Being rich and staying rich are two completely different things. Thankfully, wealthy people are always looking for ways to spend their money more wisely. And one way to do that is to find ways to save more.
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“Consumers are getting smarter. They know that if they want to get the most out of their money, they need to save and invest,” said Erika Kullberg, a lawyer and personal finance expert. Ta.
Here are some new ways wealthy people are saving money and choosing to spend it differently.
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cancel gym membership
“A trend I've noticed lately is that more and more 'wealthy' people are ditching their gym memberships,” says Jake, personal finance expert and CEO of Debthammer.・Mr. Hill says. “Many people, regardless of their wealth, are underutilizing their gym membership to the point where it actually benefits them. ”
But he noted that wealthy people can often afford alternatives to gym memberships.
“At the same time, wealthy people are more likely to use gym equipment at home and do not need a gym membership.”
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Choose a more affordable vacation location
While wealthy individuals traditionally enjoy numerous overseas holidays each year, Spokeo co-founder and CEO Harrison Tan says there is now a clear shift towards more cost-effective options. He said there is a trend.
For example, wealthy people are starting to choose local locations more often than luxury trips abroad.
Tan explained that this frugality indicates a prudent approach, as wealthy people seek to reduce financial risks and protect their assets.
Recognizing that long trips can have a big impact on savings is a big motivator for them, and ultimately plays a big role in considering closer destinations, he said. Ta.
“This shift reflects a broader trend among wealthy individuals to prioritize financial prudence in the face of economic uncertainty, and signals a readiness to adapt. ”
reduce spending on luxury goods
“Recently, I've been loving the TikTok videos where people share luxury items they're cutting back on to save money,” Kullberg said. “What I'm seeing is that many wealthy people are cutting out all sorts of recurring expenses from their budgets in order to become more financially progressive, and that's a luxury, not a necessity. ”
She said this trend is especially prevalent among wealthy women.
“I see a lot of people dropping their regular manicure habits. Beauty treatments are so expensive these days, and when you factor in tips on top of that, many consumers think professional manicures and pedicures are worth the money.” It's no wonder that there isn't one.”
Credit Summit CEO Carter Seuthe similarly observes a change in spending habits.
“Over the past year or so, we've seen many high-net-worth individuals start cutting back on discretionary and convenience expenses,” he said. “One big example of this is the reduction or complete elimination of cleaning services and dog walking services.”
entertainment savings
“I've witnessed a similar attitude when it comes to entertainment subscription services,” Kullberg said.
Many consumers choose to keep one or two of their favorite subscriptions, but they no longer have access to all of those services, he added.
“I think these are both great examples of lifestyle changes that can make a really big difference. If regular but unnecessary expenses are taking up space in your budget, give yourself more cash. You're moving money away from a place that could help you,” she said. “Once you've cut spending from your budget, allocate that cash to a high-yield savings account and watch your money grow.”
Choose smart technology over home renovations
“We've also noticed that more wealthy people are refraining from remodeling or renovating their homes,” Suess says. “Alternatively, you could focus on small, cost-effective projects to improve your home. Financial instability and inflation affect everyone, including the wealthy, but it's important to remember that financial instability and inflation affect everyone, including the wealthy, but it's important to remember that financial instability and inflation affect everyone, including the wealthy. By cutting off some of the excess, you can keep more money in your pocket.
Experts said wealthy people are more likely to invest in smart home technology, which can reduce costs and provide better home services in the long term, rather than invest in home renovations.
With a smart home system, you can, for example, control the temperature in your home before you get home. Especially in winter, it is especially useful to return to a cozy and warm place. Solar panels can also help reduce long-term energy costs.
They focus on emergency savings
“Since the pandemic and the ensuing economic downturn, we high-net-worth individuals have realized that without an emergency fund, we too can struggle,” said Syed Lateef, business coach and CEO of SyedBNB.
“My own Airbnb business took a big hit during lockdown, but luckily I had solid business sense and an emergency fund to fall back on.”
Because of that experience, wealthy people are now actually focused on replenishing and expanding their emergency funds, he said.
“Honestly, it's hard to grow your wealth if you have to dip into investments or worse, use credit cards every time an unexpected expense arises,” he says.
“Wealthy people are very good at creating and maintaining emergency funds. Many financial advisors suggest keeping six months' worth of expenses easily accessible, like a savings account. But some of our millionaires go even further and save up to 25% of their money for emergencies.
They prioritize giving back.
Experts say wealthy people are becoming more conscious of saving money for charity and helping others.
“These days, I feel a greater sense of responsibility to give back,” Lateef said.
He said the coronavirus pandemic, climate change and the refugee crisis from Ukraine and the Middle East have highlighted the urgency and shortcomings of charitable giving.
“As a billionaire, I am personally involved in supporting communities in India and Pakistan by funding clean water wells through organizations such as the Tarkat Foundation and Human Concern International. Giving Back I am saving for this because I think it is important to do so. This spirit of philanthropy not only benefits those in need, but also helps me financially because I believe that generosity generates positive karma. It also helps you avoid difficulties.”
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This article originally appeared on GOBankingRates.com: 5 new things rich people are saving money to avoid becoming poor