9 Habits To Build Wealth Without Being Frugal

Habits to build wealth without being frugal

Being frugal is a great way to save money and stop buying things you don’t need. But I have to stress that being cheap and being frugal is not the same thing as being cheap means buying low-quality items which will need replacing or making poor decisions for example when deciding between walking or driving – you’ll save time if your drive but you’ll save some expense if you walk. Begin Frugal on the other hand is having the quality of being savvy and sparing with your time and money but making appropriate decisions where necessary.

There are a number of ways to build wealth over time without having to give up on some of life’s luxuries such as owning a car or buying a cup of coffee from Starbucks. Below is a list of habits you can adopt to build wealth without needing to be frugal.

  1. Spend less than you earn
  2. Avoid debt and if you have it avoid not paying it off
  3. Stick to your budget
  4. Read or listen to audiobooks about wealth and finance
  5. Don’t be afraid to be the dumbest person in the room
  6. Invest regularly
  7. Focus on the long term goal
  8. Build more than just one stream of income
  9. Use an investment ISA or contribute more towards your pension

In this post we’ll explore all of these habits further with examples so that you can start building wealth at your own pace today. Read on to find out more.

What does being frugal mean?

Frugality is a lifestyle many young investors are now starting to employ as there are tons of Youtube channels and podcasts which follow the lives of investors wanting to become millionaireas and being frugal is a way to get there sooner. Why? Becasue being sparing and savvy with your money means that you have more of it saved to put towards an investing account whether that be a Vanguard ISA or a trdaing platform like Trading212 or Robinhood (for my readers accross the atlantic in the USA).

Begin frugal means to be savvy, sparing and considerate with your money, time and resources such as food and bills. Thos who adopt the frugal lifestyle tend to avoid lavishness or anything that is unnecessary.

The 9 habits you can adopt to build wealth without being frugal

Spend less than you earn

It’s obvious that spending more money than you earn will land you in debt so it should be easy to avoid right? Unfortunately, that’s not the case and to be fair, the general masses aren’t to be held entirely responsible since we live in a world that’s driven by credit card payments or payments in instalments.

Credit cards and payments in instalments aren’t a bad thing and they can be very useful to help us build our finances in the short term but they also encourage us to spend money we may not necessarily have. Ultimately it’s our responsibility to manage our finances. I often think of a quote one of my teachers said to me when I was studying:

Nobody will care about you more than you care about yourself

An old teacher of mine

Taking responsibility for yourself is the best way to stop spending more than your have and effectively manage your finances.

TIP: Try to avoid paying for items in monthly instalments via direct debit as they can incur fines for late-payments and have interest on top (unless they’re interest-free finance loans). Having the habit of paying in full means that you avoid potential debt and only spend when you have the money.

Avoid debt and if you have it avoid not paying it off

Avoid debt everywhere you can as that will really hold you back in achieving your goals. A common habit when wealth building is to pay yourself first but you can’t do that if you’ve got to pay someone else before you. If you already have debt then make sure you pay it off otherwise not doing so can lead to a poor credit score which will reduce your chances of getting loans in the future when you need it e.g. when buying a house. I’ve written about building your credit score and given 5 easy ways to do it starting from today.

Sometimes debt is inevitable so it’s important to pay it back. This doesn’t mean you can’t build wealth at the same time but if you would like to know how to speed up your debt repayments then have a look at this post I wrote earlier this year.

TIP: If you really need a loan then try taking a personal loan from family or close friends who won’t charge you interest. Make sure to pay it back as having poor relationships are bad for building wealth. If that’s not possible then always go for interest-free finance so you don’t pay any more than what you owe.

Stick to your budget

Wealthy people are wealthy because they know how much they spend and where their money is going. The habit of regularly building a budget is a very effective way to start building your wealth and increase your net worth because a budget doesn’t just help you keep track of your income and expenses, but it also helps with allowing you to do more with your money.

You could argue that budgeting is a frugal thing to do and you might be right but everyone should have a budget whether you’re saving just £100 per month or £10,000.

building a budget is not just for the frugal

Building a budget is one the easiest things to start doing today and all it requires is a notebook and a pen. Know your expenses so that you can building a better future for yourself and it starts with a single step.

Read or listen to audiobooks about wealth and finance

Knowledge is power and the right type of knowledge can help you achieve great heights. Reading books sometimes isn’t only about the content but its also about the writer. I truly believ that readin books is like having conversations with some great minds. They can help us by providing solutions and at the same time, they provide us with the ability to think of soultions to our problems.

There are some great books and they’re also available as audiobooks so if you’re not able to sit and read for 30 minutes a daythen listening to an audio is a great way to get into the habit of spending time with great authors.

A book that I would recommend is called The Intelligent Investor by Benjamin Graham. Warren Buffet says that this is his investing Bible and is the best book that he’s read. In this Youtube video, Warren Buffet says that this book changed his life.

Don’t be afraid to be the dumbest person in the room

When I was a junior software developer still making my way through the development world, one of the best things I did was to attend meet ups and make friends with other developers, specifically senior developers. This was the best thing I did because it gave me an idea of where I wanted to be in 10 years from then and I was able to use their examples to get there faster by avoiding their mistakes.

Your surrounding defines who you are or who you will become so making sure that you have a good environment is essential in building your wealth. That doesn’t mean cutting out friends but it means diving into other circles as regularly as possible.

TIP: Try to attend conferences or webinars about finance and wealth building even if it’s a topic you already know. I bet you can learn something new every time. If you’re an introvert and not able to make friends or interact with others easily, try interacting through forums like Quora.

Invest regularly

Investing is one of the best ways to grow your wealth and investing regularly in the stock market can help you reach your financial goals sooner than you might think. That because of the power of compound interest which builds money on top of your money and the interest gained on top of that. Compound interest combined with time equals huge returns even if those returns aren’t immediate.

As well as compound interest, investors can earn more money simply for holding shares in a company. That because some companies pay a portion of their profits to their shareholders and you automatically become a shareholder eligible for a share in the profits even if you hold just one share. This portion distributed to you and other investors is called a dividend. When you reinvest that dividend earning back into the company, you’ll receive a bigger payment the next time. I’ve explained all this in great detail in my post about dividend growth investing.

If you’re new to invest then this guide on how to invest will help you. It contains details of the mistakes that I made when I started to help you avoid them and grow your money even faster.

Recommended Reading: How To Earn Passive Income With Dividend Stocks (A Complete Guide)

Focus on the long term goal

It’s important to make goals but the most important goal is the long term one. Focusing on the long term is difficult because it’s not generally in sight and can sometimes feel like they’re forever away. But making short term goals to get too long term goals can help. We have a great post on goal setting which focuses on how you can set goals that are actually achievable and how to achieve them.

TIP: Make lots of short term goals that naturally lead to your long term goal. A best practice that I use when making goals is to write my long term goal and remind myself of it regularly. Then I write down short term goals of the steps I need to take to get there.

Build more than just one stream of income

Warren Buffet famously said that if your salary is your only source of income then you’re one step away from poverty. Building more than one stream of income or even having a supplementary side income can help boost your finances as every little helps.

Wealthy people have more than one stream of income and there’s plenty that you can start doing today that has a low barrier to entry for example you can sell your old things online or buy and sell – I did this for a while where I bought items on facebook market for cheap and then resold for a profit many times. If a side hustle isn’t your thing then filling out surveys with determination can earn you an extra £100 per month or you could become an Uber Eats delivery rider/driver.

Complimentary Reading: 5 Survey Apps I Tested (That Pay A Lot)

Use an investment ISA or contribute more towards your pension

Using an ISA or a Roth IRA is a great way to build your wealth as you can invest in both ETFs/Index Funds and single stocks and as you earn from those investments, the profit is not taxable as ISA’s in the UK are tax-free up to £20,000 per year. That means you can invest £20,000 every year and the earnings each year cannot be taken by the taxman or HMRC.

You might want to read my post on taxes on investments in which I give examples of how much tax you’ll need to pay when you earn a certain amount but I also identify some ways in which those investments become tax-free. One of those ways is by using an investment ISA. Contributing more towards your pension is also a great way to save on tax.

When should you be frugal?

You don’t need to be frugal all the time. The definition of being frugal is to be savvy, sparing and considerate with your resources which includes your time or your money. If you’re able to walk, then maybe driving isn’t the solution. You’ll save some expenses on fuel and save the planet and also get some exercise. But if you’re travelling far and you know that tiredness will cause a reduction in your level of productivity then maybe taking the bus or driving is a better idea.

Or let’s say you’re in a store buying an essential item for your new home and there is a cheaper option that you know is great but won’t last as long as the more expensive option. On this occasion, I would opt for the more expensive and longer-lasting option as this will save me money and time in the future.

Its important to make wise choices when being frugal. Remembering that being frugal doesn’t mean always going for the less expensive option helps. It also means thinking about the potential savings in the future.

TIP: If you do buy the cheaper item and it’s coming to the end of its lifespan then you can try to insure it and get a replacement if it stops working. Or you can sell it to recoup some of your expenses.


Being frugal has been great for me but I’m not completely frugal. I have a car and I like to treat myself to the occasional Starbucks coffee or takeout. But I’m not cheap. I use the above list to build wealth over time and they’re as simple as investing regularly so you can start today.

I’ll leave you with the following two key points:

  • You can build wealth in a number of ways. You don’t have to do all of them as you can start with just one. Just find the one that you feel most comfortable with.
  • Be intelligent. Be frugal when you need to but get things done when you have to.

Hopefully you liked what I had to share. If so, pay it forward by sharing it with others.

About Mazaher Muraj

An established software engineer with over 10 years of experience having worked in the medical, financial and telecommunications sector. Other than that I'm a regular person just like you. I started investing to make my money grow and reach my financial goals. I faced a lot of obstacles at the beginning of my journey because I had so many questions and didn't know where to start. I started this blog to help others in a similar position, to provide high-level and helpful content to make the complicated things about investing as simple as possible for everyone.
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