We like to think that we are doing alright when it comes to saving money. After all, the formula is pretty simple, save more and spend less. However, it’s much easier said than done.
Believe it or not, our daily habits play a huge role in how we spend our money. To help you start saving more, here are four money-saving habits that frugal billionaires live by.
Control your urge to splurge
A common habit that most of these wealthy people practice is that they tend to spend less on materialistic luxuries. The founder and CEO of Facebook, Mark Zuckerberg (worth around $54.7 billion), drives inexpensive cars including an Acura TSX, a Volkswagen hatchback and a Honda Fit which are all valued under $30,000 each (about RM122,595).
Another great example is Slim Carlos Helu (worth around $58.8 billion) – the richest man in Mexico and 12th richest person in the world – reportedly doesn’t own any yachts or planes as he doesn’t believe in conspicuous consumption. While most of his money goes towards further investments, he does indulge in only two big luxuries, Cuban cigars and art collecting.
It makes perfect sense for you to indulge in your “wants” every now and then but do so sparingly. Try to set a budget to limit the amount of spending you do on things you don't really need as it'll definitely pay off in the long run.
Take the time to learn about the best investment and savings plan
If you’re new to the art of investments, it can be a little overwhelming. But it’s essential that you take the time to research and decide where you plan to invest. According to billionaire and legendary investor Warren Buffett (worth around $73.5 billion), he says, “Never invest in a business you cannot understand.”
Hence, make it a habit to explore different investments and saving plans out there every day. You should also understand the plans in-depth before putting aside a fixed amount to be invested monthly. To learn more about investments and saving plans, head on to our CIMB website.
Avoid lifestyle creep
Many of us make the habit of upgrading our lives with every little increase in income. Lifestyle creep, or lifestyle inflation, happens when you increase your standard of living in order to match your increased income. For example, upgrading your car and smartphone, or spending more lavishly when you don't need to.
Lifestyle creep usually happens gradually and sometimes make it hard for you to notice. But, take heed from the Ikea founder Ingvar Kamprad (worth around $58.7 billion), who lived a simple and modest lifestyle till he passed away in 2018 at the age of 91. Despite being one of the wealthiest people in the world, Kamprad used to fly economy class, drove the same Volvo for 20 years, stayed in cheap hotels and shopped mostly at flea markets.
As we achieve more in income and career, it's only natural to want to purchase the things we couldn't afford before. But it might be wise to practice the good habit of growing your savings and not lifestyle. Start today and forge the rich habit of Delayed Gratification, by putting off what you want today so that you can have something to fall back on in the future.
Spend on educating yourself for a wiser, finance savvy individual
Nicknamed Superman, Li Ka-Shing (worth around $35.3 billion) is revered as one of the most influential businessmen in Asia. The 35th richest person in the world advises that one should be generous when it comes to personal growth and encourages people to set aside an amount of money every month to buy books and attend training courses. He says, “When you buy the books, read them carefully and learn the lessons and strategies that are being taught in the book”.
It doesnt have to be just books too. Follow financial news, bloggers and writers on the many social media platforms out there (you can also read our tips!)
With the ever-changing financial landscapes, it's important to be up to date on the latest developments out there. You’ll also discover how this can affect your spending and saving strategy, whether for your business or personal finance.
Now that you’ve learned money-saving habits from these influential yet frugal billionaires, it’s time for you to put them into practice. It may be hard at first, but keep trying and you’ll soon make it a habit.
This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy among Malaysians. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve all our well-being. This, in turn, achieves CIMB’s purpose of advancing customers and society.