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All Contents © 2018The Kiplinger Washington Editors
By Andrea Browne Taylor, Online Editor
| April 6, 2018
Becoming wealthy and staying that way takes a certain level of discipline. Sure, an occasional splurge won't put you in the poor house, but frequent frivolous spending on things that aren't necessities can quickly erode hard-earned gains.
The frugal habits necessary to achieve financial success and maintain it are often simple lessons learned early on. In this slide show, meet 10 entrepreneurs, business leaders and famous faces, including Google's David Cheriton, former professional boxer Laila Ali, the "Oracle of Omaha" Warren Buffett and retired NASCAR racer Danica Patrick, whose modest lifestyle habits -- from clipping coupons to clipping their own hair -- has helped them maintain vast fortunes.
As Knight Kiplinger wrote in his classic column The Invisible Rich, "the biggest barrier to becoming rich is living like you're rich before you are."
Learn more about the cost-cutting moves that help make these successful millionaires and billionaires who they are.
NOTE: Net-worth estimates are as of March 2018 and were sourced from Forbes.com and CelebrityNetWorth.com.
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Photo by HHP/Harold Hinson
Estimated net worth: $60 million
How she struck it rich: NASCAR driver
Frugal habit: Makes her own meals while traveling
The recently retired NASCAR driver keeps costs in check even when she's on the road by cooking for herself and told us it's the most frugal thing she does. "I love to cook. While it can sometimes be hard to have all the right ingredients when I'm on the road, I love stopping by local farmers markets and cooking as often as I can. The food I make is much healthier than always eating out at restaurants, plus it's a great way to save money," Patrick says.
She's right. Preparing your own meals can help you build up your savings over time. For example, if you spend $8 buying lunch from a restaurant every day, you can save $60 a month and $720 a year by bringing your own lunch made using ingredients that cost only $5.
Photo by Allen Cooley
Estimated net worth: $10 million
How she struck it rich: Professional boxer and entrepreneur
Frugal habit: Skips the hair salon and styles her own hair
Ali, the daughter of legendary boxer Muhammad Ali, is now the host of a popular podcast, a cookbook author and an entrepreneur with her own hair styling product line after an undefeated boxing career. But long before all of that, she was operating her own nail-salon business at age 18, and now she runs a salon of different sorts from her own home. Instead of shelling out cash for a professional blowout every week, Ali prefers to style her own hair, as well as her 6-year-old daughter Sydney's hair. "My time is precious. I don't have time to drive an hour to a salon and then sit there for a couple more hours getting my hair done. It's really not that serious or important to me," she told Kiplinger.com.
Ali is saving big. The average cost of a trip to the hair salon in the Los Angeles metro area where she resides is $61.
Estimated net worth: $250 million
How he struck it rich: Comes from a wealthy family and co-founded the private equity firm Bain Capital
Frugal habit: Buys golf clubs at Kmart
The former GOP presidential candidate has quite a few surprising, budget-conscious spending habits -- several of which were revealed in a 2011 New York Times article. They include using JetBlue to snag cheap airfare, tackling home renovations himself and buying his golf equipment at Kmart. You heard it right. Romney, who is worth about a quarter-billion dollars, is always on the hunt for "blue light specials." A family friend was quoted in the same article saying that one of Romney's mantras is, "Just because you can afford something doesn't mean you should buy it."
While on the campaign trail, Romney promised similar frugality within the federal government had he been elected. This included capping government spending at 20% of gross domestic product. That would have involved spending cuts of about $500 billion per year that would have started in 2016.
Martin Dee, The Univ. of British Columbia
Estimated net worth: $5.9 billion
How he struck it rich: An early private investor in Google
Frugal habit: When having dinner at a nice restaurant, he saves half of his meal for the next day.
In addition to knowing how to make a good meal last, the Stanford University professor -- who played an integral role in the founding of Google -- has also been cutting his own hair for more than 20 years and drives a 1986 Volkswagen Vanagon.
Cheriton's been pinching pennies his whole life. "Many of my frugal habits come from my parents, who grew up during the Depression and passed along the same careful habits," he told Kiplinger.com. "My rule is never spend in a way that I can't explain to my parents without apology or embarrassment. It's kind of a personal version of 'never do anything you don't want to see presented on 60 Minutes.'"
Courtesy of T. Boone Pickens
Estimated net worth: $950 million
How he struck it rich: Oil!
Frugal habit: Buys new business clothes only once every five years
Pickens has 60 years' worth of professional achievements, including growing his first company, Mesa Petroleum, into a $2 billion business and an infamous 1985 Time magazine cover. But these days, Pickens is almost as well known for his low-budget lifestyle as he is for his high-profile financial success. "People are always surprised that I don't have a closet full of suits," Pickens told Kiplinger.com. "I buy three suits every five or so years and only own ten total. That's all I need."
Pickens credits his grandmother with having taught him money lessons that still resonate: "She'd always tell me, 'Don't ever go any place with money in your pocket looking for something to buy.'" Even today, Pickens says that whenever he visits a store he first makes a list of what he needs, and he carries only the exact amount of money he plans to spend.
Estimated net worth: $40 million
How she struck it rich: Combined wealth with her husband and author, former U.S. President Barack Obama
Frugal habit: Shops at Target
The former first lady is known for being thrifty. While her husband former President Barack Obama was in office, she was spotted shopping at a Target store in the Washington, D.C., area. What did she buy? It's reported that Mrs. Obama picked up dog food and toys for the then-first family's dog, Bo.
In addition to finding ways to save on everyday household items, she's also known to cut costs when it comes to fashion. Despite having access to practically any high-end designer line she wants, Mrs. Obama sometimes chooses to wear clothing from discount stores, such as H&M. In 2011, she appeared on the Today show wearing a $35 dress from the retailer.
When it comes to fashion, finding a bargain at a discount score that doesn't look cheap -- just as Mrs. Obama did -- can be a thrill. However, if shopping for designer threads is your guilty pleasure, you can cut costs by shopping at a consignment boutique. For example, a pair of designer jeans from brands such as 7 for All Mankind and Joe's Jeans usually retail for $150 to $200. That same pair of gently-worn jeans will sell for one-third of the original price at a consignment shop (see our slide show 12 Things You Should Buy Used).
Estimated net worth: $82.6 billion
How he struck it rich: Founded Berkshire Hathaway, the noted investment holding company
Frugal habit: Has lived in the same modest home for 60 years
Buffett could easily afford to live in a mansion much bigger than his 6,000-square-foot, five-bedroom stucco house in Omaha, which he purchased for $31,500 back in 1958. Yet, the multi-billionaire prefers the simple life in small-town America.
In his annual letter to Berkshire Hathaway shareholders in 2011, Buffett discussed the housing recovery and said, "The third best investment I ever made was the purchase of my home." (The first two: wedding rings he bought for his first and second wives.) Buffett added, "For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories, with more to come." Today, the median list price of a five-bedroom home for sale in Nebraska is $379,000, according to Zillow.com. That's 12 times the amount Buffett paid.
Estimated net worth: $25 million
How she struck it rich: Created the Skinnygirl cocktail brand
Frugal habit: Never pays retail prices for clothing or shoes and bargain hunts on eBay
As a repeat entrepreneur and star of the Bravo reality TV series The Real Housewives of New York City, Frankel doesn't take her success and all of the good fortune that has come with it (she sold Skinnygirl to Beam Global in 2011 in a reported multi-million dollar deal) for granted. Several years ago, the reality TV star and entrepreneur couldn't even pay her rent, as revealed in a blog post she wrote on Bravo's site.
Her guilty pleasure is fashion, so when it comes to spending money on clothes, Frankel is adamant about not buying anything that isn't on sale. To help avoid making impulse purchases, she shops mostly online and regularly at discount site eBay.com.
Photo by Maarten de Boer
Estimated net worth: $18 million
How he struck it rich: An Emmy-nominated actor
Frugal habit: Doesn't overspend when making big purchases
Although his character in the ABC sitcom black-ish is a spendthrift with a fondness for new shoes, Anderson -- who grew up in a working-class family in Compton, Calif. -- keeps his spending in check in real life. "I'm not out here buying the latest cars. I don't have the biggest house on the block. I have a moderate house on the best block," Anderson told Kiplinger.com.
"My parents always stressed planning for the future," Anderson says. "It's not about the here and now. It's about 30 years from now -- be aggressive about funding these various accounts while I'm young, so I'll have money coming in later in life."
How she struck it rich: An Academy Award-winning actress
Frugal habit: Clips coupons
Swank comes from humble beginnings, having grown up in a trailer park in Bellingham, Wash. In 1990, at age 16, she moved with her mother to Los Angeles to pursue her acting career. During that time, they lived out of a car to help make ends meet. Her Oscar-winning performance in the 1999 film Boys Don't Cry is what took Swank from an actress on the rise to a star who garners top dollar for movie roles.
Despite her success, Swank hasn't fallen victim to the trappings of sudden wealth. She still has many frugal habits engrained since childhood, including buying toothpaste and toilet paper in bulk. While making an appearance on the daytime talk show Live! With Regis & Kelly in 2010, the actress admitted that she still clips coupons. During that interview Swank said, "When you open up the paper and you see those coupons, it looks like dollar bills staring you in the face . . . it's how I grew up. Why not?"
Coupons are a great way to save on groceries at the checkout line, but you don't always need them to score low prices on kitchen staples. For example, you can stock up on your favorite items when they go on sale or buy in bulk (see our slide show 15 Ways to Save on Groceries Without Clipping Coupons).
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