Self-made millionaire Bethenny Frankel's top spending advice: 'It has to be an investment'

John Lamparski

Over her decades of entrepreneurship, self-made millionaire Bethenny Frankel has walked the fine line between being a spender and a saver.

The Skinnygirl founder and "Real Housewives of New York" alumna says her habits don't regularly fall into either category. Rather, she says she's developed a sense for knowing when to splurge: Motivated by an intolerance for wasting money, she tries to only spend when the purchase feels "like an investment."

"I don't mind spending money ... but it has to be an investment," Frankel tells CNBC Make It. "I'll spend on high-quality items like luxury goods, but it has to be something you're holding [for longevity]. It could be a watch. It could be a purse."

Frankel says the philosophy applies to purchases big and small. She won't buy a house, for example, unless she thinks it'll offer a large return on investment, especially through renovations. And whenever she decides to spend – or if any of her investments start trending downward – she plans accordingly, to make sure it won't dent her savings in a significant way.

"I always make sure I have a nest egg of savings," she says. "That way, I can still spend when [the market] is a little gnarly or if I'm renovating a bunch of homes, but I consciously will buy less of other things. Spending and saving are an ebb and flow."

The method isn't a one-size-fits-all strategy: Although a higher upfront cost sometimes results in longevity, which potentially saves money in the long run, you still need enough disposable income to spend on luxury items or pricey consultants to follow Frankel's lead.

Notably, Frankel says she's recently loosened the strict spending habits she used to build up her wealth, because she's achieved her main savings goal: setting aside an inheritance for her 12-year-old daughter, Bryn Hoppy.

That goes against the usual advice. Experts typically recommend increasing your retirement savings over time. In May, former Head of Retirement Solutions for JPMorgan Asset Management's Solutions Anne Lester wrote for CNBC Make It that she typically tells "people to aim to replace 70% of your annual pre-retirement income, at minimum." If you plan to travel a lot in the years post-career, that percentage should be higher, she added.

But Frankel says she'd rather reap some of the rewards of her frugal youth while she can. "I'm sensible, but as I get older, the more I spend," she says. "I can lean into what I've saved up, and I'm not working just to leave money for the next generation."

Frankel's "save now, spend later" financial strategy mimics the career advice she gives young people. Last month, she told CNBC Make It that young people should work their hardest in their 20s, when they have the most energy and the least amount of responsibility. In both instances, Frankel says building proactive and diligent habits from a young age will allow you to live more comfortably later in life.

These lessons are hard-won from her own personal experience, she says. For example, years ago, Frankel says she checked off the wrong box on a tax form, and the simple stroke of a pen on the contract cost her millions of dollars. In retrospect, she notes, paying for expensive legal guidance would have functionally saved her a lot of money.

"I didn't have fancy business managers at the time, so again, you get what you pay for," Frankel says.

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