The more money you have, the more you tend to spend. Yet, many of the wealthy individuals I have observed are surprisingly frugal. Being frugal is probably one of the reasons they have accumulated significant wealth over time.
It’s even surprising that these wealthy people practice such frugal habits that ordinary people don’t. They drive used cars, they have homes which are just right for their family sizes. You often see them bargain shopping and not living an extravagant life. Rather the rich accumulate money and wealth for a cause. It’s the delayed gratification that made them accumulate wealth in the first place.
7 Surprisingly Frugal Habits of Wealthy People
1. They use coupons
You might think this is a habit of those who have low incomes, but over 50% of coupons are used by households that have an annual income greater than $125,000. This is because the wealthiest people in the world take the time to ensure their money goes further, and ‘coupon-ing’ is an excellent way to do this. If you’re buying amenities that you know you’ll always need, coupons are the best way to bulk buy items too (if you have the storage space).
2. They up-cycle items to extend their life
Sometimes, items such as clothing and furniture can become a little worn and you’d naturally think about throwing them away. Why not think about how they can be up-cycled and reused in different ways? Celebrities such as Taylor Swift, Kourtney Kardashian and Kate Middleton are fans of up-cycling.
It’s because they understand that with just a few handy sewing tips you can turn those jeans with holes in fashionable ripped jeans or shorts. The possibilities are endless, especially if you take the time to up-cycle items rather than spend money on replacing them.
3. They ask themselves if the item is worth their hard-earned money before spending
This might sound obvious, but the retail industry knows how to persuade customers to spend their hard-earned cash on all kinds of marketing and promotions. The wealthiest people in the world live within their means, and always choose the highest quality goods for their money.
4. They have an eBay account
Do you have lots of clothing/appliances/electronics in your house that is unused? The wealthy love to donate to charity, whether it’s through donating items or money. Set up an account on eBay and have a clear out of items you have not used or worn in the past six months.
eBay has the option to donate all of your proceeds to charity, and it’s a quick and easy way to free up space at home. If you don’t want to set up auctions for all of your items, why not take them to your local charity shop? Not only will you be adopting a habit of the wealthy, you’ll be doing a good deed for an incredible cause of your choice.
5. They avoid buying on credit
This habit is more preventative, as it will rule out the possibility of ever falling into debt. This might be something that’s an easier habit for the wealthy, but they always avoid spending money on credit, whether it be store cards, credit cards or loans. This is because it’s much easier to spend more than your means, and it’s therefore much easier to get in debt. If you’re already buying on credit, try and hold back from now on to live frugally.
6. They have discipline
The wealthiest people in the world have an abundance of discipline – that’s how they became so wealthy. Sometimes when it comes to money, the hardest part about being frugal is being disciplined and denying yourself something to save the money instead for meeting future needs.
Discipline can also be applied to your line of work – if you work hard, train, and get better at what you do, then the monetary rewards are almost guaranteed. Make a habit of asking yourself whether you really need that designer watch, suit, or shoes.
Make a habit of working your ways towards a fatter paycheck. Be it by negotiating your salary increment with your boss or negotiating for a better pay when you switch your job.
7. They don’t carry lots of cash
This next habit goes well with the one above, as you might find that carrying lots of cash in your wallet leads to more spending. If you don’t have the discipline to stop spending, you might find that limiting the cash in your wallet will help you live a frugal lifestyle.
About the Author: Janet Miller is a serial entrepreneur, reformed workaholic,and co-founder of Jen Reviews. She writes about habits and entrepreneurship and has been featured on Fast Company, The Muse, The Huffington Post and MindBodyGreen.
Xyz from Financial Path. says
I get “7. They don’t carry lots of cash”. I too try to always use credit cards to better track my spending and for the rewards. As long as you always pay in full each month, I think that’s the best way to go.
I do the same. In case, I forget to pay my bill, so I do have auto pay set up on all my credit card accounts. As you mentioned paying with credit card helps in tracking all the expenses.
Discipline yes this is such a key! http://www.patientwealth.com/motivation-to-stay-disciplined/
There are so many things in life that rest on being disciplined including staying out of debt and getting financial freedom. Hey – I have an eBay account too! But I’m not yet “wealthy.” My wife and I do find it very rewarding to give to charity and we get the side benefit of keeping a less cluttered house while knowing we helped someone. It’s also a tax deduction.
I don’t understand not buying on credit and also not carrying cash. We are on a cash-budget and hid our credit card. So we either use cash or use the card that takes money right out of our bank account. It’s a good way to instill discipline.