I Used to Be Poor — Here Are 5 Things I Never Waste Money On

#3 includes paying full price for flights and hotels.

There’s a Chinese saying that goes, “Wealth does not last beyond three generations”.

A similar saying in America goes, “Shirtsleeves to shirtsleeves in three generations”.

The adage describes children’s inability to maintain wealth passed down to them by their parents and grandparents.

According to Yahoo Finance, a staggering 70 percent of wealthy families lose their wealth by the next generation, with 90 percent losing it the generation after that.

That’s why there are so many famous examples of family empires that have fallen, such as the Vanderbilt family.

With those statistics, maybe it’s a good thing I married a regular guy 🤪.

The 10% of families successfully maintain generational wealth by not wasting it

But not all of them lose their fortune. The lifestyle the wealthiest live is often different than what most imagine.

It’s pretty bare bones.

Smart money management is how these families maintain wealth generation after generation.

They are not only good at making their money work for them, but they’re good at not letting money wastefully slip through their fingers.

Take for example, legendary investor Warren Buffet, who lives in the same modest home he bought in 1988 in Omaha, Nebraska.

I’ve relocated more times in two years than Mr. Buffet has moved his whole life 🫠.

All of us might not have generational wealth to start with (cries in somewhere-middle class), but we can take a page from their book when it comes to avoiding wasteful money habits. We can aspire to make our money last at least this generation, and who knows, MAYBE even longer…

I have the unfortunate blessing (or fortunate, depending on how you want to look at it) of living next to one of the richest (aka expensive) areas in America, the Washington DC region.

I’ve met a slew of genuinely wealthy people here, and they all had similar habits. The ones who maintained their wealth over time would hardly ever waste money on certain things. Over the past 10 years, I’ve picked up their McScrooge tendencies and will share those in this post.

Did following any of those habits work?

By some stroke of luck and stubbornness, yes, it worked for me. I saved enough to quit my job in my 30s, mainly because these habits led me to live a minimal lifestyle. Good luck to my spouse 🫡.

Let’s go through what these money-saving rules are.

Here are five things I never waste money on:

1. Buying cars older than two years old
2. Paying interest on credit cards and other purchases
3. Paying full price for flights and hotels
4. Buying brand-new designer clothes
5. Dining out most of the week

Buying cars older than two years old

Cars are expensive. They’re even more expensive now, new or used.

Some people swear off buying new cars, but I think buying significantly used cars (5+ years, 100k miles) are expensive unless you personally know the previous owner.

What makes cars older than three years expensive?

Unforeseen maintenance issues! Not only are there only a few reliable car brands, you don’t know how the previous owner took care of it.

A lot of expensive issues can pop-up around the third year if a vehicle is poorly maintained. Brake issues, tire issues, etc.

I know people who lease nice cars and put in regular unleaded gas their entire lease. Those cars end up getting sold and the new owner will likely need to deal with the issues down the road (pun intended).

That’s why my limit is two years for used cars and less than 60,000 miles, so I have at least another 50k miles to use the vehicle reliably.

You might be good at changing the oil every 3,000 to 5,000 miles, but the previous owner might have forgone it completely.

Paying interest on credit cards and other purchases

This one should be a no-brainer, but I know not everyone can afford to pay off their credit cards in full.

I used to be terrible at managing my finances. I could barely afford to pay off my cable bill, less thinking about interest.

You know what I found was the answer? It’s nothing fancy.

Don’t spend more than you make.

Don’t feel like tallying up your expenses and paychecks every month? Don’t be dumb like I was. I made some recommendations in a previous article on apps to automate spend tracking:

Make as many sacrifices as possible until you live a lifestyle matching your salary.

Find cheaper hobbies (adult coloring books are like $10), stop traveling, skip happy hours, say no to being a bridesmaid (saying yes to this will COST mucho dinero), lose friends, become a bit antisocial, and then come back with more reasonable financial boundaries to match a more reasonable social life.

Make more money if you want a better lifestyle than your wallet allows. You can theoretically make an infinite amount of money, but you can cut only a finite amount of expenses.

Until then, don’t pay more for items you already own by paying interest.

Paying full price for flights and hotels

While we’re on credit cards, I used to swipe credit cards without thinking much about what I was buying. Did I need a third turtleneck?

My life when I was poor was like an Ariana Grande song, “I want it, I got it.”

Now, I make five times as much as I did when I was poor and swipe credit cards within a budget.

I don’t think about having my budget anymore because I realize that living a life with minimal possessions gives me great joy and relief. So when I buy, it’s not much.

When I do swipe, I make that juice count.

I have a credit card with my most frequented airlines so that I don’t pay baggage fees, and I get multiple times the points when I purchase my flights. I have paid for maybe 5 of my flights in the past five years out of the 20+ flights I’ve taken.

I even paid for my wedding with a hotel credit card and had my wedding reception at the hotel chain. The card had one year of no interest; I paid the card off in cash and got 1.5 million points. I didn’t pay to stay in hotels for three years, including my honeymoon.

You have to learn the points game!

For booking flights, I either use my Chase Sapphire card to get an extra 20% discount when paying for flights, or I use my airline points.

The key is not to pay interest to get those points; otherwise, it defeats the purpose of receiving those rewards.

If you use credit cards, learn the points game! Don’t pay full price for flights and hotels.

Buying brand-new designer clothes

This one is tricky because sometimes well-made clothes are made by high-end designers.

Well-made clothes last longer.

But I’m talking about high-end designer clothes, like $500 for a T-shirt.

Those articles tend to follow trends; not all pieces are timeless. Once the season disappears and the trend dies, that $500 Celine shirt might be worth $200.

Trust me when I say you don’t need a $500 shirt. I know this well because I used to sew clothes at a sweatshop when I was a kid.

If you must, you could buy designer clothes fairly used on Poshmark for $200.

When I was poor, I spent money to look *fancy*. I did things like buying a Burberry tie as a gift for someone, wearing Tory Burch shoes to work, and prancing around with a nice TUMI messenger bag.

Now, I cringe at buying a $400 parka, even though I live in an area where winter lasts six months.

I just bought a Northface Parka on Poshmark for $60. It was lightly used; I washed it and have been wearing it daily.

Unless throwing $500 on a T-shirt is nothing to you, designer clothes are unnecessary. DON’T DO IT!

Dining out most of the week

This one is going to hurt.

FOOD is the only thing I love more than my family and husband.

I love making food, I love eating food, and I love food-themed clothing. I even once traveled to New York City for food.

But at the end of the day, dining out should be an experience. If you eat out all the time, it becomes less remarkable.

Dining out also has ridiculous mark-ups. Restaurants mark up their prices up to 300% of the cost to produce the food.

Sales tax on dining out are typically higher as well. Then you have to consider paying a tip, and if you’re buying a drink or two, the markup on alcohol is up to 575%.

Speaking of tip, I recently went to a clothing store in Portland and ordered a coffee from their Robot barista. It asked me if I wanted to leave a tip, no lie.

Healthy food is pretty plain. Plain enough that most people can cook a few dinners themselves. If you’re competent enough to be employed, you’re probably competent enough to cook a meal.

You can argue that some people are so busy they don’t have time to sleep, so they buy groceries and meal plans less.

But don’t you notice that ultra-wealthy people hire personal chefs? They also know that restaurant food is not always made with quality or health in mind. They know meals cooked at home are going to be best.

I think it’s a matter of priorities.

When I was a child, we lived in poverty. Our family lived on food stamps, and my mom worked 12–16 hours daily as a seamstress. She still ensured she cooked food for our family of six for the entire week, even if it was a vat of braised tofu and rice.

I know it’s hard for some people. Everyone has to eat, but not everyone has to dine out every night.

Takeaways

In conclusion, adopting mindful spending habits can be instrumental in transforming anyone’s financial situation.

Embracing a minimal lifestyle, influenced by the money-saving principles of wealthy individuals, allowed someone like me to overcome being broke and achieve peace of mind.

From avoiding interest payments to mastering the points game for travel, these habits can improve your financial standing and contribute to a more intentional and fulfilling life.

By becoming bit of a McScrooge, I’ve come to appreciate the value of intelligent money management, making every purchase count.

These aren’t all the money pits to avoid, but these are some of the few I practice regularly that greatly impacted how my expenses played out later on.

Thank you for reading!

Thanks for reading. I’m a former corporate management consultant writing about work, culture, and personal finance. I’m not a financial advisor. I’m just an average person.

This article is for informational purposes only and should not be considered Financial or Legal Advice. Consult a financial professional before making any significant financial decisions.