We have come to relate the term ‘millionaire’ with someone who splashes their cash on sports cars, designer clothes and diamond jewellery.
But, in reality, a lot of millionaires don’t have the trappings of this lifestyle at all. After all, you can only stay rich if you spend less than you earn.
How Millionaires Spend their Money
How you actually become a millionaire remains an elusive dream to the majority of us. Which is why I have studied some millionaires and their habits to show you how you can become a millionaire – by spending like they do.
1. Use Coupons for Shopping
You may be surprised to learn that high earners are the people who clip the most coupons. After all, the rich stay rich by being smart with their money.
Celebs like Sarah Michelle Gellar (Buffy actress), Kristen Bell (Frozen actress) and Carrie Underwood (amazing country singer) all admit that they enjoy clipping coupons to save money on their groceries and general shopping.
2. Millionaires Wear Cheap Clothes Too
Examples of this are Divergent actress, Shailene Woodley who says she only buys used clothes to save the environment.
Star of Sex in The City, actress Sarah Jessica Parker, has also admitted that she dresses her children in hand-me-downs to save money on clothes.
Jennie Garth, an American actress known for starring as Kelly Taylor throughout the Beverly Hills, 90210 TV show, says that she saves money on clothes for her children by specifically choosing items that will already go with what they already have. Once they have outgrown their clothes, they then donate or sell them.
At a red carpet event you’ll see actresses wearing beautiful designer gowns (which they have usually borrowed for the evening). But some actresses shun expensive threads, choosing instead to wear a cheap dress, like when Kristen Bell wore a $45 Target dress to an event.
Related: How to Look Good for Less
3. Stick with a Cheap (but decent) Car
Buying a flashy car is usually one of the first things you picture when you think about being a millionaire.
However, not all millionaires stay millionaires – and spending lots of money on cars is not necessarily something all incredibly successful people do.
Alice Walton, heiress to the Wal-Mart Stores and the 2nd richest woman in the world, drives around in a 2006 Ford F-150 King Ranch, which has a value of around £32,000.
Oscar-winning actress Jennifer Lawrence, star of The Hunger Games, X Men and Silver Linings Playbook, has openly said that she has been brought up to live a frugal lifestyle, and finds making large, extravagant purchases difficult.
She owns a Volkswagen with an estimated value of around £28,000 – and although she has more recently been spotted driving a Chevy (estimated value of £31,000) it’s still a frugal purchase for a Hollywood A-lister.
Cars are a huge expense and depreciate as soon as they are driven off the lot – buying a sensible second hand car that’s well made, safe and in cash, will save you from an enormous payment that will take years to pay off.
4. Cut the Cable and Invest in Yourself
Around 67% of rich people say they only watch TV for an hour or less a day. Think how much money that would save you on your TV package and electricity bill per month!
Instead of lying on the sofa for 8 hours a night watching TV, rich people do other self-improving activities, such as work, exercising, reading and spending time with their family.
Millionaires are always working on ways that they can improve and grow. They have the same 24 hours in a day as the rest of us, but they make sure that they use these hours to the best of their advantage.
5. Set Yourself a Budget or a Spending Plan
Pirates of the Caribbean actress Keira Knightly gives herself an annual allowance of approximately £39,000.
Also, when quirky New Girl actress Zooey Deschanel got divorced, all of her expenditure was released so anyone could see what she earned, and what she spent her money on.
Many were surprised to see that she has a budget, with only $22,500 (£18,153) of her $95,000 (£77,000) pay cheque each month being spent on household items such as food, clothes, laundry etc. And she only has three credit cards – but each have a balance of zero.
6. Live Below Your Means
This list highlights one simple fact: millionaires (and billionaires) live below their means. They have financial smarts, and know that you must spend less than you earn in order to stay rich.
Being rich is not the most important thing in the world – but it can allow you a lot of freedom and less stress. If you have a lot of money you can retire early, stay at home with your babies, and travel the world – the possibilities are endless.
This post was written by Francesca. Francesca blogs at From Pennies to Pounds where she shares her journey of paying off debt, saving money and making money to achieve financial freedom.
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