Want to Save Money? Try Living Like Notoriously Frugal Warren Buffett for Awhile

Warren Buffett certainly doesn’t need to pinch pennies, but the billionaire has some great advice on how to do so, and some other brilliant tips for building wealth
Last updated June 9, 2023 | By Laura Gesualdi-Gilmore Edited By Jeff White
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Despite his exorbitant wealth, Berkshire Hathaway CEO Warren Buffett has some surprisingly simple advice on how to get ahead financially and build wealth.

The 92-year-old investor and philanthropist has a net worth of around $118 billion, according to Forbes, and he is one of the wealthiest people on the planet. Buffett’s financial advice is surprisingly practical, and he often gives guidance that works for all.

Here are 14 brilliant things Buffett can teach you about money.

Stay in the same home

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Many would assume a billionaire of Buffett’s caliber would eat up prime real estate — perhaps buying a few homes in the priciest areas around the world.

However, Buffett sees the benefit in living modestly. In fact, he’s spent more than 60 years living in the Nebraska home he bought for just over $31,000 in 1958.

The billionaire apparently sees no reason to upgrade when the five-bedroom home meets all his needs. This is a practical attitude to adopt for people looking to build wealth.

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Opt for cheap food you enjoy

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It’s not all lobster and caviar for this billionaire. In the past, Buffett has claimed that he eats “like a 6-year-old.”

That may include a packet of Oreos for breakfast or a pit-stop at McDonald’s when he’s feeling a bit famished. Buffett’s philosophy tends to resolve around not splurging where it’s not needed.

A recession is a great time to invest

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For those looking to make some quality investments, a recession doesn’t have to be a financial disaster.

In fact, in a 2008 opinion piece for the New York Times, Buffett wrote that, “bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.”

Buffett also stressed the importance of patience, noting that buying during a recession can help investors avoid high prices so long as they are willing to sit with their purchases and wait for the market to turn.

Keep your car as long as possible

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Buffett is not the type of billionaire to show up with an extravagant new car every month — or ever.

In fact, he told Forbes back in 2014 that he drives so infrequently that he looks for bargains when buying cars, and then keeps the vehicles for as long as possible.

In a BBC documentary, Buffett’s daughter Susie even said her father will keep cars for so long that she eventually has to tell him his wheels are “embarrassing” and it’s time to upgrade.

Wait to buy a home

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Buying a piece of property is obviously a good investment for anyone who is expecting to stay in the same area for a significant amount of time.

However, Buffett advises against purchasing a home before you’re ready to avoid being “cleaned out.”

During a 1998 Berkshire Hathaway shareholders meeting, Buffett told a story about how he decided to hold off on buying his first home himself until the down payment was about 10% of his net worth.

Avoid credit card debt

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Buffett has gone on record many times advising anyone looking to grow their wealth to get rid of credit card debt first.

Many Americans carry credit card debt and don’t often think about how much monthly interest payments add up but paying down debt is an important step one. Buffet advises to stop wasting money.

“If I owed any money at 18% [interest], the first thing I’d do with any money I had would be to pay it off,” Buffett said during the Berkshire Hathaway annual shareholders meeting back in 2020. “It’s going to be way better than any investment idea I’ve got.”

Don’t go designer

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Why splurge on designer goods and clothing when you could go for quality instead? Buffet prefers to look for well-made goods that he can get a lot of use from.

For example, when it comes to his suits, Buffett prefers to buy from the Chinese creator behind Dalian Dayang Trands: a woman named Madam Li who impressed him with her entrepreneurial spirit and excellent suits.

Clip coupons

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No matter how far you go in the business world, there’s value in jumping at a good deal. Despite Buffett’s massive wealth, he’s been known to pull coupons out of his pocket.

Longtime friend and Microsoft co-founder Bill Gates wrote about a particular experience in 2017 when the pair pulled up to a McDonald’s and Buffett offered to pay with some coupons he had stashed away for the meal.

If it ain’t broke, don’t fix it

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One of the running themes you’ll notice if you read up on Buffett’s financial advice is to avoid unnecessary upgrades.

He’s lived in the same house since the 1950s, rarely buys new cars, and has remained in the same Omaha, Nebraska, office building since he started working at Berkshire Hathaway in the 1960s.

Be resourceful to avoid unnecessary spending

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Anecdotes about Buffett’s past suggest that he sees a real value in learning to be thrifty — sometimes in the extreme sense.

In Roger Lowenstein’s 1995 biography of the billionaire, Buffett: The Making of an American Capitalist, he recounts that Buffett used a dresser drawer as a bassinet for his first child. Then, he borrowed a crib for his second one.

These are just two examples of the famously frugal businessman pinching pennies anywhere he could.

Smart money habits can be learned

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In a 2007 speech at the University of Florida, Buffett discussed the importance of good habits — especially good financial habits.

Those looking to meet money goals, like saving a certain amount or devoting a percentage of income to investments, should take a close look at their finances and see if any habits can be changed.

Money saving habits don’t need to be complex either. Maybe you can get in the habit of picking up takeout meals instead of ordering delivery. Every little bit helps.

Invest in yourself

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Buffett also advises those looking to build wealth to invest in themselves whenever possible.

Anything you can do to make yourself more valuable — whether that is earning another degree, getting a certification, learning a new skill, or even taking care of your health — can (and likely will) pay off down the line.

Avoid temptation to invest everything

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Buffett advises against putting everything you have into investments.

Last year, in a letter to Berkshire Hathaway shareholders, the billionaire noted that the company always holds at least $30 billion in cash and cash equivalents.

Why? Because they always want to have the cash they need on hand so the company, their creditors, insurance claimants, and shareholders can all “sleep soundly.”

Make long-term money goals

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Buffett stresses long-term goals when it comes to both investing and building wealth.

The billionaire once famously wrote, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes,” in a 1996 letter to shareholders.

Financial challenges are normal and should be expected. Buffett strongly advises against jumping ship on an investment the second trouble nears and instead, thinking about financial goals as lifelong commitments.

Bottom line

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Buffett is famous for making wise investment choices that have landed him a coveted spot on the list of the wealthiest people on earth.

However, his savvy financial tips — most of which revolve around finding creative ways to keep more money in your wallet — can be adopted by anyone looking to build wealth.

The biggest takeaways from Buffett’s financial philosophy are probably just to avoid spending when it’s not absolutely necessary and stay devoted to investments for the long haul.

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Author Details

Laura Gesualdi-Gilmore Laura Gesualdi-Gilmore is a seasoned freelance writer who also teaches writing courses at Rutgers University. She's based in Jersey City and enjoys travel, live music and, of course, spending quality time with her pup.