These millionaires live the 'underconsumption' life, drive second-hand cars, rarely buy clothes

While Saavedra’s life bears hallmarks of a high-income household—such as her children attending private school and her ownership of a property in New York—these expenditures align with her financial philosophy: prioritising investments in education and assets that further philanthropic goals.

Saavedra, who held corporate roles at CVS and Victoria’s Secret before becoming an entrepreneur, told Fortune that she and her husband drastically reduced their expenses early in their careers. Living in a rent-controlled apartment in New York with unreliable plumbing, they saved one of their two incomes in preparation for starting a family.

“Underconsumption has to have a purpose,” Saavedra explained. “If you just do it for the sake of saving, you’ll burn out. For us, the goal was financial freedom and family, which made it worthwhile. Of course, I’m tempted by luxury items, and occasionally we indulge in a nice date night, but understanding the ‘why’ behind your choices keeps you grounded.”

Saavedra’s underconsumption habits extend to the festive season, during which her expenses rise only due to philanthropic gifting, a stark contrast to the 58% of Americans who report financial stress during the holidays, according to a Harris Poll.

Annie Cole, a 36-year-old personal finance expert and researcher, has also embraced a minimalist lifestyle despite owning assets worth over a million dollars and earning a six-figure income. By cutting monthly household expenses to under $4,000—well below the US average of $6,440 in 2023—Cole has significantly advanced her financial independence.

She sold her car, batch cooks meals, and shops for clothes three times a year at Goodwill, with her last new purchase being a gift card-funded item over a year ago. Holidays are funded through air miles accrued during her previous corporate role, and leisure activities include free pursuits such as hiking and swimming.

Cole has pencilled in retirement for her early 40s but acknowledges that her current part-time work already feels like semi-retirement. “Knowing that I could retire is a financial cushion in itself,” she said. “I’m living the flexibility now, working less and doing the things I love—it’s a blessing.”

For Robert Chin, a dentist in Las Vegas, the shift to an underconsumption lifestyle was driven by rising costs and a desire to align spending with long-term financial goals. Chin and his partner, Jessica Pharar, who run a dental practice together, now limit dining out to once or twice a month and buy groceries in bulk from Costco to mitigate inflation.

The couple prioritise durability in their purchases, choosing clothing brands with lifetime guarantees, and rent their home to retain flexibility for future property investments. “In five years, we hope to bring in another practitioner to allow us more time off,” Chin said. “As business leaders, it’s challenging to take breaks because if we’re not working, the practice doesn’t generate income.”

The underconsumption trend has also gained momentum on platforms like TikTok, where users share their frugal habits as a counter-narrative to the rampant consumerism often displayed online. Popular practices include setting no-buy challenges, decluttering spaces, and sharing cost-effective shopping tips.