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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years Trusted by Frugal millionaires, many self-made, don\u2019t engage in lavish spending or live off large inheritances, according to Ramsey Solutions\u2019 National Study of Millionaires<\/a>, which surveyed 10,000 participants. <\/p>\n The study concluded that high-net-worth<\/a> households often live below their means, so they can invest strategically, rather than live an inflated lifestyle as their income grows.\u00a0<\/p>\n Based on these findings, frugal millionaires tend to practice consistent financial discipline, keeping their total living costs to roughly $3,200 per month, which is often less than what some middle-income households spend. Here\u2019s what a frugal millionaire\u2019s monthly budget<\/a> looks like before retiring.<\/p>\n Saving Is First Priority<\/p>\n Many smart millionaires deposit 15% to 20% of their income into their savings or reserve accounts, to prepare for future risks and preserve their wealth<\/a>, said Joe Braier, CEO and president of Lake Country Advisor<\/a>. They treat savings as an expense, especially when they get closer to retirement.<\/p>\n Housing Is a Small Share of the Budget<\/p>\n Housing costs equal about 33% of high-income earners\u2019 budget, according to the U.S. Bureau of Labor Statistics (BLS)<\/a>. However, most frugal millionaires\u2019 homes are paid off, avoiding mortgage payments and compounding interest.\u00a0<\/p>\n This brings their housing costs to around $776 per month or about 7%, according to the BLS, which covers property taxes, homeowners\u2019 insurance and routine maintenance.<\/p>\n They Keep Utility and Connectivity Costs Down<\/p>\n Frugal millionaires are mindful of everyday energy costs, keeping major utility bills to about $300 per month, which includes electric, gas, water, sewer, and trash.<\/p>\n They often lower the heat and air when they\u2019re not at home and invest in energy-efficient appliances and fixtures<\/a>, such as WaterSense-labeled showerheads, which can save the average family 2,700 gallons a year, according to the Environmental Protection Agency<\/a> (EPA).\u00a0<\/p>\n Internet and Phone\u00a0<\/p>\n Many frugal millionaires have cut the cord, opting out of costly cable bills in favor of a few of their favorite streaming services. They select basic mobile phone plans without all the bells and whistles, averaging $121 per month, and may bundle phone and internet for better deals. Some lower-tier internet plans start at $34.99 per month<\/a> for Fios.<\/p>\n What Thrifty Millionaires Pay for Food<\/p>\n According to the U.S. Department of Agriculture (USDA)<\/a> thrifty food plans cost around $477 per month. This means most meals are prepared at home, and dining out and food delivery is kept in check. Not all millionaires shop at gourmet food stores. Surprisingly, many buy their groceries staples in bulk<\/a> at Costco or shop at Walmart, Trader Joe\u2019s and Aldi to take advantage of the savings.<\/p>\n When dining out, they may use credit cards to earn travel rewards, such as free miles, to save money on vacations. They pay their credit card balance in full each month to avoid interest charges.\u00a0<\/p>\n Beyond the Budget<\/p>\n Frugal millionaires do more than curb spending. They actively manage their debt and investments. GOBankingRates tapped the insights of a financial advisor for insights on how frugal millionaires approaches student loans, retirement contributions and long-term investing.<\/p>\n They Minimize Student Loan Debt<\/p>\n Most frugal millionaires will want as little debt as possible, so paying off student loans<\/a> is a necessity, said Matthew Filepp, owner and president of PB Wealth<\/a>.\u00a0\u00a0<\/p>\n \u201cSome typical debt-payoff strategies include the snowball method (paying off the smallest balances first and rolling payments into the next loan) or the avalanche method (tackling the highest interest rate loans first),\u201d explained Filepp.<\/p>\n They Maximize 401(k) and Roth IRA Contributions\u00a0<\/p>\n Frugal millionaires tend to contribute up to their company\u2019s 401(k) match if their company offers one, Filepp said.\u00a0<\/p>\n \u201cThey will generally contribute up to the Roth IRA contribution limits while they are under the MAGI income limits, and when they are above income limits, they may utilize a backdoor Roth strategy to continue contributions,\u201d he noted.<\/p>\n Beyond retirement accounts, frugal millionaires maintain emergency reserve funds in high-yield savings accounts and invest excess cash flow in an individual brokerage account, Filepp added. This gives them flexibility both before and during retirement.<\/p>\n","protected":false},"excerpt":{"rendered":"RgStudio \/ Getty Images Commitment to Our Readers GOBankingRates’ editorial team is committed to bringing you unbiased reviews…\n","protected":false},"author":2,"featured_media":351367,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,6271,61,60,1087,174,175,5766],"class_list":["post-351366","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-gobankingrates","tag-ie","tag-ireland","tag-money","tag-personal-finance","tag-personalfinance","tag-wealth"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/351366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=351366"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/351366\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/351367"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=351366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=351366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=351366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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