Frugality is the concept of being prudent or thrifty when it comes to the consumption of consumable resources, inclusive of money. People who are frugal are conscious of lavish spending habits, choosing long-term stability and sustainability over waste and excessiveness.
Some of the most well-known millionaires and billionaires are known for their conscientious money habits, and it stands to reason that we could learn a thing or two from them!
Retaining the concept of “Lifestyle Creep.” Mark Zuckerberg could own multiple cars for every day of the year, yet he drives a reliable Volkswagen, considering the amount of money Mark Zuckerberg possesses this is an interesting juxtaposition to many people within his tax bracket. Unbeknownst to many people, Warren Buffet, the richest man on the planet, still resides in the five bedrooms, stucco house he purchased in Omaha many years ago.
Having multiple income streams
It is incredibly smart as it allows them to bring in more money, but it also provides a safety net as one source of income may not last forever. Having more than one income stream lessens the risk of financial instability.
You may be surprised to learn this, but even millionaires and billionaires have budgets! They observe their cash flow and know exactly where their money is going. It also gives them the opportunity to evaluate any spending habits that need to be changed.
The majority of self-made millionaires and billionaires start by saving money early in their work lives. Creating savings habits early on sets a positive foundation for the future, and in time you can prudently invest those savings. It allows your funds to grow over time.
Aother habit of the rich is to abstain from the desire to spend their money today and tuck it away into savings investments that grow in value and provide financial resources that can be used in the future to maintain their standard of living.
Self-made millionaires surround themselves with like-minded individuals. If you want to adopt and continue good money habits, you need to associate with individuals who possess these habits. If all of the close associations you make in life share your desire to live below your financial means, it is highly likely their good money habits will become your good money habits. And if you already possess these habits, then it will be that much easier to maintain them.
It is important to remind yourself where you came from. Some of the worlds most well-known tycoons maintain this habit as a regular part of their daily routine. This consists of eating with their employees in the office cafeteria, wearing $10 wristwatches, cutting their hair or packing brown bag lunches. Yes, millionaires and billionaires find creative ways to keep expenses low.
Valuing the knowledge of experts
Just because someone is rich doesn’t mean they are an expert on all things financial. Knowing when to seek help from accountants, lawyers and more can help wealthy people take advantage of confusing laws and financial fields where they aren’t entirely sure of. This can prevent wasteful spending, bad investments, and unnecessary legal issues. This helps them save both time and money!
Paying themselves first
Paying yourself first is when you put money into savings as soon as you get paid. In doing this, it allows you to save more money and cut back on frivolous spending. In such a way it helps you prepare for the future.
Coupon clipping and haggling
Many people don’t realize this but wealthy people still coupon clip and haggle, if there is a bargain to be had they will find it! According to AOL’s article “Guess Who Clips the Most Coupons?“, households with average incomes of $100,000 or more clip significantly more coupons than those who bring in less than $35,000. Don’t be shy, break out those coupon books and weekly circulars.
So, in the end, while it stands to reason there are many people in the world born into wealth, there are just as many people who’ve made their wealth from hard work and smart financial habits. Educate yourself and surround yourself with like-minded people, with any luck you will develop the financial savvy of the rich and famous!