Making Sense Of Cents

Learn how to make extra money, how to save money, how to start a blog, and more.

JOIN OVER 300,000
MONTHLY READERS!
  • HOME
  • BLOG
  • Make Money
    • best online jobs
    • passive income ideas
    • paid online surveys
    • How To Make $100 A Day
    • 80 side job ideas
    • More Extra Income Ideas
  • SAVE MONEY
    • Free Amazon Gift Cards
    • 16 Alternatives To Cable TV
    • best rewards credit cards
    • How I Paid Off My $40,000 Student Loans
    • More Money Tips
  • Categories
    • Income Reports
    • How To Save Money
    • Extra Income Ideas
    • Blogging Tips
    • Career Advice
    • College
    • Pay Off Debt
    • Retirement
    • Self-Employment Tips
    • Travel
  • BLOG COURSES
    • AFFILIATE MARKETING COURSE
    • MAKING SENSE OF SPONSORED POSTS
    • HOW TO START A BLOG
  • Contact
    • About
    • Contact
    • Advertise
    • Recommendations

Why You Should Spend Like A Millionaire- The Frugal and Smart Money Habits of Millionaires

Last Updated: April 7, 2021 BY Michelle Schroeder-Gardner - 58 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

2498 shares
  • Facebook1262
  • Twitter
  • Reddit
  • LinkedIn
  • Email

Why You Should Spend Like A Millionaire- The Frugal and Smart Money Habits of MillionairesYou may have shook your head when you first read this title. However, hear me out and continue reading to learn more about the habits of millionaires! The rich are rich for a reason- most of them know how to manage their money correctly.

Sure, there are stories about rich people who spend their money like crazy and end up in bankruptcy.

But, surprisingly, the average millionaire is frugal, and they know how to manage their money well.

Related posts:

  • 75+ Ways To Make Extra Money
  • How To Make Money Selling on Amazon
  • How I Made $979,000 in 2016 While Traveling Full-time
  • 30+ Ways To Save Money Each Month

Here are some examples of millionaires and billionaires who are frugal:

  • Warren Buffett lives in a house that he bought in 1958 for around $30,000.
  • Mark Zuckerberg drives an Acura.
  • John Caudwell (worth $2.7 billion) rides his bike 14 miles to work every day and even cuts his own hair.
  • Jim C. Walton (son of Walmart founder) drives an old truck with no air conditioning.

I have personally met several retirees who have millions and live in an RV. RVing is a ton of fun, but a lot of people just assume that RVers have no money. If only they actually knew! We made one friend while RVing who actually has a nice house and millions in the bank, but he lives in an RV that is worth less than $20,000. You never would have guessed!

If you want to learn how to become rich (whatever amount of money or lifestyle that means to you), continue reading in order to learn more about the money management habits of millionaires.

 

They wear the same outfits.

President Barack Obama once said, “You’ll see I wear only gray or blue suits. I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.”

Many other successful people feel the same way, including Mark Zuckerberg, the late Steve Jobs, Albert Einstein, and many others.

The average family spends $1,700 a year on clothing, which is a lot of money. Plus, the average person wastes anywhere from 10 to 30 minutes a day when deciding what to wear!

Having multiple outfits can lead to wasting time deciding what to wear, as well as wasting money.

 

They have more than one source of income.

A lot of millionaires have many sources of income, and this is one of the many great habits of millionaires.

They may have a day job, a business, rental properties, dividend income, and more. This allows them to bring in more money.

They also do this because millionaires know that one source of income may not last forever, and they are also able to lessen their risk by having multiple income streams.

Read about some of the many ways to make money at 75+ Ways To Make Extra Money.

 

They have long-term goals.

Successful people and millionaires are known to set goals, especially long-term ones. They are extremely determined and without goals it would be hard to be successful.

Setting goals is important because without a goal, how do you know where you’re heading? Goals can help keep you motivated and striving for your best.

Please keep this quote from Statistic Brain in mind:

People who explicitly make resolutions are 10 times more likely to attain their goals than people who don’t explicitly make resolutions.

And, it’s true!

 

They have a budget.

Yes, even millionaires have budgets! Not all of them have a traditional budget, but trust me, they know where their money is going and they are watching their cash flow closely.

Tracking your money and knowing where it is going can help you see where you’re wasting money and what spending habits need to be changed.

 

They educate themselves on financial matters.

When millionaires are unsure of a financial decision or implication, they either seek out financial advice from an expert and/or they seek out the knowledge they need to know by educating themselves.

Millionaires are always learning.

They read numerous books, attend classes, read the newspaper, and more.

 

They know the value of experts.

Continuing from the previous habit, the rich are interested in educating themselves, but they also know when to hire help.

Knowing when to get help from accountants, lawyers, experts, and more can help them take advantage of confusing laws, areas where they aren’t experts, etc. This can prevent wasteful spending, bad investments, and unnecessary legal issues.

This helps them save time as well as money!

 

They don’t fall for lifestyle inflation.

Millionaires tend to live below their means. Yes, many of them still spend money extravagantly, but many aren’t living paycheck to paycheck in order to do so.

Many millionaires buy items used, they drive “normal” cars like Toyotas, and they aren’t trying to keep up with the Joneses.

This is drastically different from those who aren’t millionaires.

Here are some money statistics that may scare you:

  • 68% of people live paycheck to paycheck.
  • 26% have no emergency savings.
  • The average household has $7,283 in credit card debt.
  • The average monthly new car payment is around $480.

Many people try to keep up with others and fall for lifestyle inflation, which can prevent you from being good with money.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards so that you can (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.

 

They pay themselves first.

Millionaires pay themselves first.

Sure, they have more money to work with, but they always make sure to save money before spending it.

Paying yourself first is when you put money into savings as soon as you receive your paycheck. Doing this may allow you to save more money and cut back on unneeded spending, and it can help you prepare for the future.

 

They invest.

Millionaires make their money work for them, and that is how they stay rich.

Investing is important because it means you are making your money work for you. If you aren’t investing, your money is just sitting there.

This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest, then you can actually turn your $100 into something more. When you invest, your money is working for you and hopefully earning you income.

For example: If you put $1,000 into a retirement account that has an annual 8% return, 40 years later that would turn into $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would then turn into $3,015,055.

Learn more at The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!

 

They still use coupons and haggle.

Yes, one of the many habits of millionaires is that they tend to still use coupons and even negotiate in order to get the best pricing!

What other habits of millionaires am I missing? Share in the comments below!

Related Posts

  • 9 Early Retirement Stories That Will Motivate You9 Early Retirement Stories That Will Motivate You
  • 75+ Ways To Make Extra Money75+ Ways To Make Extra Money
  • What Are Dividends & How Do They Work? A Beginner’s GuideWhat Are Dividends & How Do They Work? A Beginner’s Guide
  • What You Need To Know About Investing, Retirement Planning, and MoreWhat You Need To Know About Investing, Retirement Planning, and More
  • 13 Best Early Retirement Books – You NEED To Read These Books13 Best Early Retirement Books – You NEED To Read These Books
  • 9 Tips For Financial Success And Freedom – Take Control Of Your Money9 Tips For Financial Success And Freedom – Take Control Of Your Money
2498 shares
  • Facebook1262
  • Twitter
  • Reddit
  • LinkedIn
  • Email

58 Comments
Filed Under: Budget, Retirement Tagged With: Budget, Retirement

About Michelle Schroeder-Gardner

Michelle is the founder of Making Sense of Cents, a blog about personal finance and traveling. She discusses how her business has evolved in her side income series. She paid off $40,000 in student loans by the age of 24 mainly due to her freelancing side hustles. Click here to learn more about starting a blog!

Comments

  1. giulia says

    August 29, 2016 at 3:22 am

    innteresting!

    Reply
    • Elise // House of Brazen says

      August 29, 2016 at 6:13 am

      Awesome post Michelle! Another thing I’ve seen a lot of millionaires putting a lot of emphasis on whether consciously or sub-consciously is always working through their limiting money beliefs.

      Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 11:54 am

      Haha thanks!

      Reply
  2. Kate @ Cashville Skyline says

    August 29, 2016 at 5:13 am

    I love this, Michelle! Reading The Millionaire Next Door completely changed my views on building wealth. Yesterday, the drummer from Rascal Flatts posted on Facebook about how his family still drives a 2004 Toyota Corolla and live way below their means to reach financial independence sooner. It’s a great message!

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:01 pm

      Yes, what a great message!

      Reply
    • Meri says

      July 8, 2017 at 5:59 pm

      One of my favorite finance books! I read it years ago with so many take-aways.

      Reply
  3. Dannielle @ Odd Cents says

    August 29, 2016 at 5:19 am

    Nice article. I’ve also noticed that millionaires understand the value of money and that impacts the decisions that they make. Living below your means is my favourite tip on the list because it forces you to think about your needs and your wants.

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:02 pm

      Thanks!

      Reply
  4. Amanda-LivingFullyandFree says

    August 29, 2016 at 5:24 am

    I just read an article on millionaires who spend their money wisely. Thanks for tying that info in!

    Amanda

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:02 pm

      Thanks!

      Reply
  5. The Green Swan says

    August 29, 2016 at 7:05 am

    Great read! It is a bid surprising how some millionaires live, but it totally makes sense. Although I do see frugality as a means to an end, I’m sure I still won’t get rid of many of my frugal habits once I am retiring comfortably. Good reminders!

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:03 pm

      Thanks!

      Reply
  6. Holly@ClubThrifty says

    August 29, 2016 at 7:12 am

    I think you pretty much covered it! I know several millionaires who live very frugally. The people who live like millionaires and spend lavishly don’t always have the bank accounts to match.

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:04 pm

      So true!

      Reply
  7. Penny @ She Picks Up Pennies says

    August 29, 2016 at 7:15 am

    I have a family member who is a multi-millionaire (sadly, I’m not on the same branch of the tree). The most impressive thing about them is that they absolutely do not care what others think or what others do. Also, they’re very generous, not just to charities but with family and friends. Not just with money, but with their time!

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:05 pm

      That is so great to hear 🙂

      Reply
  8. Lila says

    August 29, 2016 at 8:02 am

    We can learn a lot from millionaires for sure! I wish more normal people would invest and make their money grow and pay themselves first. People really undervalue those two tips even though we live in the age of information.

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:11 pm

      Yes, for sure!

      Reply
  9. Kelsey @ Tealmama says

    August 29, 2016 at 10:12 am

    Very interesting. I love that Warren Buffet lives in a house he bought in 1958. I was watching Mark Zuckerberg’s live Q&A in Rome this morning and he was wearing a t-shirt and jeans. Doesn’t surprise me he drives an Acura. Great tips to live by, thanks for sharing. 🙂 And Happy Monday!

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:12 pm

      Welcome 🙂

      Reply
  10. Liz says

    August 29, 2016 at 10:33 am

    This is great! I’ve heard a lot how millionaires read several books a month. There’s always room to learn! Love the interesting tidbits!

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:15 pm

      Yes, always room to learn 🙂

      Reply
  11. Kara Vogel says

    August 29, 2016 at 11:34 am

    This is great to spread the word! My parents always told me “The best way to always have money is not to spend it”. I always try to remember that advice because if you consistently save first and think about your purchases, you will then have the money to do the things you actually want to do. It’s all about being intentional with how you spend/save your hard earned $$!

    Thanks for helping spread this wisdom (and to buck the stereotypes of wealthy families/individuals).

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:15 pm

      Thank you!

      Reply
  12. Carrie says

    August 29, 2016 at 11:38 am

    A lot of the millionaires I have talked to say, “It took me lots of hard work and discipline to get to my financial freedom status. Once you have those disciplines down, it’s really hard to see why you’d break them. It becomes a lifestyle that you like.” I personally loved that mindset!

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:00 pm

      Yes!

      Reply
  13. Elise // House of Brazen says

    August 29, 2016 at 11:57 am

    Awesome post Michelle! Another thing I’ve seen a lot of millionaires putting a lot of emphasis on whether consciously or sub-consciously is always working through their limiting money beliefs.

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:01 pm

      Thanks!

      Reply
  14. Danell says

    August 29, 2016 at 12:07 pm

    I think probably one of the biggest factors is not trying to keep up with the Joneses. If you don’t care what others think about you and don’t care about having all the latest, greatest, new stuff, you will just naturally have more money, which you can then put to work for you.

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 12:15 pm

      Yes, definitely!

      Reply
  15. Michelle Schroeder-Gardner says

    August 29, 2016 at 12:11 pm

    ” just because someone has expensive things – house, car, clothes, etc. – doesn’t mean they have a lot of money” EXACTLY! 🙂

    Reply
  16. Michael says

    August 29, 2016 at 12:18 pm

    Nice post, Michelle! I always knew that millionaires negotiate / haggle for the best deals, that is in their DNA.

    What I was surprised by was this – “households with average incomes of $100,000 or more actually clip more coupons than those who bring in less than $35,000”.

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 3:24 pm

      Right? I was surprised too!

      Reply
  17. Christine @ The (mostly) Simple Life says

    August 29, 2016 at 12:28 pm

    I always try to remember that being wealthy means that you have money saved. You could make a huge income, but if you spend it all, you don’t really have any wealth built up except maybe value in a car or house. Millionaires stay millionaires by saving, not by spending every penny.

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 3:24 pm

      Yes!

      Reply
  18. Tamara Mason says

    August 29, 2016 at 1:37 pm

    Many millionaires are generous with their money and use it to help others. Do they give because they are rich or are they rich, because they give. I find if I help others for the sake of giving it is more likely help comes to me.

    Reply
    • Michelle Schroeder-Gardner says

      August 29, 2016 at 3:24 pm

      🙂

      Reply
  19. Michelle Schroeder-Gardner says

    August 29, 2016 at 3:24 pm

    Definitely cringeworthy.

    Reply
  20. Lindsey says

    August 29, 2016 at 3:39 pm

    The using coupons one surprised me. I figured most of the wealthy people out there would give up habits like that because they felt that it was unnecessary.

    Reply
  21. Vicki@Make Smarter Decisions says

    August 29, 2016 at 7:24 pm

    I totally appreciate the idea of wearing the same (or at least similar) clothes. I work in a school right now and I so wish we had some kind of uniform. I dislike clothes shopping and deciding what to wear each day! I am fascinated at how many millionaires don’t care about clothes or what they eat each day. I was really surprised by the couponing though!

    Reply
    • Amanda says

      August 29, 2016 at 8:22 pm

      Great post, Michelle! Millionaires are often hard to spot with their frugal lifestyles!

      I’m with Vicki on the clothing. I love that many millionaires tend to have minimal clothing options. I don’t buy much clothing for myself, but not everything goes together. I like the idea of having a capsule wardrobe where everything goes together, but few items are needed.

      Reply
  22. DC @ Young Adult Money says

    August 29, 2016 at 10:50 pm

    Sometimes I wonder if people like Warren Buffet simply do not have the capacity to give energy towards buying an expensive car or moving to a new house. If you’re happy with what you have, why change?

    Reply
    • Michelle Schroeder-Gardner says

      August 30, 2016 at 9:45 pm

      For sure! As I said in the blog post, many of the wealthy do feel that way – they don’t want to waste any additional energy.

      Reply
  23. Jeno says

    August 30, 2016 at 11:52 am

    This is simply amazing to know, Michelle. Excellent post, it’s an eye-opener, I would say. Thanks for sharing this.

    I would like to share one of Mr. Warren Buffett famous quote, “If you keep buying things that you don’t need, then soon you will start selling things that you need”.

    We should not fall trap into Lifestyle creep to spend more and more.

    Reply
  24. Melissa says

    August 30, 2016 at 1:33 pm

    I didn’t know that many millionaires have multiple sources of income! I’ve never thought about that before, but most millionaires I know do have many different business opportunities going on at once! Great read!

    Reply
    • Michelle Schroeder-Gardner says

      August 30, 2016 at 9:46 pm

      Thanks!

      Reply
  25. JT says

    August 30, 2016 at 5:03 pm

    From my experience, I’ve seen 2 paths:
    1. The person who worked hard and saved for decades for that million. They are frugal and have the habits as you described above, or else they don’t become millionaires.

    2. The young analysts on Wall St making 6 figures right out of college who expect to be a millionaire in their 30s. They dress like a million bucks and spend a fortune renting their Manhattan apartments.

    Funny thing about #2: the ones in the firm worth over a hundred million (some billions) were dressed worse than the general public. Holes in sweater elbows, really ill-fitting suits, and bargain shoes.

    Reply
    • Michelle Schroeder-Gardner says

      August 30, 2016 at 9:46 pm

      “Funny thing about #2: the ones in the firm worth over a hundred million (some billions) were dressed worse than the general public. Holes in sweater elbows, really ill-fitting suits, and bargain shoes.” – Love this! haha

      Reply
  26. Christina Barbieri says

    August 30, 2016 at 6:24 pm

    Love this! This is so helpfull in my expieriences and how I’m trying to help others as well! It’s crazy how much a lil self control with your money will do! Thanks

    Reply
    • Michelle Schroeder-Gardner says

      August 30, 2016 at 9:47 pm

      Thank you!

      Reply
  27. Finance Solver says

    August 30, 2016 at 9:39 pm

    This is a great post! I think the most common misconception is that millionaires spend an exorbitant amount of money. The ultra-rich does spend a lot of money on boats and islands but the average millionaire got to being a millionaire because of frugal habits and goal setting over the long term. Act like how a millionaire acts and you will become a millionaire yourself!

    Reply
    • Michelle Schroeder-Gardner says

      August 30, 2016 at 9:48 pm

      Yes! “Act like how a millionaire acts and you will become a millionaire yourself!”

      Reply
  28. Jasmine Simone says

    August 31, 2016 at 11:48 am

    I really loved reading this. You find that people with no money spend loads on designer stuff to look like they have money but they guys that actually have money don’t show it off.

    Reply
  29. David @ Thinking Thrifty says

    September 2, 2016 at 5:38 am

    My granddad was so frugal as money was tight when my mum and her brothers were still young. He never changed his spending habits as he grew his wealth. When he sadly passed away we were in a state of shock that he had amassed just short of £2m in stocks, shares and hard cash. You would never have known he had so much from his lifestyle. I only ever knew him to have three cars in my entire life, none were bought new even though he got 25% discount from working at Fords!

    Reply
  30. Bill @ Wealth Well Done says

    November 24, 2016 at 4:17 pm

    We are on the path to millionaire status, and honestly, by looking at the image we portray you would probably never know it. We drive reliable, older cars that we take care of. We have a ton of outdoor hobbies (biking, snowshowing, rollerblading, hiking) that have some up-front equipment cost, but are free after that, And I look for awesome deals at goodwill rather than going out for dinner every night. We live an exciting, fulfilling, healthy, and happy life, and with all the money in the bank, I can worry less about work, and more about finding my purpose and answering the bigger questions in life like, why am I here? Who can I help? How can I live my life purpose. This is a much more fun way to live than worrying about how I am going to pay our bills. Check us out @ Wealth Well Done.

    Reply
  31. Carrie says

    November 21, 2018 at 4:33 am

    According to your description in this blog post, I already have the mind of a millionaire! I do alot of these things already – save money, negotiate and keep an eye on the best deals and bargains, don’t spend money unnecessarily, etc. Plus I am working on multiple income streams!

    I do agree that it is wise to not be dependent upon only one income stream – such as counting on one employer to provide for your entire life’s monetary abundance. Our world has changed by leaps and bounds every decade since I was born (I am an X-Gen), so we can’t ever truly expect our income sources to never change. They very likely will change, so we have to be willing to be adaptable and trust that we are capable to figure things out as we go along in life.

    It certainly also helps to have an “abundance” mindset, to believe that one is deserving of wealth and that being financially healthy is important for our overall well-being.

    Reply
  32. DNN says

    January 16, 2019 at 5:00 pm

    A few good things I’m happy about:

    1. I don’t drink any alcohol anymore
    2. I don’t smoke cigarettes
    3. I cut out fried foods
    4. I do more cardio
    5. I think positive
    6. I’m striving to live frugal

    Reply

Trackbacks

  1. The Sunday Best (12/25/2016) - Physician on FIRE says:
    February 20, 2023 at 7:07 am

    […] an oldie but goodie, Michelle @ Making Sense of Cents explains Why You Should Spend Like A Millionaire- The Frugal and Smart Money Habits of Millionaires. You already know how I […]

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Making Sense of Cents welcome page photo
Hello and welcome!
My name is Michelle and I'm the author/owner of Making Sense of Cents. Learning how to save money and make more money changed my life. It allowed me to pay off $40,000 in student loans, start my own business, and I now travel full-time.

As Seen On

as seen on
How To Start A Blog
making sense of affiliate marketing for bloggers
My Monthly Online Income Reports
My Student Loans Are Gone - How I Paid Off $38,000 In Student Loans
How To Prevent Financial Fraud From Happening To You
Buying a House at 20 (How I did it)
How To Make Money Blogging Picture
How To Save 50% Or More Of Your Income Picture
How I Graduated From College In 2.5 Years With 2 Degrees AND Saved $37,500
75+ Ways To Make Extra Money

 

HOME
ABOUT
CONTACT
FREE FB GROUP

PRIVACY POLICY
TERMS OF USE
DISCLAIMER / EARNINGS DISCLAIMER
Copyright © 2011 - 2023. All Rights Reserved.

© 2023 Making Sense of Cents
Design by Swoon & Co. Creative