A common misconception is that wealthy people can spend as they like while struggling people should budget and save. Social media continuously reinforces this, which shows billionaires living in homes, on yachts, and in private jets.
The notion that wealthy people don’t budget has been engrained since TikTok trends that exalt extravagant lifestyles and Instagram influencers who flaunt costly clothing. There is a common misconception that wealthy people can spend as they like while struggling people must set aside money for savings and budgeting.
Social media, which shows billionaires living in homes, taking private planes, and cruising on yachts, always highlights this. As seen by the popularity of TikTok trends that exalt lavish lifestyles and Instagram influencers who flaunt designer clothes, the idea that wealthy people do not follow budgetary limitations has become deeply ingrained. In reality, most wealthy people worldwide follow strict financial discipline.
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For example, Warren Buffett, whose estimated net worth exceeds $150 billion, is among the wealthiest people in the world. Despite his considerable wealth, he still lives in the same home he purchased for $31,500 in 1958, owns a basic car, and is well known for his self-control in avoiding unnecessary expenses.
Strict budgeting was a habit of even historical figures like America’s first billionaire, John D. Rockefeller. He was renowned for his careful approach to financial management and budgeting. In both his personal and professional life, he was renowned for his frugal handling of finances. From an early age, Rockefeller maintained thorough records of his earnings and outlays, a practice that helped him succeed as a businessman.
From an early age, he kept a close eye on every penny he spent, even though he had accumulated a fortune. He put these ideas into practice as the founder of Standard Oil, creating one of the biggest and most successful businesses in history. These instances show that one’s capacity to handle one’s wealth well determines one’s level of prosperity rather than one’s income.
Despite their enormous fortune, billionaires like Mark Zuckerberg and Ingvar Kamprad are renowned for leading austere lives and practising strict budgeting. They put practical spending first, avoid pointless frivolities, and concentrate on reinvesting or giving their money rather than splurging. Financial discipline, living below one’s means, and strategically using one’s wealth, whether for one’s security, the expansion of one’s business, or charitable causes, are themes that run throughout one’s life.
Financial traps
These days, people are under pressure to keep up a certain social media presence, which causes many people to slip into financial traps and mistake their spending for success. On the contrary, most self-made millionaires and billionaires emphasise economic growth, make strategic investments, and stick to budgets rather than engage in wasteful spending. 78 percent of ultra-high net worth individuals prioritise long-term investments, such as equities, real estate, and enterprises, over whimsy, according to the 2023 Knight Frank Wealth Report.
So, do the wealthy save money and stick to a budget? Definitely, they deliberately invest, plan, and grow their money, which sets them apart from people who just save. The next time social media entices you to spend carelessly, remember that genuine riches are about freedom and financial security rather than the appearance of wealth.
By Dr Anne Karimi
Dr. Karimi is a financial expert, and the views expressed here are personal and do not reflect the position of her employer.
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