It may seem like billionaires are living in a world of endless luxury, but many of them are actually extremely frugal despite having so much money. These habits are not simply about being cheap; they go beyond that.
We can learn a lot from rich people about how they spend their money. Below, we uncover eleven frugal habits of some of the richest individuals on earth.
1. Living Below Their Means
Living below your means requires spending less than what you earn each month by cutting back on unnecessary expenses or luxuries. It means making conscious decisions about where your money goes – focusing only on needs and avoiding unnecessary debt.
An excellent example would be Keanu Reeves, who has an estimated net worth of over $380 million. Despite this, he leads a relatively ordinary life. He uses public transportation, donates most of his income to charity organizations, and lives in an ordinary house rather than an extravagant mansion.
2. Choosing a Modest Home
Not all billionaires live in mansions. Many know that selecting a home that suits their needs without going overboard can actually reduce stress and lead to greater happiness.
Consider Warren Buffett as an example. Even with his $134.9 billion fortune, he continues to reside in the modest home he purchased for $31,500 in 1958 in Omaha. His choice serves as a reminder that, above all, home is where the heart is.
3. Flying Commercially
Even some of the wealthiest individuals choose to fly commercially since it is both practical and more affordable.
Ingvar Kamprad was an excellent example here. He was the founder of IKEA but never flew first class despite having $42.5 billion before his passing. During an interview, he questioned the purpose of spending more money on a flight if it’s not going to get him to his destination faster.
4. Cooking at Home
Many wealthy people prefer to cook food themselves at home. This is not only a way to save money but also an opportunity to lead a healthier lifestyle.
For example, Mark Cuban, who has a net worth of over $5.5 billion, still prefers eating home-cooked meals with his family rather than dining out at fancy restaurants. He has also shared that he and his family like to do their own chores, like laundry, together.
5. Buying Used or Second-Hand Items
The practice of buying second-hand or used items is often considered better than buying new ones, as it helps save money and reduce waste. In fact, thrift shoppers save around $1,760 per year by buying second-hand items.
Sarah Jessica Parker, who is worth $200 million, loves vintage fashion and shopping at thrift stores. The actress even expressed during an interview that she only buys second-hand clothes for her son after watching a documentary about labor conditions in the fashion industry.
6. Driving an Unexpensive Car
People often think that if you’re rich, you have to own the most expensive cars. But that’s not how it is for everyone who has a lot of money.
For instance, Mark Zuckerberg, one of the most influential CEOs in the world, drives an average car. Despite his net worth of $169 billion, he still mainly gets around in a Volkswagen Golf GTI – a car you don’t expect billionaires to be driving!
7. Using Coupons and Discounts
Even those who are not strapped for cash see the value in getting a good deal. They know that coupons and discounts are great for making everyday purchases cheaper.
Sarah Michelle Gellar is worth about $30 million. She’s been really open about her frugality and spending habits during interviews. According to Sarah, she will always use coupons to avoid paying full price or overspending – no matter how rich she becomes.
8. Investing in Quality
Being frugal doesn’t always mean spending less. Sometimes, you have to spend more to save money in the long run.
Take Jeff Bezos, for instance. For years, he bucked the trend of driving the fanciest car his money could buy. Instead, he would get around in a Honda Accord.
Now, the Accord costs a little more than a budget sedan, but it also lasts longer. The average Accord may not be decommissioned until it drives over 300,000 miles, which is a good 100,000 miles more than a budget sedan.
Spending a little more on quality can keep those wheels turning for longer.
9. Focusing on What Matters
Many of the people we have talked about so far know the value of being happy with what they have. They focus on what matters.
Something Tim Cook, Apple’s CEO, once said about business applies to this concept of focusing on what matters.
“We say no to good ideas every day,” said Cook. “We say no to great ideas in order to keep the number of things we focus on very small in number so that we can put enormous energy behind the ones we do choose.”
This concept of focusing on what matters helps the super-rich avoid falling into the trap of always trying to have what they don’t have, which can lead to misery.
10. Doing It Themselves
Some of the super-rich will try to take care of manual jobs themselves rather than hiring a professional to do it.
This frugal habit gives them a sense of accomplishment while also saving them money. It teaches that we’re less dependent on spending money than we may realize.
A great example of this concept is former first lady Michelle Obama. She is well-known for her gardening. In fact, she cultivated and maintained a vegetable garden on the South Lawn of the White House that exists to this day.
11. Setting a Budget
While not all of the traits we’ve described so far are shared by all of the super-rich, one habit must be formed to maintain wealth: setting a budget and sticking to it.
A great example of this concept is Dave Ramsey. Known today as a personal finance expert who built a fortune teaching people practical advice for money management, he started out in real estate, where he became a millionaire at the young age of 26. However, he went bankrupt at 28 because he didn’t know how to manage his money.
The lessons he learned are now the principles he teaches millions of people around the world. They include living debt-free, budgeting, and always practicing disciplined financial planning.
Final Thoughts
The frugal habits of rich people sometimes make us reevaluate our own financial habits. Being wealthy is not only about having a lot of money, it’s also about being smart with it.
Being frugal teaches us to appreciate what we already own (or don’t), weigh our options before spending, and keep our eyes on the prize long-term.