A simple lifestyle is key when trying to build wealth. The best example that you could model after is Warren Buffett. Buffett is the most successful investor to ever live. As of December 2020, he is the sixth-richest person in the world with a net worth of $87.4 billion. Even with all his wealth, Buffett still lives in the same house that he bought in 1958 for $31,500, drives a simple 2014 Cadillac XTS that was retailed at around $45,000 and eats at McDonald’s almost every day.
Being frugal with small purchases
Bold TV host Philip Michael watches the small money going out in his budget. While it’s important to be frugal with big-ticket items, it is equally if not more important to be frugal with small-ticket items such as groceries, clothing and accessories. When you go shopping for clothes or for groceries, try to look for sales and deals. The probability of you affording these items is high, but by doing this, you will build good habits and a good financial mindset. So, when it comes to big purchases, you’ll have a better understanding of how you should spend your money.
When the savings are worth the deal
At the same time, you’ll be able to gauge when it’s worth saving your money or not when purchasing something. For example, if you can save $5 off a $10 item, you would do everything you can to get that deal because the money you would be saving is 50% of the original price. However, if you are buying a car and one car costs $25,000 and the better car costs $25,005, then trying to save that extra $5 is not worth it. Five dollars is 0.02% of $25,000 that you would be saving if you bought the cheaper car. We can’t all be Warren Buffet, but we can learn how to better budget our own finances. How are you building your wealth?
For more on budgeting, check this out.