth and capacity to buy the most expensive items, he doesn’t. He instead brings with him a grocery list with the items he plans to buy. In short, all the purchases he makes are planned.
Even if he also makes occasional unnecessary purchases from time to time, generally, he brings cash to the store to avoid impulse buying and to restrict himself from having more cash in his hand to buy unplanned items.
They don’t buy something just
because they can’t afford it
No.6 They don’t buy something just because they can afford it. With an estimated net worth of $250 million, Mitt Romney, who co-founded Bain Capital, buys his golf clubs at Kmart. It is one of his budget-conscious habits that might surprise and shock you.
Why would someone with this net worth buy budget items? Romney is always looking for blue light specials; it is one of his sayings. Just because you can afford something doesn’t mean you should buy it. That can inspire a lot of us when it comes to handling our finances.
Even if they have the money to buy the most expensive items they can buy, they don’t have that habit. Instead, they still value frugality in their lives, and this is what makes them richer.
They pay themselves
first
No.5 They pay themselves first. One of the Frugal habits of the rich is paying themselves first because they know how this will give them long-term value. They also recognize that doing so will improve their quality of life, whether in the form of investment or education.
The rich take action on the things that will upgrade their lives.
For example, they prioritize making investments but make sure that they study about it before entering a deal. They also don’t pay for entertainment and then sit on the couch the entire day; they instead value improving their skills too because they know that it can give them more earning potential in the future.
They also don’t spend on unnecessary stuff unless they have achieved their financial goals.
Nevertheless, the rich pay for themselves first—their future selves.
They shop at Target
No.4 They shop at Target. Michelle Obama, with a net worth of $40 million, shops at Target. She’s known for her thrifty life choices.
Even if she has the money to buy expensive items, while first lady, she’s spotted shopping at a Target store to buy dog food and toys for Bo, their pet dog. She also applies her frugality to fashion.
Even if she has access to luxury fashion designers, she chooses to buy and wear clothes from thrift stores.
Nevertheless, it is not bad to find bargain clothes at a discount store.
After all, it’s not the price tag that should matter but how well you carry yourself, even if you’re wearing a dress at $35.
They buy at discount sites
No.3 They buy at discount sites. With an estimated net worth of $25 million, Bethany Frankel bargain hunts and buys discounted items.
Even if she has the money to buy luxury items, designer brands, she looks for bargains when it comes to buying clothes. She’s not hesitant to buy items on sale and to avoid impulse buys.
Bethany Frankel shops regularly online at discount sites like eBay. It is one of the frugality secrets of the wealthy. They know how to prioritize their spending and do not buy anything just because they can afford it.
And whenever there is an opportunity to buy items on sale and discounted prices, they don’t think twice.
They know how
to keep their spending in check
No.2 They know how to keep their spending in check.
Anthony Anderson, whose estimated net worth is $25 million, does not overspend when making large purchases.
It is surprising but true; the rich know how to make every dollar count.
He keeps his spending in check and says that he’s not into buying the latest cars nor the largest house on the block.
Anderson says that his parents always emphasized planning for the future and believes that life is not only about the present but also the future, maybe 30 years from now.
He has a great point in this; he plans for his financial future so that he will have money coming in later in his life.
They know how to save cost on
utilities
No.1 They know how to save costs on utilities. A member of the British royal family, with an estimated net worth of $600 million, Queen Elizabeth II uses a space heater at the palace.
The palace has 775 rooms, a lot of rooms that should be kept warm in the cold months.
However, it is impractical to heat all these rooms when not in use, or they would have to pay astronomical bills.
So instead of turning up the thermostat, she only turns on a space heater and stays inside a room with a fireplace. Her space heater isn’t expensive or extravagant either; a similar version of it only costs 30 British pounds at stores in London. This frugal habit is very practical because it will allow you not only to save money on utility bills but also help reduce global warming and other associated negative environmental effects of wasting energy.
If you’re caught unprepared for a recession, you’re more likely than not to struggle financially. That is why it matters to prepare yourself for it, and even if it doesn’t come, still, you should plan for your finances to avoid getting into debt or always running short of funds.