Legendary investor Warren Buffett once said, “Do not save what is left after spending, but spend what is left after saving.” Having this mindset is not easy in today's culture of consumerism and instant gratification being thrifty is one of the keys of building wealth. Being thrifty is not about being cheap, it's about prioritizing how you spend your money. I remember when our company offered employee stock options for at least $30 a month. I figured instead of buying $2 coffee from Starbucks, I'll just use the free coffee from the coffee machine in the office and spend my money to buy company stocks. After years of averaging our company stock at it's high and lows for the price of my Starbucks coffee budget, I'm pleased to see that I built a substantial nest egg from it that I can use for retirement.

Pay Yourself First

In the book Rich Dad, Poor Dad; Robert Kiyosaki wrote about paying yourself first. It's a similar principle to Warren Buffet's quote above. It's simply setting aside money for savings or investment before paying for bills, luxuries or anything else. It may be 10%, 20% or 30% of your monthly income but set aside an amount for savings or investment and consider it spent, as if you paid for something and don't consider withdrawing it for the short term. The more you save, the closer you are to your retirement nest goal.

Being Thrifty

Warren Buffet is known for living modestly inspite of his riches. He’s lived in the same Omaha home since 1958, purchased for $31,500. He's also known for buying marked down cars and avoiding luxury brands. It may sound like strange but it's a habit to building wealth through discipline and finding value on what we spend. If Warren Buffet who can afford luxurious brands does it, so can we.

In Practice

I'm an employee with most of my income coming from my salary. There are some side gigs here and there but salary is my bread and butter. When I started working I was saving around 10% of my salary and putting it in the bank. Later on when I was earning more I was able to increase my savings to 20% then as much as 50%. I also moved my cash savings in stocks (and now crypto) and buying pre-need products like insurance. For expenses, I already mentioned I'm a frequent customer of our coffee machine instead of Starbucks. I also bring food to the office instead of dining out. It's a lot of savings considering the cost of dining out is around $4-$5. I also choose mid-range phones over flagships that cost more than my laptop. Being thrifty is not about choosing the cheapest option, it’s about selecting what gives real value.

We should be consistent and disciplined in savings and stick to our goal we set. Set up a separate account for savings and consider the amount sent there as "spent". If you are scared in investing in stocks then consider mutual funds which gives better return than time deposits.

Final Thoughts

Warren Buffett’s example shows that real wealth isn’t in what you spend but in what you keep and grow. Ask yourself when you want to buy something if you really need it or if there are better, economical options. Place value on long-term use rather than instant gratification. The flagship phone you buy now will be worth so much less a year later. Wouldn't it make more sense to buy a cheaper alternative and put the extra cash in investments? Practice thriftiness not to curb your desires but as a tool for security and a richer life.