9 Frugal Habits of Wealthy People
Have you ever wondered how wealthy people got so rich? Sure, some were lucky to receive a large inheritance or win the lottery. But some people who become wealthy have mastered a set of key financial and life habits. And surprisingly (or not), frugality is at the core.
1. They Don’t Overspend
In order to grow your wealth, you have to accumulate money. Really consider what this means because this is the foundation of all things ‘wealth building.’ Every time you get a paycheck, you must try to not spend all of your money. If you can spend less than you earn, then your wealth grows.
Yes, your income does affect your ability to generate wealth. But please be aware that mindless spending is always met with the same result: all of your money gets spent.
Are you mindful of your spending? Do you budget? Do you spend your money efficiently and to its fullest potential? Many people who try a budget for the first time feel like they got a raise. When you become aware of the reality of your money — when you lay out your finances on paper — you know exactly what you must do to grow your wealth.
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2. They Pay Cash
Wealthy people don’t play around with debt. If they don’t have the money, they don’t buy it. That’s why they pay cash (or equivalent) for all their purchases.
In most cases, debt doesn’t make sense. For one thing, it usually costs money in interest. If you’re considering financing something, it’s because you can’t afford to buy it in cash, right? So, how can you afford to pay extra for it? Spoiler alert: You can’t.
And if you really can afford a monthly payment, that means you can afford to save up and pay cash, yeah?
Think like a wealthy person and take a pass on financing.
3. They Have Emergency Funds
Wealthy people pay cash for purchases, and they pay cash for emergencies, too. That’s because they have a safety net in the bank, ready to absorb unexpected expenses.
Personal finance experts are forever touting the benefits of an emergency fund, and with good reason. If you don’t have one and can’t cash flow a surprise expense, you end up charging it to a credit card. Then you find yourself trapped under the weight of crushing interest rates. By the time you dig yourself out, there’s another expense to deal with.
That’s no way to get ahead. Start by building a $1,000 emergency fund and see how much easier life gets.
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- Related: 9 Essential Dave Ramsey Tips
4. They Invest
Keeping spending in check, avoiding debt like the plague, and ensuring you have emergency cash allows you the financial freedom to invest. And make no mistake, investing is the secret to building wealth.
The poorly understood truth is that almost anyone with an average income can become rich if they invest consistently over a long period. Money + time + compound interest = wealth.
The longer you can leave your money invested, the longer it has to grow. So the best time to get started is the minute you start earning an income. And the second-best time is right now.
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5. They Prioritize Their Health
Take a moment to notice that the way you do one thing is the way you do everything. Then take advantage of this knowledge. When you become more mindful of anything in your life, you become more mindful of everything in your life.
Take care of your health because it’s important. Your time and money are important.
6. They Read. A Lot.
Wealthy people are able to keep their focus. And how do they tap into that focus? They read! Focus is the key to not missing an opportunity. If you can notice things others miss, you’re on your way to growing wealth.
Now, I know what you’re thinking. You’d love to read more, but you don’t have time. A good option is to read before bed because it helps you to fall asleep. Read anything you’re interested in (fiction is good!).
Or if you really don’t have the desire to read, try Audiobooks.
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Audiobooks have the edge over traditional books because of their versatility. You can’t read a regular book while you’re driving or running, but you can take an audiobook pretty much anywhere. That means most people can ramp up their reading without carving out any extra space in their schedules.
When it comes to Audiobook selection, Audible is the best there is. Plus, subscribers get free access to original podcasts and other cool content.
7. They Keep a Clean Home
If you visit most wealthy people at home, you’ll notice a trend: Their spaces are clean, clutter-free, and optimized.
That’s because clutter is distracting and stressful. It interferes with mental clarity and productivity, and it keeps you from relaxing. Sometimes it actually makes it hard to find what you need when you need it. That’s the last thing you need at home or in life!
Maintain Order with Simple Habits
Hiring a cleaner isn’t out of the question. If you can afford it, go ahead and spend money on something that makes your life better and easier.
But these daily habits will help you stay on top of cleaning:
- Make your bed every day
- Give bathroom surfaces a quick wipe before you hop in the shower
- Clean up from dinner before bed
- Put laundry away as soon as it’s dry
To keep clutter at bay:
- Be intentional about what comes into your home
- Consider a one in, one out rule: If you buy something new, sell or donate one existing item
- Assign everything a place and end each day with every item in its place
- Consider mounted shelves to create storage without sacrificing floor space (especially useful in smaller homes)
8. They Don’t Ignore Problems
Do you know when you notice a minor issue, like your car making a funny noise? You probably let it slide and address it if and when it becomes a significant problem. Seems reasonable enough.
Wealthy people don’t do that. They get it checked out right away, never giving it a chance to turn into a major problem. This avoids a potentially stressful and expensive situation. And whose life wouldn’t be better with fewer stressors and expenses, am I right?
If something seems off, address it right away. Stay a step ahead and your life will be easier — not to mention cheaper.
9. They Are Present and Mindful
Wealthy people have mastered an important skill: They focus on the here and now. Wherever they are, whatever they’re doing, they are present. That means they aren’t daydreaming, they aren’t procrastinating, and they certainly aren’t scrolling social media when they’re supposed to be working.
Research shows that no one is really good at multitasking. Being mindful of the task at hand makes you more effective and efficient. It allows you to accomplish more and derive more value from everything you do.
Master Mindfulness with Meditation
Read interviews with almost any successful person, and you’ll hear meditation touted again and again.
It’s not as new-agey as it sounds, and you don’t need to head on a 14-day silent retreat to start a practice. Meditation just means learning to be mindful of the present moment. As little as five minutes a day can have lasting benefits to your productivity and mental health.
Don’t know where to get started? Insight Timer’s Free Course “Learn How to Meditate In Seven Days” teaches you everything you need to know.
Need help saving money? Read these next…
- Stop Being Poor When You Break these Habits
- The 7 Money Lessons You Wish You Learned Growing Up
- These are the 5 Things Rich People Refuse to Buy (And You Should, Too)
Want more life hacks? Check these out…
- A Tidy Home is Within Reach With These 8 Habits
- Be Like Highly Productive People and Follow These 7 Hacks
- Be a Better Grocery Shopper: The 7 Tips to Get You There
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