With all of the money that celebrities tend to have, you’d be forgiven for thinking that they don’t need to even think about personal finance. They have a lot of money, and they usually have a person designated to take care of that kind of thing for them. Oh, how the other half live!
However, many celebrities are still extremely money conscious. They may not make as much as you think they make, and even if they do have a lot of money right now, you have to remember that celebrities are usually freelancers. This means that one day, they may not get booked for jobs and appearances anymore – then what will they do? This is why smart celebrities take an interest in personal finance tips, no matter how rich they currently are.
Do you want to know some of the most valuable personal finance tips that celebrities swear by? Read on!
1. Keep A Healthy Sense of Perspective
This one comes from Mad Men star John Hamm, and is all about looking at things with a long term view and keeping your sense of perspective. Don’t overthink things or let something loom so large in your mind that making a decision becomes impossible. If you lose some money, you’ll find a way to make more. If you make a wrong step, you’ll learn something new and feel more knowledgeable in order to make the right one. You should be smart, but don’t become paralyzed!
2. Know Your Worth
Many female celebrities shout this one from the rooftops, especially since many of them get paid less than their male counterparts. Jennifer Lawrence, Michelle Williams, and Nicki Minaj have all experience and spoken about this. Minaj felt she wasn’t making as much as other rappers even though she drew huge crowds whenever she put on a show, so she decided that she would command what she deserved. Don’t sell yourself short!
3. Know That Material Objects Will Not Buy You Peace
We all know deep down that material objects don’t buy happiness, but it can’t hurt to have a gentle reminder. Jordan Peele explains that he lived month to month before he was rich, but quickly realised that his tendency to splurge on anything he wanted did not help him to feel the way he thought it would. He now lives entirely differently to how he thought he would at this stage in his career, and is proud of being very frugal!
4. Live Below Your Means
A great all-round finance tip that just about anybody could give you, but somebody who actually lives by it? Jennifer Lawrence. She lives in the same apartment as when she first moved to LA and hasn’t spent her money on anything outrageous. She even bought a reliable car rather than something flashy. Your car should not be eating up half of the money you earn just for an ego stroke! Where could you cut back?
5. Spend Wisely
You can spend your own money, of course, but you should always spend it wisely. Michelle Obama details in her book ‘Becoming’ how the family remained frugal even while Barack was in his presidency. Michelle regularly wears high street clothes and hasn’t forgotten her roots. Rees Witherspoon is another celebrity who lives by this – she doesn’t spend all of her money on lavish outfits and instead shops vintage and high street, swaps with friends, and tends to only go out and buy new clothes once a year.
6. Make The Most Of Discounts and Coupons
There’s absolutely no reason you should avoid discounts and coupons – even if you’re a celebrity! Sarah Michelle Gellar loves using coupons. She says, ‘why spend more on something somebody else is paying less for?’
Kristen Bell also loves coupons, and laughs at the funny looks she gets when using them in the supermarket!
7. Make The Most Of Public Transport
You may not be able to do this all the time, but using public transport where possible could help you to save money on car maintenance, repairs, and fuel. Not only is it better for the environment, famous actors have been known to use the bus and the underground – especially before auditions. It’s a great way to run lines, do exercises, and avoid getting stressed out by traffic, says Vincent Kartheiser.
8. Avoid Lending Other People Money
Lending people money can feel like a nice deed – until you don’t get the money back. The person you give your money to may have the best of intentions, but you should avoid doing this unless you know for a fact they will give it you back. Any money you lend to other people, is money that you should be prepared not to see again. You should not be lending money you cannot afford to lose, so think carefully before you agree to somebody’s request. Comedian Chris Tucker has made jokes about this in his act.
Don’t borrow money from people, and don’t lend money to them. This is a rule of thumb to live by.
9. Create A Budget So You Can Invest
One of India’s most famous and highest paid celebrities, Alia Bhatt, has no problems living on a budget. She loves hers as it gives her more money to invest, and often tells people that it’s never to late to start cfd trading. Looking into investments now will help you to build wealth later on. Make the most of compound interest now!
10. Put Some Of Your Money Aside
Sophia Amoruso catapulted to wealth and fame after being a working-class 20-something when she came up with her vintage clothing business. However, her business later went bankrupt, the Netflix show based on her life was canceled, and she and her husband filed for divorce. This meant she had to suffer some pretty brutal financial blows!
However, Sophia didn’t falter. She carried on and started a new business aimed at career women. She also says you should put aside 10% of your earnings and leave it alone. Although this may be difficult initially, the chances are you won’t miss the money. This is a great habit to get into and can give you a decent cash cushion/emergency fund to fall back on should you need it!
11. Clean Out Your Expenses
Who better to look to for cleaning advice than Marie Kondo? Not only does she know how to clear out your home, she recommends clearing your life of junk in every conceivable way – including your expenses. Sorting out your unnecessary expenses can feel great and you will reduce your lifestyle inflation and be more able to live below your means.
12. Work Towards Financial Independence
There are cases of celebrities who lose all of their money and end up filing for bankruptcy – so understanding and working towards financial independence is so important even for them. You may not be a celebrity, but this is something you should still aim for.
It’s also important to note that financial literacy often ignores some personal finance realities, so you may need to do the best with what you have. “You can save money when you can afford to save money,” Cardi B explained in an interview.
13. Don’t Try To ‘Keep Up’ With Anybody
Lifestyle inflation happens when people try to keep up with their friends and family. That big HD TV, that new car, the bigger house – do you really need it all? Just because you could potentially afford it, doesn’t mean you should do it.
“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” Wise words from actor Will Smith.
14. Keep Your Will Updated
When you’re no longer here, you want to make sure the people you love are taken care of. It’s not something many people like to think about or deal with, which is why when the worst happens, families often end up in despair. The late actor Heath Ledger had a will, but it was written three years before his daughter, Matilda, was born. Of course this meant that Matilda was not included in the will. A will should be updated whenever you have a major life change – divorce, marriage, and children being born are all such events.
15. Practice Negotiating
Where possible, put your negotiation skills to good use. Negotiate car prices, insurance prices, fresh food prices, anything you can! Lady Gaga, as rich as she is, unashamedly looks for the sale rack and tries to bargain when she can. She doesn’t care, though, and proudly states that she’s ‘from New York!’ She also loves buying vintage presents for people at Christmas. Vintage jewelry can make a great gift and is very affordable, so try looking at that next time you’re on a budget during the festive season.
Have you picked up some personal finance tips that you can use after reading this? If you have something of your own to add, leave it in the comment section below. Thanks for reading!