To live like a millionaire, you need to be frugal like a millionaire. And that’s not something people always want to hear. Most of us are too focused on the caviar dreams and champagne wishes aspect of being rich. But many millionaires actually live pretty frugally. They’re frugal not in spite of being millionaires; they’re millionaires because they’re frugal.
Sure, social media is full of celebrities and reality TV stars flexing their latest purchases and expensive possessions. Those types of millionaires do exist, but I won’t be giving them any attention in this blog post. Instead, this article will cover some of the admirable habits of the frugal millionaire. I’m talking about people like Warren Buffett (still lives in the same house he bought in the 1950s) and former San Antonio Spurs superstar Kawhi Leonard (still drives his old 1997 Chevy Tahoe). These people are my millionaire role-models (although Warren Buffett is actually a billionaire many times over!).
I’m obsessed with learning how to live frugally and save money not because I’m cheap (although there is some truth to that!) but because I want to become rich eventually. Of course, there is no guarantee that I will become rich. But even if I don’t at least I’ll be in better financial health, thanks to my being frugal with money. So let’s check out the different ways to be a frugal millionaire. This blog post will cover ways to be frugal that will be useful to both millionaires and non-millionaires alike. Let’s get to it!
Drive a Modest Vehicle
In our culture, car ownership is one of the major signifiers of success. That’s to be expected. Who doesn’t want a shiny sports car or a giant SUV to parade around town in? But the thing is, these vehicles aren’t just expensive, they’re also expensive to maintain. And that’s where they get ya. For example, if you could somehow afford a Ferrari, the cost of maintaining your shiny stallion is a couple of thousand dollars a year – even more for major maintenance, which you will need to spend on every 3 to 5 years. When you buy a fancy car, you need to spend on it, and that money could be put to better use, like earning you more money via investments.
I prefer to follow the lead of people like Kawhi Leonard, who I mentioned a while ago who drives a relatively modest truck.
One of the best frugal money saving tips I’ve come across is to, simply, avoid trying to keep up with the Joneses. When I mentioned trends, I mentioned any type of trend that we may fall for. And that includes fashion, tech, and lifestyle trends. By definition, trends don’t last. They’re here one season, then gone the next. And there’s a reason for that. It keeps you buying stuff. It’s like planned cultural obsolescence. So I recommend getting timeless items that will never go out of style. I personally love fashion. But to save money, I’ve built a “capsule wardrobe” full of fashion staples that will never go out of style. You can apply that philosophy to all aspects of your life. If you’re into cars, get a modest vehicle that is known for being reliable. Decorate your house with timeless furniture that will always look stylish even after the latest decorating styles are no longer in fashion.
Don’t Just Save, Save Smart
When it comes to financial advice, the most common one is always: save money. I myself am a supporter of saving money. That’s the gist of a frugal lifestyle, right? Saving money. But to save money, you can’t just take a chunk of your income and stash it away. For starters, that’s a bad investment practice. Second, you’re ignoring your immediate needs. What’s the point of having tons of money stashed away when your house and car are dilapidated.
I’m advocating a smarter approach to saving. I got that idea when I watched an interview with Jay Leno, who I’m sure is pretty loaded. He told the story of how, when he was young, he had two jobs. One for immediate expenses, and another for saving. Even with considerable earnings from his daily talk show hosting gig, he lived off his other means of income, like live appearances and stand-up gigs. That’s saving smart!
Here’s another smart saving method: putting $25 a week into an IRA (or Individual Retirement Account) is enough to let you retire comfortably when you turn 65! That’s smart saving, right there.
Know When to Reward Yourself
I wholly support treating yourself within reason. Let’s face it: living frugally and trying to build up savings can feel like a slog at times. But when you reward yourself from time to time, it gives you a reminder of why you’re doing all this saving in the first place.
I also think the key here is to spend reasonably and within your earning capacity. Don’t go emptying your bank account to go on a spendy shopping spree. I mentioned Jay Leno a while ago. The man has a really vast collection of notable and vintage cars. So vast, in fact, that he stores his collection in a large garage that resembles an airplane hangar. I’m sure it costs a lot of money to obtain and maintain all those cars. But here’s the thing: as crazy expensive as that collection is, Jay Leno is still living within his means.
“Gamify” the Frugal Lifestyle
As I mentioned earlier trying to live frugally is no easy task. The key to staying on track is to establish milestones you can try to hit. Yep, just like the levels of a game. By making a game out of the process, you chop up the task into easily-manageable milestones. And when you hit a target, it gives you a sense of accomplishment, instead of simply going for this large undefined goal with no real end. And the great thing about this is that it’s easy to get the entire onboard. And having the cooperation of your entire family is essential to saving money!