This guest post comes from Jeff Lehman, author of The Frugal Millionaires.
I saw this article as I was perusing through yahoo. Because I like to think of myself as being frugal, I read the article with interest and decided to share it with my readers along with my thoughts at least as they related to me.
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).
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.
Since taking Crown Ministries and becoming debt free, my wife and I have made it a habit of always buying used from a reputable dealer and then drive the cars forever.
Eating Out: Bring half of a meal home to eat later (this also saves the waistline). Eat at happy hours. Value food quality over expensive ambiance.
We go for the ambiance about once a year... the rest of the time, we look for the best meal for the lowest price.
Eating In: Eat better and less expensively by cooking at home. Make it a friends and family event. Get your kids involved. 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.
One thing I do several times a week is to stop in at one of the local supermarkets and check out the meat section. Quite often, meat and chicken which is about to expire is discounted 40-50%. I purchase what I need and cook it that night.
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!
I rarely buy clothes anymore at any retail store. I have purchased some very nice, almost new golf shirts at yard sales for a few dollars, even selling some to pay for the shirts and keeping two that were basically free. I never pay retail for my running shoes either; I prefer New Balance and purchase last year's models at an online discount New Balance outlet that offers free shipping.
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 life cycle so the bugs are worked out. Buy refurbished electronics whenever possible.
Ok, this is one I don't do as much as the others. I do try to check on either Ebay or Craigslist though as again, I just hate paying retail for anything.
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.
I just recently purchased a Dell computer. It took me about 2 weeks to find one on Ebay that met the requirements I wanted. I was not concerned with the size of the hard drive (I never come close to filling one up) but I was most interested in RAM (4gb) and the wireless capabilities. I got it for about $100 less then what I would have paid on the Dell website.
Going greenn: 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 time frame 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.
I have a confession to make; I am not a very "green" person. My wife is great about keeping me in line as far as recycling stuff goes.
Dave Ramsey says, "If you want to be a millionaire, figure out what millionaires do and start doing it. Then, you'll get to be one." It doesn't happen overnight but by starting now, it will be just that much sooner when you can reach the first million.
0 comments:
Post a Comment