- Instead, they understand that living with less is better, and look for high-quality items that fill their needs.
- They also tend not to take on conventional long-term expenses like auto leases, or keep balances on credit cards with high interest rates.
- Visit Business Insider's homepage for more stories.
You don't have to be wealthy to be good with money.
Being good with money is about habits, not income. People who are good with money are always looking for a way to live within their means and spend less than they need to. We collected money tips and spending preferences from experts and people who have accomplished admirable feats like paying off their mortgage early, eliminating five figures of debt, and putting $100,000 in savings.
There are some purchases and habits that just make no sense to those who are truly good with money here are the top seven things they aren't likely to buy or spend on.
They're not buying brand new cars
"The person who was actually has several hundred thousand in the bank or may even be a millionaire is going to drive a 5-year-old car or a 10-year-old car," says personal finance expert and author Lynette Khalfani-Cox.
A new car loses 10% of its value in the first month, and 20% of its value in the first year, reports Business Insider contributor Steven John . Someone who's good with money won't want to take on that kind of loss.
Those who are good with money know that the best value comes from buying used , and that by keeping the same car for a while, they can save a lot.
And they're not leasing a new car constantly, either
When it comes to leasing, Khalfani-Cox says that someone who's good with money will likely turn the other way. "They're not going to say, 'oh, let me lease this $50,000 car, and then next year let me lease another one,'" she says.
Leases will still involve down payments, and though the monthly payment and up-front payments may be lower , you'll never own anything like you could with a loan. Though a lease might seem like a way to dodge debt in the short term, those who are good with money will see it in a different light.
"If you're motivated by the lowest long-term cost, buying and keeping your cars longer will make more financial sense," Alain Nana-Sinkam, the vice president of strategic initiatives at TrueCar, previously told Business Insider's Tanza Loudenback .
Those who are good with money are likely to be less caught up in needing the latest and greatest, meaning a lease won't really be the best option for them.
They won't buy houses they can't afford
Spencer Platt/Getty Images
Those who are good with money aren't looking to spend more than they can afford on a home, and they know that the best piece of real estate is the one they can afford.
And when it came to buying a house, she and her husband bought a significantly smaller house than they could have to pursue early retirement and living mortgage-free. "Housing affordability calculators have always told us we could spend double, triple, or more than we did on a home," writes Johnson. "But we have always ignored them and forged our own path."
Instead of buying a large, expensive house, they opted to spend on experiences. If they'd bought a larger house, she writes, "we would have a lot less money to save and invest each month toward early retirement. We would also have to drastically curb our annual travel budget."
They're not buying things on credit that they can't pay for
Whether it's a $2,000 purchase or a $20 purchase, those who are good with money won't pay interest on their purchases.
Carrying a balance on your credit card means you'll be charge interest every month, and it won't be cheap, either many credit cards will charge interest rates of 25% or more.
Business Insider writer Elizabeth Aldrichracked up $10,000 worth of debt in her 20s. But, since then, she's learned from her past and has become good with money, paying it all off in three years and building a $20,000 emergency fund in six months.
As she looked back on the money mistakes that got her into debt, she cites carrying a credit card balance as one of the biggest issues. "Every month I would run up a balance on my credit card and then pay off what I could by the end of the month," she writes. She also writes that this habit caused her to "spend thousands of dollars on credit card interest in my 20s."
Now, she never spends money on interest.
They're not buying luxury goods from brand-name designers
Brian Dowling/Getty Images
Those who are good with money are "less interested in brand names or tags and labels," says Khalfani-Cox. And it seems that those with wealth are starting to take this cue from those who are good with money.
As Business Insider's Hillary Hoffower reports , "showing off wealth is no longer the way to signify having wealth. In the US particularly, the top 1% have been spending less on material goods since 2007."
And they're less likely to load up on material items at all, opting for quality over quantity
Those who are good with money aren't filling their closets with fast fashion clothing and buying an abundance of cheap things that will break. Instead, they'd rather put money into items that will last.
"They're more concerned with quality as opposed to quantity," says Khalfani-Cox. She continues: "I think people who are good with money are often not afraid to go against the grain and to actively unplug from consumerism."
And they probably aren't planning lavish, expensive weddings
Anyone who's planned a wedding knows just how costly they can be. But those who are good with money aren't planning to spend lots of money on their ceremony.
Nathan Clarke of The Millionaire Dojo used aggressive savings techniques and investments to sock away over $100,000 in savings by age 25, and he has hopes of becoming financially independent and is pursuing his goals of becoming a millionaire.
For him and his now-wife, one of the things that helped him to reach $100,000 in savings was a low-cost wedding. They spent just $10,000 on the big day, and saved aggressively instead of spending on the wedding.
"Really, all we paid for was all the decorations, food and a little bit for the reception venue," writes Clarke. "I don't understand why people think they have to spend $50k on a wedding. I'd rather travel the world for a year with $50k than spend it on one day."
- Chase's Freedom Unlimited review: One of the best cash-back credit cards of 2019 with perks that many competing cards don't offer
- Capital One miles are incredibly easy to redeem. Here are 5 ways to use them to book a spontaneous end-of-summer vacation.
- 4 things people who are good with money do every day