Do you ever wonder how the wealthiest people around the world maintain and build their wealth?
There’s a reason that Warren Buffet is considered to be the model of wealth for so many people. According to the Bloomberg Billionaire’s Index, Buffett is the third richest person in the world, with a net worth of $84.1 billion. Put it this way: that amount is a whopping 1,424,559 times the median household income in America.
And yet, Buffett is a model for millions, including both those with and without accumulated wealth. Why is he so successful and admired? Because despite his wealth, he continues to maintain a modest and frugal lifestyle. In fact, Buffett still lives in the Omaha, Nebraska home he purchased in 1958 for only $31,500.
Like Buffett, wealthy individuals who live well below their means and are as mindful of their costs as they would be if they had a fraction as much money are the ones who continue to grow their money successfully. These eight frugal habits of rich people can help you save money, reduce debt, and live life to the fullest.
1. They Make Money Work For Them
Making money in the form of your paycheck is one thing, but successful people also try to put their money to work. Stuffing money in a mattress will protect your money, but you’re not taking advantage of savings vehicles like high-interest savings accounts or Certificates of Deposit (CDs) that will help your money grow while keeping it safe.
2. They Save More Money
If you can send around 10% of your paycheck to savings, you’re on track to have a cushion for any future wants or needs. Wealthy people, on the other hand, aim to save more like 20% of each paycheck. You might think that they have increased spending power, but like you, they live life on a budget that includes a focus on ways to save money.
3. They Automate Savings And Bill Pay
You may be on top of your regular payments, but it’s also easy to get distracted, which is why highly successful people choose to automate their systems as much as possible. To save money, they might decide to have set amounts regularly transferred to a savings account. Or when it comes to bill pay, they may set those up automatically, so their credit never takes a hit.
4. They Stay On Top Of Everything
Even if you automate many of your financial practices, to follow in the steps of the successful, you still need to monitor everything. From your account statements to your credit score, it’s crucial that you know where your money is and what it is doing. And checking when you remember won’t be enough – aim to survey your accounts weekly, and you’ll have a better feel for your finances in general.
5. They Give Back
Highly successful people know the importance of giving back – and not just for the charitable tax deductions. Both Warren Buffett and Bill Gates have pledged to give away the entirety of their fortunes, and many successful people make it a mission to set up foundations or other ways of giving back to the communities they came from. But even if you don’t have money, giving back can be done in the form of donating your time, whether at a charitable event or mentoring up-and-coming folks in your field. The added benefit that many of these people find is that you also expand your network when you give back, increasing more opportunities for making money in the future.
6. They Don’t Splurge
Despite what certain celebrities may have you thinking, the most successful people do not splurge on hundreds of thousands of dollars’ worth of clothes or experiences. In fact, Buffett reportedly eats fast food regularly, not quite the elegant dining choice you might think. Keeping your money in the places where it matters – your savings and investment accounts – means living a lifestyle within your means after those amounts are factored in. Bring coffee from home, make your own lunch, and be mindful of all of your costs.
7. They Have Hobbies
One of the reasons that highly successful people don’t need to splurge to get a rush from spending is that they find hobbies. Buffett pays bridge several times a week and enjoys playing the ukulele. When you can find moments during the week to do something you enjoy, you aren’t going to need to spend money for an enriching experience.
8. They Clip Coupons
This one may be the hardest to believe, but do you know that Buffett often uses coupons to pay for things – including his fast-food lunches? By clipping coupons, you can save money on every purchase you make. This results in saving money that can go back to your savings accounts to help you build more wealth.
These are only a few of the habits that highly successful people implement to help them both save money and make money, and you’ll notice, these habits are recommended for everyone from those looking to reduce debt to those looking to build wealth. Get started living your life like Buffett now, and you never know where your future will take you.