Spending money on expensive clothing, cars and gadgets and flaunting your wealth are fashionable activities in today’s world. Listen to pop music and you’ll hear lyrics like “I’m broke, but I’m ballin’”, suggesting that spending money frivolously is a glorified act; artists like Jay-Z and Pitbull regularly brag about their wealth in their music.
Combined with easy access to cheap credit and a “live for today” approach to life, it’s easy to see why people can struggle to save money.
Yet, some of the wealthiest people in the world refuse to live this way. There are plenty of billionaires who, despite their almost unlimited supply of money, continue to live frugally. By looking at the things that they do, we can find easy ways in which to cut back on our spending.
Warren Buffett – Use Coupons
Warren Buffett, one of the world’s most famous investors, has a net worth of around $76 billion, almost double that of Elon Musk but around half of Jeff Bezos. He built this wealth by buying shares in successful companies and holding onto them over a long period of time.
While he was still building his wealth, he would only eat cheese sandwiches and spend as little cash as possible. Everything he saved, he used to buy stocks and shares.
Even today, Warren Buffett, a man with personal wealth greater than the GDP of 122 countries (including Venezuela, Luxembourg, Croatia, Bulgaria, Estonia, and Iceland), still buys things with coupons. He once even famously bought lunch for Bill Gates from McDonald’s while using coupons.
We can all learn from Buffett, using coupons and other promotions to save money wherever we can. You’d be surprised how often you can find useful coupons, vouchers and promotions. Manufacturers of consumer goods often use them to promote their new products or to encourage consumers to switch from another brand.
Many restaurant chains offer discounts on certain dishes or at certain times of the day; you can often find these listed online. Several UK banks will give you free cinema vouchers if you have a current account with them, while those looking to have a flutter on events like the Grand National could use free bets from bookmakers so you don’t spend your own money.
Duncan Bannatyne – Don’t Spend Money to Impress Others
Famous for his chain of leisure centres and his appearances on the BBC show, Dragons Den, Duncan Bannatyne is a Scottish entrepreneur who has had a string of businesses throughout his career.
In his book, Anyone Can Do It, Bannatyne described the time he was going through the process of listing his company on the stock exchange. He said that when you do this, you must endure a lot of long meetings over dinner that you’re expected to pay for.
He described his frustration at the growing number of people tagging along for a free meal, so he decided he would save money by taking them to McDonald’s. It upset and confused some of the consultants and bankers working on the listing, but it showed them that he wasn’t prepared to waste his money to make them like him.
Today, many people get caught up in “keeping up with the Joneses”, spending money just to have the same expensive cars, holidays, clothes, and technology. We can learn from Bannatyne by not caring what others think and not wasting money to impress others.
Alfred Morris – Don’t Waste Money on an Expensive Car
Cheap credit and easy-to-acquire lease deals mean that owning a luxury car is now easier than ever. Decades ago, your first car was usually a second-hand old banger that was cheap to buy and cheap to run. Luxury cars like those from German brands Mercedes, Audi and BMW were only accessible to older and wealthier people.
Today though, visit any office car park in Britain and you’ll see rows of these cars lined up in the car park. This isn’t because everyone is now paid much more, it’s just that it’s easier to acquire these cars on credit.
They’re a huge expense though and will be a drag on your ability to save and build your net worth. Alfred Morris, the former running back for the Dallas Cowboys and Arizona Cardinals, earned several million dollars each year while playing in the NFL.
Yet, Morris was still driving around his 1991 Mazda 626 that he bought for $2 while he was still at university. Granted Mazda refurbished the car for him, free of charge, in 2013, giving him a new engine, interior and even GPS, but since he didn’t pay for it, he’s still saving money.
Morris could buy a new car, but while the current one still works, why waste the cash?
For more tip read Tips to Encourage Kids to Become Next Generation Entrepreneurs
