How to Spend Like a Frugal Millionaire
- Kimberly Palmer
- On Wednesday May 27, 2009, 10:04 am EDT
Today's guest post comes from Jeff Lehman, author of The Frugal Millionaires.
Saving thousands while still spending. Millionaires
make up just 2 percent of the population. They get a bad rap during
recessions for being wasteful with their money and are frequently used
as examples of excess. It's the millionaires that you don't see that
you can learn from in times like these. I call them the frugal
millionaires and interviewed 70 of them to uncover ways we can all be
smarter with money.Nearly 70 percent of the economy is based on
consumer spending. To keep the economy going we need to keep spending
but not waste money in the process. This is where the frugal
millionaires come in. They've been smart with their money all along and
haven't lost it all and had to remake it. These are the kind of people
you want to learn from when it comes to spending your money.
Spending philosophy. Frugal
millionaires are unique thinkers when it comes to spending money: 1)
they can easily delay their need for gratification when purchasing; 2)
they are resourceful in getting what they want by carefully timing
their consumer purchases; 3) they make living below their means
painless; 4) they don't like wasting anything (especially money); 5)
their sense of "self-entitlement" is highly minimized: and 6) spending
is OK with them...depending on what they are buying (think:
appreciating vs. depreciating assets).[For more, see, "10 Secrets of Millionaires' Money Management."]
Buying tips. These
millionaires keep more money than they spend, that's why they are rich.
Their tactics work for them so they'll work even better for you. Key
Point: They don't view shopping as a sport. They shop efficiently and
spend their time doing more important things with their lives. Here are
their tips that will help you save while spending:
Cars:
Buy used (or off lease) fuel-efficient cars, often with "certified
pre-owned" warranties. This warranty can be better than a new car, plus
the initial depreciation hit is avoided. Drive the car for a long time
and never lease it.
Eating Out: Bring half of a meal home
to eat later (this also saves the waistline). Eat at happy hours. Bring
wine from home and skip dessert. Value food quality over expensive
ambience.
Eating In: Eat better and less expensively by
cooking at home. Make it a friends and family event. Get your kids
involved. Bonus: You can have that extra drink without worrying about
getting busted for driving under the influence. Also: buy day-old bread
at the best bakery in town and freeze it. Eat oatmeal, because it's the
most cost-effective breakfast food. Get a supermarket "club card" and
buy food on special. Play the game of trying to see how much of a
discount can be saved off the total food bill.
Clothes:
When you buy something new donate something used to charity. Buy
traditional clothes, but wait for the off-season to acquire them. Go
for high quality - not high price. Buy vintage clothing and avoid logo
clothing and keep people guessing who the designer might be. Hint:
There shouldn't be one![For more, read: "Juggling Your Money in the Recession."]
Consumer Electronics:
Buy low-end gear that has the basic functionality of the more expensive
stuff. Don't be the first to buy new technology. Wait at least one
lifecycle so the bugs are worked out. Buy refurbished electronics
whenever possible.
Computers: Buy more mainstream
computers with proven technology. Select higher capacity hard drives, a
decent amount of RAM (the memory that the program runs in) and a cost
effective processor. Super fast doesn't always equal super
good...unless you are building airplanes or bridges. Laptops are a good
compromise between desktops and netbooks. Don't go through the pain of
upgrading operating systems on existing computers, it's not time
efficient and you will probably go insane trying.
Going green:
Being green and frugal go hand-in-hand. Yet frugal millionaires don't
readily fall for the trendy green hype machine. They typically buy
green if it helps the environment and lowers their costs. They look at
the timeframe when a product can pay for itself. They do use compact
fluorescent lighting, turn off lights and equipment that isn't being
used, monitor AC and heat usage (with programmable thermostats), drive
efficiently, live in "right-sized" homes and turn off the water when
they aren't brushing their teeth or washing dishes. Because they have
trained themselves to not waste money they won't waste anything else
either. They get into good habits and keep them going. You can, too.
Copyright 2008 U.S.News & World Report, L.P
http://finance.yahoo.com/news/How-to-Spend-Like-a-Frugal-usnews-15357371.html
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