Warren Buffett is famously frugal, spending only $18 on haircuts, avoiding designer cars and living in the same house for more than 60 years. Jonathan Sanchez, co-founder of Parent Portfolio, a self-made millionaire who amassed a net worth of $1 million by the age of 37, sticks to five money-saving habits and manages resources effectively. Focus on what really matters to him.
According to CNBC, Sanchez revealed that he grew up in a single-parent family with a frugal mother who not only worked hard to save money, but was better at using money saving tricks such as coupons, and still keeps furniture and clothes like those in 80s movies to use today.
He seems to have inherited this thrifty habit, entering the work force as a software engineer, earning a good salary, but always feeling upset and guilty about the money, even if it was only for "our family's basic living expenses and paying off my wife's school loans."
In 2019, Sanchez and his wife realized the importance of preparing for the future of their two children and resolved to change their financial mindset and build wealth.
Through self-study and the assistance of a financial adviser, I developed a financial plan and began to invest in real estate. To help other families, Parent Portfolio is launching in 2020, offering advice similar to theirs.
Sanchez, 40, says that despite reaching the million-dollar financial milestone at age 37, he will never give up his "five frugal habits" and maintain a modest lifestyle.
- Go to the library often
The library near Sanchez's home is an ideal place to spend an afternoon, offering a wealth of free resources. In addition to borrowing books, people can watch movies, participate in board games, or listen to podcasts. In addition, the library hosts a range of wonderful community activities, such as baking classes, art instruction, and basic self-protection training. "No matter how much money I make, I always have a library card," says Mr Sanchez.
- Make your own coffee
Sanchez said that like many people, he used to enjoy a cup of coffee every morning. However, buying coffee every day would be a big expense, so he likes to make his own coffee. While he's not averse to going out for coffee -- he and his wife still visit occasionally -- they keep their spending within a predetermined monthly budget.
Third, DIY repair
For Sanchez, "hands-on maintenance" is not only a way to save money, but more importantly, to cherish things. When something in his home is damaged, he tries to repair it himself first, rather than replace it directly. Many furniture repairs are not difficult, and only a small fee can extend their service life, while saving the cost of buying new furniture.
- Use credit cards carefully
Despite relatively comfortable economic conditions, Sanchez remains cautious about spending and is reluctant to rely too heavily on expected income to meet current demand. With this in mind, he is always cautious about the use of credit cards.
He pays his card fees in full every month to avoid unnecessary interest charges. In addition, he is proficient in credit card point accumulation and feedback mechanisms, and makes use of various offers and benefits to make credit card purchases more cost-effective.
- Only buy used cars
Sanchez said he and his wife are not very dependent on the car and try to extend the life of the vehicle. The two SUVs they currently own were manufactured in 2005 and 2013, and have each clocked up more than 100,000 miles.
They value regular vehicle maintenance and carry out necessary inspections and repairs when the vehicle shows signs of wear and tear. For example, if it costs a lot of money to replace the gearbox, it is better to replace the car.
Sanchez emphasized that growing up with not much, he developed the ability to use the resources at hand to stimulate creativity, and learned the importance of making good use of the resources he had, which influenced his money decisions.
