Published By: Entrepeneur
To be honest, there isn’t one sure-fire way to become rich. However, you can increase your chances by investing in things like stocks or real estate, planning for your future by saving for your retirement as soon as possible and having multiple streams of income. It also involves being careful with your spending by being frugal.
Want to see how it’s done? Start by following these ten tips.
1. Stop keeping up the Joneses and live below your means.
You know those neighbors or family members who constantly have a new car in the driveway of their McMansion, are on vacation in exotic lands, wear the latest fashions and eat at only the best restaurants in town? It may appear that they have it all. Here’s the thing. They don’t. And, if they’re like most Americans, they’re just one paycheck away from the street.
Instead of trying to keep with Joneses, follow the lead of wealthy individuals like Warren Buffett. He lives in the same house he purchased in 1958 for a mere $32,000 (which was a lot of money in 1958). He’s known for buying modestly priced vehicles every couple of years, such as a 2006 Cadillac that he auctioned off for charity. Buffett, despite being worth more than $74 billion, lives well below his means.
Related: 5 Frugal Habits of the World’s Richest People
2. Eliminate unnecessary expenses.
How much money do you spend at Starbucks each morning? How much have you paid in ATM fees this month? Why are you paying over $100 per month for a cable package when you rarely watch TV? In short, we all wasted countless amounts of dollars on unnecessary expenses or things that we don’t need.
Instead of buying coffee daily, buy a bag of Starbucks and make it home. Avoid ATM fees by only withdrawing money from machines that don’t have any fees or start transferring money through digital wallets. Cut the cord and pay around $10 for Netflix or Hulu.
The easiest place to start when determining which expenses to cut is by creating and sticking to a budget. This allows you to easily see where your money is going each month so that you can start trimming the fat, as well as help you accomplish any financial goals that you’re set..
3. Stop paying full-price.
Here’s another secret from the world’s wealthiest individuals? They never pay full price for anything. In fact, it’s been found that households with an average income of $100,000 or more use more coupons than households that earn under $35,000 annually?
Besides couponing, the rich are known for buying used items on Craigslist, eBay, or their local thrift shops.
You don’t necessarily have to become a jack-of-all-trades or even a master one particular area, but learning how to do some basic chores can save your a lot of cash in the long-run. I’m talking about everything from cooking dinner to changing the oil in your car to sewing to replacing an electrical outlet.
If this seems overwhelming, consider starting with food delivery services like Blue Apron, Hellofresh, Sun Basket or Home Chef. They sound you all the ingredients and step-by-step instructions on how to prepare the meals. It’s a foolproof way to learn how to cook nearly restaurant quality food. For home repairs, many of the big box home improvement stores like Home Depot have weekly workshops for free. And, there’s always turning to instructional videos on YouTube or asking someone who is familiar with these skills to teach you.
Related: Lifestyles of the Rich and Frugal: 7 Thrifty Millionaires and Billionaires
5. Reduce, reuse, recycle.
You’re probably familiar with the three R’s when it comes to the environment. But, they can also apply to frugal lifestyles.
Reduce the amount of time you’re in the shower and electricity that you’re using. Invest in gadgets like the Nest so that you’re wasting any heat or air conditioning when you’re not home. All of this will drop your electric, water and heating and cooling costs.
You can reuse those take-out containers instead of purchasing brand new Tupperware. These aren’t meant to last, but you can get some use out of them. Personally, I rescue cling wrap and aluminum foil when eating leftovers. I don’t reuse that same piece for each meal, but I get a couple of uses out of it.
When it comes to recycling, you can cash-in on your aluminum can, cardboard and broken appliances by taking them to scrap yards. You could also get clever and convert that busted dresser into a cabinet or table instead of buying a new piece of furniture.
6. Rent or sell the stuff you’re not using daily.
Do you have an extra bedroom? Rent it on Airbnb. If you have a garage, parking space or driveway, rent those out too. Heck, you can even rent out your car, bicycle, clothes and household items if you want to.
You can sell all the junk you’ll never use again on eBay, Craigslist, LetGo, a local thrift shop or have a yard sale.
Related: 8 Slow, Difficult Steps to Become a Millionaire
7. Be wise with credit cards.
Don’t use your credit card if you don’t have the money to pay off the balance. You’re going to end up paying hundreds, if not thousands, of dollars in interest.
Credit cards are not completely terrible. They’re useful when building your credit, which you’ll need if you want to start a business or purchase a home. They also come with cash back and rewards, like free hotel visits or airlines. Just be cautious that you don’t put yourself in credit card debt.
Here are a few payments statistics that might be interesting!
8. Look for freebies.
It’s not too good to be true! There really are a lot of free things out if you do a little bit of research. Most communities have free activities for families on weekends. You may be able to get free, or low-cost, haircuts, dental care or oil changes from local tech or vocational schools.
9. It’s all right to splurge now and then.
Boone Pickens has said, “I don’t go cheap on anything, but I’m not a shopper. If I want something, I look at it, decide what it is, but it will usually be the best product. I’ve got a pair of loafers that I still wear that I got in 1957.”
There’s a misconception that being frugal means that you’re cheap. In fact, most frugal individuals splurge occasionally. For example, I’ve purchased a Tesla. Why? It’s a quality vehicle that’s going to last for years. I’m eliminating the cost of gas and, most importantly, I could afford it without putting myself in debt.
10. Side hustle and save.
Jay Leno reportedly saved every dime while hosting The Tonight Show. He lived off of endorsements and live appearances. “You know, when I was a kid,” Leno told fellow comedian Jerry Seinfeld on Comedians in Cars Getting Coffee, “I always had two jobs, and I would bank one, and I’d spend the other. Then when I got ‘The Tonight Show’ I just continued to do that.”
There are hundreds of ways for you to side hustle these days, such as freelancing, finding a part-time job, or selling products online. Instead of spending that cash on something frivolous, set that money aside into an emergency fund, your retirement, or to pay off any debt, like a credit card or student loan.
Related: 4 Business Principles Learned Getting Rich in Real Estate by Age 30
11. Stop falling for “get rich quick” schemes.
I hate to be the bearer of bad news, but there is no such thing as getting rich quickly. According to studies conducted by Thomas C. Corley, “16 percent of the wealthy gamble on sports at least once a week versus 52 percent of the poor.” Additionally, only “9 percent of the wealthy play the lottery every week versus 77 percent of the poor.”
Instead of wasting your hard-earned money attempting to accumulate a significant amount of wealth in a short period, invest it wisely and place it into a savings account. You may not earn that jackpot amount, but at least you’re guaranteed to be increasing your wealth. Remember, becoming a millionaire takes discipline and patience.