How to Save Money Like a Millionaire

I rated this how to as Challenging, because although saving money is almost never complicated, it is quite difficult for many people.
Millionaires, as a group, are not what most Americans think they are. Many live modest lives in middle class neighborhoods, saving money and living fulfilled but relatively simple lives.

Saving money like a millionaire is about realizing the basic principles of accumulating wealth, and understanding that patience and a long term plan are two of the most important components.

Instructions

1. 

   Create a budget. You may read this in hundreds of places and still not be sure how to accomplish it. Creating a budget is about understanding how you spend your money, and making it do what you really want to.

   It is important to realize that a budget is an organic document, meaning it can change and grow as you learn more about your spending habits. Don't be discouraged by the change - just understand it.

   An alternative to creating a budget is building an environment of artificial scarcity. This means you set up automatic payments and transfers to make all of your savings and investments hands off.

2. 

   You can only save money if you spend less than you earn. Most millionaires are experts at this, they live very far below their means, invest their savings and avoid debt of almost any kind. Living below your means is important, and difficult for most people to handle. Realize that saving money, investing in retirement funds, and building wealth requires you take actions NOW in order to benefit later.

3. 

   Use the power of compound interest to save like a millionaire. Compound interest is the effect of earning interest on interest. Saving money by creating CD ladders, investing in index funds with a long term view, and buying assets that appreciate in value is the road to building wealth. Work up to investing the maximum allowed to your retirement accounts, and spend time learning how to make your money grow through wise long term strategies.

Tips & Warnings

• Start small, record your spending and income. Invest just one percent into your 401k, whatever will get you going. The hardest part of the journey is from 0 to 1.

• Find out what really makes you happy and reward yourself with it. Living frugally and saving money does not mean you should be miserable - it should make you happy and free you from cycles of debt and uncertainty.

Resources

• "The Millionaire Next Door" Maybe the best book on how millionaires live
• Great Cookbook with Budget Friendly Recipes