Should the wealthy budget too?

The Momentum UK Team 30 January 2014

How many times have you come across a story that tells of magnificent lottery winnings followed by a tale of extravagant expenditure and eventual (relative) pennilessness?

The boom and bust model isn't the only one out there though and there are countless examples of millionaires living carefully within their means. IKEA founder Ingvar Kamprad once said: “IKEA people do not drive flashy cars or stay at luxury hotels” and is frugal despite his bank balance.

Chuck Feeny, the Duty Free Shopping tycoon with a philanthropic streak, sticks by his personal motto: “I set out to work hard, not to get rich”. He says that he buys high street clothes, and spends a lot of his money donating to good causes rather than spending it on himself. There are countless other examples of frugal millionaires.

Budgeting may be traditionally associated with those that are strapped for cash, but it can be for the wealthy too (and not just those interested in living below their means)...

A budget is the foundation of a sound financial plan

Every good financial plan starts with a budget. You need to know exactly where your money goes before you can decide on how to spend it better, or how it can help you to reach your goals.

Even if you’ve already got a flashy car, a healthy retirement fund and a great house, a budget could help you do better. Making a budget could be just what you need to help you achieve even more with what you already have.

Spend more on things you love

Budgeting can help you to gain total control and the freedom to spend your money on the things that you value. It doesn’t have to be about cutting back or doing things on the cheap.

If you’ve got everything you’ve ever wanted, and you’re on course to meet all your goals, a budget could also help you to work less and spend more time doing the things that you love.

Know your spending inside out

Whether you’re wealthy or poor it’s likely that making the most out of what you’ve got is important to you and a budget can help you do that.

Ever wondered if you’re being ripped off on the price of a service or product? If you’re paying to much for the electricity that heats your pool?

If you don’t have a budget you could even be spending in places you didn’t realise.

Know your spending. Shop around. Get more out of your money.

Could your money be working harder?

Rather than seeing disposable income as cash to spend, if you’ve got a bit (or a lot) left over, you may want to set it to work a little harder for you.

Are you getting the best rate? Have you considered investing? Set up a pension? Getting to know your money can help ensure you’re not missing a trick.

Remember that you need to consider your circumstances carefully before you invest. Check out our handy guide to investing to get started.

Make it quick and easy

Budgeting can help you keep track of your finances. So that you can see a complete overview of your finances so that you really know how much you have to spend, as well as how much you’re spending on each area.

Our money management tool Money Hub can help give you a birds eye view of your cash and even allows you to connect securely to your accounts so you can keep up to speed with how things change from day to day with minimum hassle for you.