Meet the Millionaires Living a Life of “Underconsumption”: Aldi Groceries and Goodwill Clothing

Berkshire Hathaway CEO Warren Buffett, for example, is famous for driving a 2014 Cadillac that was covered by hailstorm damage. Bill Gates, co-founder of Microsoft drives an electric Fiat500 offered by Bono, while YouTube star MrBeast sleeps in his office and I had to borrow money from your mother to pay for your wedding.

So how can the rich stay rich? Apparently, acting as if they weren’t. High net worth individuals and employees over $100,000 Fortune spoke said they were trying to keep their discretion spend as little as possiblepreferring the impact it has on their finances.

While their friends might enjoy eat out a few times a weekthey choose to cook for themselves. In fact, they even buy frozen products because they are cheaper than fresh products.

Some choose not to own a car, repair their own “capsule” wardrobe and find some of their children’s toys on Facebook Marketplace.

These individuals, in some cases unconsciously, lead a lifestyle of “under-consumption” or “low consumption”.

The expression started spreading on social media sites like TikTok after individuals began sharing their weekly grocery shop or makeup cabinet to counter the endless shopping or wish lists often found on the app.

Tips from the “underconsumption core” community included creating no-purchase challenges or decluttering spaces filled with items you don’t use.

For individuals Fortune who we spoke to, these habits are already second nature. And after living underconsumption for most of their adult lives, their bank balance is reaping the rewards.

Shopping in the frozen section

Author and entrepreneur Shang Saavedra and her husband didn’t build a multi-million dollar net worth overnight. In fact, it was in their respective childhoods that they learned the value of a frugal life.

Renting a four-bed house in suburban Los Angeles, the two share a 17-year-old used vehicle and shop at Aldi, mostly in the frozen food section.

Saavedra’s sons, ages six and three, often wear hand-me-down clothes, play with toys found on Facebook Marketplace and enjoy free activities instead of the trips to Disneyland that their California peers often take.

Although multimillionaire Saavedra’s life has some characteristics of a high-income household (her children attend private school and she owns property in New York), these expenses align with her financial philosophy: investing in education and assets that support her philanthropic efforts.

Unlike the majority of Americans – 58% of whom said Harris Poll survey in 2023 they worry about their finances during the holiday season. Saavedra says his daily spending during Thanksgiving and Christmas increases primarily because of philanthropic donations.

The 40-year-old’s ability to share her wealth is the result of savvy financial decisions made early in her career, when she held an executive position at CVS, as well as analyst and consulting roles at Victoria’s Secret.

Before her marriage, Saavedra lived with roommates, then moved with her husband into a rent-controlled apartment in New York City (a building where the plumbing was often shut off), often using meal vouchers handed out while working late in their corporate roles.

They aimed to reduce their expenses to one income and save the rest, in preparation for having children.

Saavedra, now an entrepreneur who helps hundreds of clients achieve their financial goals, said: Fortune in an interview, the best way for people to try an underconsumption lifestyle is to “start with why.”

“What is the end goal of underconsumption? If you practice underconsumption simply for the sake of underconsumption, you will burn out and become unhappy very quickly,” Saavedra explained. “Because my husband and I geared our spending toward financial freedom and family, it was definitely worth it.

“Of course, I’m always tempted to go for luxury items and experiences, and every once in a while we have a nice date night at a really nice restaurant, but understanding the reason why you want something…comes from a pain for an unfulfilled part of your life and is often a psychological need.”

Second-hand clothes

What it takes to run a household is only getting more and more expensive. According to the US Bureau of Labor Statistics, the average monthly household spending in 2023 was $6,440.

This is a big increase from just a year ago – up 8.3% – and 15.5% from 2021, when monthly expenses were $5,577 per month.

Yet despite the fact that Annie Cole has assets totaling over $1 million and earns a six-figure salary, she has cut her expenses to just under $4,000 per month.

Cole sold her Prius a few years ago, cooks meals for herself and her husband, cuts hair and shops for clothes three times a year at her local store. Cole last bought new clothes a year ago and with a gift card.

The couple travel using airline miles and points accrued when Cole, 36, was traveling for a professional role, spending his vacation enjoying free activities like hiking and swimming.

This approach has not only changed Cole’s outlook on how long she will work (retirement is planned in her early 40s) but also on the nature of the work itself.

“I’m so curious if I actually want to retire,” says Cole, who works as a contract researcher and personal finance expert. Fortune. “Now that I’m working part-time, I think about it differently. When I was working full-time, I thought I was looking forward to working as an option, but I almost feel like I’m living it now.

“I’m doing everything I want to do and knowing that I could retire makes me feel like I have a nice financial cushion to say, ‘Hey, we’re taking care of you as you get older and in the meantime you have the flexibility to live and work differently.’ That’s a blessing in itself.

Packed lunches and shared travel

Dentist Robert Chin and his partner Jessica Pharar own a practice in Las Vegas. They make the short drive from home together to reduce their fuel consumption, with their packed lunches in tow.

The couple transitioned to a low-consumption lifestyle thanks to rising costs and a clearer idea of ​​what they wanted their finances to look like, even though the couple was comfortably earning six figures.

Chin tells Fortune he now eats out once or twice a month instead of a few times a week, and does his shopping at Costco to avoid inflationary prices of food products as best as possible.

Unlike other sources Fortune To whom we spoke, Chin isn’t opposed to buying new clothes, but maintains that they should have a lifetime warranty (from Patagonia for example) or they will last for years.

The couple owns a condo that they rent out, but are renting out their current property to have the flexibility to buy when the market starts moving again.

Their goal is simple: flexibility, whether that means taking more time together or potentially retiring sooner.

“In five years we would like to have a partner or another practitioner, both because the office has grown enough to support that and also because it gives us the flexibility to take time off more easily. That’s probably the biggest challenge for us as leaders in the industry, our ability to take time off is really difficult because if we’re not there the practice doesn’t make money.”

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A first version of this article was published on December 28, 2024.

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