Learning Money Management from Famous People

Pop stars and other famous people have interesting perspectives on money management. We might hear about a famous person who bought a multi-million-dollar home and we think that their spending is extravagant.

But most famous people spent a lot of time with very little money before they made it big, and many of them have developed money management habits that can benefit us as well.

Most Famous People Started Out Having to Pinch Pennies

Typically, their career starts with the starving years. Money is tight and the payment from one gig becomes gas money to get to the next gig. Stephen Colbert has mentioned that when he first started, he lived in an apartment in Chicago with a roommate and they would make one serving of a meal last for a whole day. Jay Leno always thought it was best to have more than one source of money, so his first jobs were working at a hamburger place and working as the lot boy at a car dealership. This also led him to a lifelong love of both hamburgers and cars! Keanu Reeves lived in hotel rooms and trailers as a homeless person before he made it big.

Tip: A second source of income is better than a single source.

Managing Money in Mid-Career Years

In the mid-career years, they are doing better and able to meet their needs with some left over. This is the time to decide how to manage the income beyond what is needed to live on. It’s also the time to still be frugal. Cardi B has said that even though she has made it big, if she doesn’t save, work and budget, she could still lose what she has accumulated. Singer Ed Shareen used to stay with fellow stars’ homes even while he was becoming known in the field. He continued to live on about $1,000 per month, even when he was making more than that.

Tip: When income rises, don’t abandon the budget. Instead, adjust it to meet the new level of expenses. Maintaining the same budget while saving the increased income can help grow wealth. Even people with high incomes can struggle to make ends meet if the plan is abandoned.

Hire Others to Manage Money But Stay Involved in the Management

While many famous people have decided to hire people to manage their money, others still wanted to be involved in those decisions and to maintain control. Actor Dax Shephard (married to Kristen Bell) noted that he and his wife control big-ticket spending and focus on good budgeting of their income. Kristen still continues to use coupons. Ashton Kutcher has learned enough about the investment world to use his money to invest in tech startups and keeps very involved with that sector. There are many examples of famous people who lost a lot of their wealth when the people they hired took advantage of them, or gave them bad financial advice.

Tip: It’s okay to let other people manage your money, but make sure you keep track of what they are doing. While others may manage it, it is still your money and your ultimate responsibility.

Money Management Skills Early On Will Stay With You

Once they made it big, many famous people had more money to spend, but they still chose to remain true to their money management skills learned early on. Peter Dinklage, of Game of Thrones fame, still lives in rural New York and does his own projects around his property. His car of choice is a Volvo. Comedian Tiffany Haddish still shops for clothes on the sale racks, despite the Hollywood pressure to dress lavishly. Zooey Deschanel still pays off her credit cards each month, and lives on 23% of her income. Jay Leno has still maintained two jobs: he lived on his weekend stand-up comedy show income while completely saving all of his Tonight Show contract payments.

Tip: Good money habits early on in life will provide good guidance regardless of one’s popularity and wealth.

Giving Back is Important Too

Finally, famous people who started with little feel it is important to give back and to spend a little on themselves. Zooey Deschanel might only spend 23% of her income, but that’s likely a fairly big number to most of us. Dolly Parton is well-known for her children’s literacy foundation and other major gifts to charity.

Tip: Make a budget for what to spend “for fun” as well as what to give away.

To quote Oprah Winfrey, “I hope the way you spend your money is in line with the truth of who you are and what you care about.”