THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE READ MY DISCLOSURE FOR MORE INFO.
Last week, Becky yelled at me when I criticized her terrible financial habits. We were having our customary weekend dinner at a small restaurant near my home. As usual, Becky ordered the most expensive dishes, and paid her share of the bill with credit cards. When I politely asked about her plan to buy a home, she exclaimed – “How can I buy a home now Patricia? I don’t have any savings.”
I knew Becky would give me this answer and this was exactly the reason why I asked that question. She prefers to whip credit cards and borrow short-term loans instead of saving money for reaching her financial goals. Frustrated with her current financial habits, I rebuked her for around 30 minutes. But Becky’s mind was somewhere else. She kept looking at the rich people entering into a luxury restaurant just opposite to our restaurant. Once she was satisfied, Becky said – “Look at them. They live like a king. They splurge and waste money. Nobody tells them anything.”
Becky echoed the sentiment of an average middle-class American. But this school of thought is completely wrong since preservation of wealth is important to stay rich. Even a millionaire needs to save money. If he doesn’t, then he would lose everything within a few months.
Rich people can’t control the stock market or loan interest rates. But they can control their lifestyle to maintain prosperity. It’s a wrong notion that rich people don’t save money. If you mix with rich people, you’ll be surprised to know about the frugal ways they use to pinch pennies. Here are some of them.
- Wealthy people make thoughtful purchases: The biggest fear of the rich people is becoming poor. This fear is more prevalent amongst people who have moved from rags to riches. When it comes to shopping, they take the time to purchase anything. Unlike middle-class Americans, they don’t follow trends. I feel that delayed response helps rich people to avoid impulse purchases and save money.
- They shop with cash: Financially affluent people avoid debt as much as possible. They are ready to take risks in case of business ventures. But when it comes to shopping, they prefer to buy in cash. What if they don’t have cash at the time of purchasing a product? They’re likely to pass it on. They would rather wait. Rich people try to ensure that they have sufficient money, and make conscious efforts to manage them properly.
Don’t forget that you can boost your savings regardless of how much you earn by living below your means. Even if your income is low, you can increase your savings by managing money wisely. My dad didn’t have a huge income, but he managed to buy properties by saving money every month.
- They wear budget-friendly dresses: Don’t be shocked. I’m not saying that all the celebrities wear budget-friendly dresses. But there are a few Hollywood actresses who skip pricey designer dresses and wear budget-friendly apparel in special events like Oscar.
- They buy quality products: Millionaires are millionaires because they are wise people. They make smart decisions and choose quality over prestige when buying pricey items. They check the quality of a product minutely. If it meets their quality standard, they buy it. They won’t buy a product whose price is as high as their income. For instance, they would prefer to buy a Mercedes instead of Maserati.
One of the reasons why wealthy people are able to hand down valuable artifacts, furniture, jewelry, etc. from generation to generation is because they buy quality products. The biggest benefit of buying quality products is that they allow rich people to preserve wealth.
If you’re planning to buy an essential thing, then my suggestion is to buy quality. Maintain it properly. You can use the product for several years. I’m not a rich woman. Still, when I buy important items like electronic goods, I focus on quality and spend more since they last longer. Think rationally. Who will buy pricey items again and again?
- They spend less than what they earn: Jay Leno shared a secret after his retirement. He was paid $15 million for hosting the Tonight show. He never touched that money. Rather, he covered his expenses with the money he earned from his standup comedy act. Rich people often do 2 jobs or businesses. They spend the money earned from one business and save from the other.
- They cook and dine at home: The kitchens of the millionaires are fabulous. It’s silly to compare our kitchens with theirs since there is no similarity between the two. You can find anything related to food industry there. A huge number of celebrities prefer to cook more at home and party with their friends instead of dining out at 7-star restaurants. Some of the eminent celebrities who love to cook at home are Taylor Swift, Emma Stone, and Selena Gomez.There are dual benefits of cooking and organizing parties at home. The first benefit is privacy. Celebrities can avoid media glare and enjoy as much as they want. The second benefit is it helps them to save money as well. Some celebrities prefer to cook hand-picked items and eat instead of using processed foods.
- They use coupons for shopping: Don’t be surprised when I tell you that rich people want to make the most of their money. They hate to overpay for things. Statistics reveal that 74% of the wealthy people with annual income of $75,000 or more use coupon codes when shopping online.
Rich people have an advantage though. Since they have lots of money so they can take full advantage of the sale offers at a high-end clothing store.
The saving habits of the affluent people are commendable. There are several stories on how rich people waste money and file bankruptcy. But an average millionaire knows how to manage money properly. He is frugal and wise. For example, Warren Buffet and Jim C.Walton. We should try to follow their saving habits instead of looking only at the glitz and glamour.
This Post is contributed by Patricia Sanders, a regular contributor at wiki.debtcc.com. You can connect with her here.
How to Pay Yourself Automatically
How I Save $500 Month By Cutting This One Thing Out
No More Excuses on Saving on a Low Income
Health Is Wealth
7 Habits of Highly Successful People