7 Money Savings Tips Adopted by Self-Made Millionaires

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Tip #1 Avoid Spontaneous and Emotional Purchases – Never buy anything on impulse or on emotion. It is almost always the wrong thing to do. That spontaneous or emotional purchase will lose its luster after only a few weeks. Then you’re stuck with something you don’t need and that does not generate any income.

Tip #2 Avoid Want Spending – Want Spenders spend more money than they make on their wants. They surrender to instant gratification, eschewing saving in order to buy things they want now: 60 inch TVs, nice vacations, expensive cars, bigger homes and jewelry. They also spend too much money at bars and restaurants. Worse, they incur debt in order to finance their standard of living. Want Spenders have been brainwashed by advertisers and a consumerist society into buying things they do not need.

Tip #3 Never Gamble

Tip #4 Same House, Same Spouse, Same Car:

• Same House – Do not upsize or supersize your home. The self-made millionaires in my Rich Habits Study stayed in their home, even after their children left     the nest. Don’t sell your home until you are ready to retire or until death.
• Same Spouse – Divorce is financial suicide. Divorce sets you back 10 years or more.
• Same Car – Purchase your automobiles and drive them for ten years or more. Goal should be to reach 200,000 miles or more on each car  

Tip #5 Be Frugal, Not Cheap – Being Frugal is very different from being Cheap. Frugal people focus on getting the highest quality product or service and then bargain shop to find the lowest price. Cheap people focus on the price and not the quality of products and services.

Tip #6 – Spending Guidelines – Below is some spending data I uncovered from interviewing 177 Self-Made Millionaires for my Rich Habits Study:

• 8% shopped at Goodwill stores
• 20% used coupons
• 64% said they lived in a modest, middle-class home
• 28% mowed their own lawn to save money
• 44% only purchased used cars. These were typically cars coming off of a two or three-year lease.
• 41% spent less than $3,000 on their annual vacation
• Spend no more than 25% of your Annual Net Pay on Housing Costs
• Spend no more than 5% of your Annual Net Pay on Car Costs

Tip #7 – 100 Day Credit Card Challenge

Using credit cards is so easy. But credit card use can easily get out of control. If you rely on credit cards to pay for ordinary living expenses, that means you are living beyond your means.

For 100 days try to go without using credit cards. Having to use cash or your ATM card forces spending awareness and restricts how much you can spend.     

Tom Corley

Tom Corley is an accountant, financial planner, public speaker, and author of the books “Effort-Less Wealth: Smart Money Habits At Every Stage of Your Life” and “RichKids: How to Raise Our Children to Be Happy and Successful in Life“.  Corley’s work has appeared on CNN, USA Today, The Huffington Post, SUCCESS Magazine, and many other media outlets and podcasts in the U.S. and 27 other countries. Tom is a frequent contributor to Business Insider and CNBC.