I grew up as a child of one of the most frugal people on the planet. Not kidding! I washed my hair with dish soap (SO not pretty — don’t try that one!) to save a few pennies a week, wore holey (not holy, ha, ha!) hand-me-down underwear and often had to drown my dinner in catsup to be able to choke it down. I’m not advocating those things. You can take frugality too far. You can even take it WAY too far! Like, to-the-moon-and-back too far.


Seriously, I had a huge complex about my insanely frizzy hair. Nobody I knew had hair quite like mine. Some days I just wanted the earth to swallow me up rather than walking my woolly lion’s mane into school and pretending it didn’t bother me. Middle school was the pits — all because of my hideous hair.


Then one day I caught my dad refilling the shampoo bottle with liquid dishwashing detergent. Detergent?! All of those harsh chemicals?! No wonder! I started buying my own shampoo with my babysitting money and I even splurged on conditioner. It took months to mitigate the damage, but my hair started laying down on my head, same as the other girls. A few pennies savings wasn’t worth all that.

You’d think I’d swing the opposite way and go overboard buying beauty products galore. Nope! I actually really admire my dad and have adopted his frugal mindset, within reason.I’m never going to combine every leftover in the fridge (including frosting, yogurt, pancakes, pickles, kidney beans and every single other thing) into a ‘stew’ with a dozen eggs to make it all stick together. We ate that almost every Sunday and it was as gross as it sounds. My dad would always plop a gigantic bottle of catsup on the table alongside the ‘refrigerator stew’ and tell us to take it or leave it. I think we probably consumed enough catsup to negate any possible savings.And I buy all eight of my kids new underwear and socks every year. Oh, the guilt as I approach the checkout totaling up the cost in my head. I ignore that voice in my head, however, and just make the purchase, because underwear should cover ALL the parts and not be 80 percent holes.

Despite recklessly splurging on intact underwear, real shampoo and nutritious cooking ingredients, I consider myself a master at frugality. Because of my parents good example and the mindset they instilled in me, the only debt we have is our mortgage, which we plan to pay off soon. We pay cash for braces, college educations and vehicles, and we have a large emergency fund. Frugality has enabled us to travel frequently, give our children music lessons and other valuable experiences and allowed me to stay home with my children and homeschool them. For a family of ten we live astonishingly well off one salary.

I’m not a billionaire, but I know several immensely wealthy people. I can’t say for sure whether they are millionaires or billionaires, because they don’t talk about their money. Impressing people is the furthest thing from their minds. They do help people generously, but they don’t trumpet their good deeds. In fact, the only reason I’m aware of their wealth is that I know the value of the businesses and real estate they own. They live in nice but modest homes, drive nice but practical and older-model vehicles. They wear nice clothing, but aren’t concerned with the brands, and scoff at paying hundreds of dollars for a handbag. They actually live a lot like me — frugally!

They are truly happy and have financial peace because first, they have no debt and second, they have savings, assets and income more than sufficient for their needs. That peace is worth far more than any designer handbag!

The way billionaires live on TV is bogus. I know that there are some movie stars and other immensely wealthy individuals who do party hearty and live life out-of-control. Many of them end up in rehab, divorced multiple times, with crazy, messed-up families. Lots of them lose their entire fortunes.

70 percent of lottery winners end up in bankruptcy. Lottery winners are more likely to declare bankruptcy within three to five years than the average American. What’s more, studies have shown that winning the lottery does not improve your health or well-being.

Jack Whittaker, who won $315 million in a lottery in West Virginia in 2002, told Time, “I wish that we had torn the ticket up.” Since winning, Whittaker’s daughter and granddaughter died due to drug overdoses.

 Just eight months after winning, he was robbed of $545,000. “I just don’t like Jack Whittaker. I don’t like the hard heart I’ve got,” he said. “I don’t like what I’ve become.”

That is not what we aspire to.

Living frugally and saving money really comes down to implementing daily habits. The following nine habits will help you to accumulate wealth. Even better, though, these habits will help you to maintain that wealth, and not at the expense of your family, your health and your happiness.



Billionaires use budgets

Budgeting makes some folks cringe, but wealthy people know that having a budget keeps you in control of your money!

Knowing where each dollar is going and having a good sense of how you’re spending will help you to be more intentional and less impulsive with your money! Setting limits on categories helps you to learn to better discern your wants from your needs, so that you can decrease spending in less important categories and divert those funds to categories you probably previously never felt you could afford.

For example, because I have a long-term plan (a budget) for family vacations and I know I want to take all 11 of us to China for a month next year, I can total up the cost, break it into twelve equal increments and figure out how to save one of those increments each month. If I spend less on groceries and clothing, I can transfer that amount to my vacation savings. It makes it really easy to see potato chips and other treats as budget busters — possibly preventing my trip — instead of desirable.

My budget feels like such a blessing to me! I’m able to outline all of my needs, a few wants (which feel like huge, fun splurges because I only indulge infrequently) and save the rest for large things that I really want. My budget is like my map to abundance, freedom, peace and the security of knowing I never have to worry about money!

Get out of debt; eliminate debt


Billionaires spend less than they earn

Many people in our culture live above their means which is why they are drowning in debt. The reason for this is usually pride. Those people mistakenly base their self-worth on possessions. Or they feel entitled to the same luxuries they see their neighbors enjoying. They don’t realize that those ‘things’ their neighbors have are like chains enslaving them to their debtors. If they actually looked like chains of bondage, rather than a fancy new TV or vehicle, would they be as appealing? Nevertheless, that’s exactly what they are.

Get out of debt; eliminate debtLiving below your means is actually SO simple and free-ing. Don’t spend more than you make! In fact, make savings a priority in your budget. Instead of paying a debtor and making him rich, pay yourself (first!) and make yourself rich. We’ll talk about the value of compound interest below. We pay 10% tithing first, to God, then we pay 10% to ourselves.

Keep track of everything you spend. Small things add up quickly and can overthrow your long-term goals when you aren’t paying attention. Billionaires pay meticulous attention to all of the details when it comes to finances.

One of the most effective ways to beef up your savings and naturally live below your means is to set up a certain amount from each paycheck to go straight to your savings account. If you’re just starting out it can be as little as $20 per check. Chances are you won’t miss it, so it’s a really painless way to save. Increase this number each time you get a raise or pay off a bill and you will be saving hundreds each month in no time!


Billionaires have learned the art of self-discipline

In other words, they’ve learned how to tell themselves “no”.

In today’s instant gratification society that can be a tough habit to cultivate, especially for the generation just entering college, who have never known otherwise. The convenience of online shopping, coupled with fast, free shipping has made it far too easy to gratify every impulse. You just add whatever you want to your online shopping cart, pay for it with a credit card, check out and it’s on its way.

Hungry? Call almost any place, read off your credit card number, and they’ll deliver whatever sounds yummy within a few minutes. The ease and convenience of buying stuff has lulled people into a lack of discipline regarding their purchases.

Wealthy people work hard to exercise and practice that discipline, though, considering whether the desired item is a need or a want, and then further considering whether the purchase is in keeping with their ultimate, long-term financial goals. And then they wisely make their purchases.


Billionaires do not go into debt

Probably the single biggest barrier to wealth is debt! The indebted are slaves to their lenders. Every purchase made on credit enslaves you to a lender.

Technically, billionaires might use credit cards because they want to take advantage of cashback bonuses or other perks, but they pay them off in full every month and never carry a balance. This is because they truly understand money. They know that if they were to purchase a $1k TV on credit, and just made minimum payments, that not only would the TV be obsolete, dead and gone before they finally paid it off, but that they would ultimately have paid more than triple what it should have cost.

Nobody ever became wealthy by paying hundreds of dollars of credit card interest every month.  Rather, they became wealthy by living debt-free, paying in cash and only purchasing what they could afford!

Related Reading: Conquer Debt Once and For All

Billionaires also don’t talk about ‘good debt’ vs. ‘bad debt’. They don’t keep mortgages around for tax breaks or  because they’re considered good debt. They value the peace and security of being completely debt-free above potential tax breaks or advice from financial advisors.


Billionaires pay themselves first

Instead of making payments to debt, they make payments to themselves in the form of investments and savings. The most successful financial guru’s decide an amount to invest, and actually incorporate automated payments to themselves into their budgets. Treat your savings just as you would any other bill.

Consistency is crucial!

Frugal habits of the wealthy will help you to live like a billionaire Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest. This basically means that your money will grow exponentially, with zero work from you. Historically, the 30-yr rate of return with the S & P has been 11%.

Compound interest can make you wealthy!  And every year that you’re not investing you’re literally losing money! The rate of inflation is 3% per year, which you will lose by just keeping cash hidden under your mattress. But you are also losing what you could have earned by investing. The wealthy invest consistently and make their money work for them!

By developing a habit of paying yourself first from every paycheck, without fail, you get used to learning to live on your post-savings income.

This ‘set it and forget it’ attitude will help you spend less and grow your savings effortlessly, and before you know it you’ll have a nice-sized pile of cash with which to cover emergencies, pay cash for a large purchase, or even retire altogether.

Certain investments are considered safer than others. Most investments with high rates of return carry higher risk. We’ll talk about risk later, though. You’ll need to research the best ways to invest your money. Just remember that a typical savings account yields around 0.06% interest, while inflation averages 3% yearly, so you are losing 2.94% annually by just keeping your money in a savings account.


Billionaires have a passive income stream

All billionaires earn passive income.  This means they make money even when not actively working.

This is important because everyone just gets 24 hours a day.  When you work at a regular job, even if you work 12 or 16 hour days, you can only earn a finite amount of money because you only have a finite amount of time to work. Billionaires have found ways to stop trading their time for money.

Ownership of an idea or product is a way to earn passive income. You write a book, self-publish it on Amazon, and people all over the world can purchase and download your book, even while you’re writing the next one (or sleeping!) for the rest of your life.

Business ownership is another way to earn passive income. Maybe you make a great salary as a dentist, but then you decide to add a couple more dentists to your practice. You have to add more equipment to your building, and now you have to worry about salaries and benefits and business-owner-type stuff for a larger practice. But you can just work a couple of days a week, or take an extended leave, because you are making money from the dental practice even when you aren’t physically there.

Real estate is a very popular way to make passive income. Passive income is not necessarily easy, nor does it happen without a large upfront investment, usually of both money and work. But it enables the exponential growth of funds that is required for wealth to accumulate sufficiently.



Billionaires spend wisely and intentionally

Wealthy people work hard to spend their money conscientiously. They buy used items instead of new when it makes sense. For example, they usually  purchase gently used cars because they understand that just driving a new car off the lot gouges it’s value significantly, and they consciously decide not to take that financial hit.

They shop sales, borrow items they will only use once, and they meal-plan and shop strategically for groceries. If there are any coupons, deals, specials or email offers, they will know about them. They check prices and reviews and consumer reports and make sure that their purchase is a great value.

Related Reading: 7 Secrets for Cutting Your Grocery Budget in Half

Wealthy people realize that value takes into consideration more than just the price and they don’t sacrifice quality when it comes to large purchases they plan to own long-term. For example, we just replaced our roof and chose to buy the most expensive and durable shingles available, because they will be more durable and ultimately cost us less than replacing shingles again in thirty years.

Speaking of homes, you will rarely see a very wealthy person buy a home that costs a significant portion of their net worth. Even though homes appreciate in value and are considered an asset, most wealthy people are quite happy living in a comfortable house equal to a small amount of their available means.

Billionaire Warren Buffett, for example, still lives in the same house he purchased for only $31,500 in 1958!  Don’t get me wrong, it’s a very nice home, but with a net worth estimated around 80 billion dollars, he could certainly afford to live in something much more elaborate!


Billionaires have financial safeguards

They have retirement funds, emergency funds, savings accounts, and college and wedding funds for their children and grandchildren. They diversify their investments and invest in real assets, like gold and precious metals, to minimize risks. They understand that financial security is not just about the here and now, it is also about the future, so they put these safeguards in place to protect them from the aftermath of most foreseeable disasters.

Billionaires take risks

Exactly 27 of the top 100 billionaires were lucky and inherited wealth, according to Bloomberg, but the other 73 clawed their way to the their current positions. They are self-made billionaires, and they have one strategy in common: they each took enormous risks. According to Catherine Clifford, “There is no careful, cautious path that leads from humble beginnings to Bloomberg’s list of the richest people in the world.”

Jeff Bezos had a secure job at a hedge fund when he came up with the idea for Amazon. Still, he quit it, set up in his parents’ garage, and poured his savings into making the Everything Store a reality. And it worked. Today Amazon is valued at over 700 billion. Jeff Bezos believes so strongly in cultivating a culture of initiative and enterprise at Amazon that he created a “Just Do It” award, conferred to both employees who try and succeed, as well as those who try and fail. The core message is that taking a risk is preferable to being too fearful to move.

Risks are worth taking. You may fail, but you will never win if you don’t try.

Mark Zuckerburg, founder of facebook, says:

“The biggest risk is not taking any risk…In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

Frugal habits of wealthy people; live like a billionaire millionaire


I know that this principle is true, but I really struggle with it, which is why I placed it at the very end of my post. In my world, with eight kids who I absolutely refuse to let become homeless or hungry, risks must be minimal. I only allow myself to risk money I can afford to lose. Investments are as risky as I get right now, and I even play my investments pretty safe.

This risk aversion of mine (among other traits) makes me much less likely to ever be as rich as Jeff Bezos or Elon Musk, but I’m okay with that. For now. My financial plans are all being realized, even as my risks are minimized.

My dad was never a big risk-taker, either. But he paid off our family home in less than ten years, paid cash for everything, retired early and he and my mom have had some amazing experiences. Plus, he has peace of mind, financial security and a lot of fun doing all the things he wants to do instead of things he has to do.

Two of my brothers run several business together (they got all the risk-taking genes in our family) and my dad has had so much fun working on myriad projects with them. He also makes beautiful sculptures with his wood lathe and he helps all of us kids (there are 7 of us) with our home-improvement projects. He may not enjoy that, but we kids sure appreciate it!

My parents have also been able to generously help each of their kids financially at different times, and they have had fun providing their grandchildren with opportunities that we, their parents, could not have afforded otherwise. Additionally, they provide a fun, family gathering every year. One winter my mom rented a huge cabin and snowmobiles for the entire family. One summer she rented a large cabin at a lake. We’ve traveled far and wide together as a large, extended family of 37 people, and my kids’ cousins are their best friends.

Now that is what I aspire to in life. That is my definition of wealthy.

You have your own dreams and ambitions, and your plans will look different from mine. You’ll also find your own style for implementing these habits. As long as you do implement them, though, you will experience great financial success.





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  1. Great article enjoyed it these tips are simple but timeless.

  2. I have a friend who is quite wealthy and I’m amazed that she always says she’s on a budget. But this all makes so much sense!

  3. I particularly like your tip about treating savings like a bill. I’d never thought of that before! I like to think I follow a lot of these tips anyways (specifically budgeting), so that’s a nice way to think about it now.

  4. Love this post! This is such great advice. Spending less than you earn and not going into debt are my favorite tips!

  5. We have been working on our financial habits this year, with a goal of becoming debt-free. I would love to be able to do a large family vacation each year. That is one of my own goals. I appreciate the advice you have shared. A frugal mindset is very important, especially when you have a large family. I have seen both extremes.

  6. WOW, so many great tips to take in. I’m pinning this to read through again with my husband and refer back to later. We started a budget a little over a year ago, and it has been amazing! Since then, we have been working on optimizing our finances and there are some things mentioned in this post that we need to start implementing, thanks for sharing!.

  7. This is an area of constant struggle for me! I’m making small improvements but frugality has never been a strong point. Thank you for sharing these helpful principles!

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