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Warren Buffett may have billions of dollars under his belt, but unlike other celebrities and financial gurus, he prefers to live his life simply, for the most part.

The investment icon practices what he preaches about financial discipline, savings, and debt repayment.

Buffett gave an early warning last May about today’s higher prices when he told a live audience of over 28 million people at the Berkshire Hathaway annual meeting that “inflation substantial “was already hitting companies.

When one of the world’s most successful investors is worried about rising prices, it’s probably a good time to apply proven strategies to tighten their belts. Here are nine ways Buffett’s frugality can help you save and spend wisely.

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1. He lives in the same house he bought in 1958

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While most billionaires rack up expensive real estate, Buffett initially paid US $ 31,500 for his Omaha, Neb home, that’s about US $ 289,000 in today’s dollars – and there is lived during over 60 years .

His house is not tiny, however. The 6,570 square foot, five bedroom home has undergone extensive renovations and additions over the decades and is now worth around US $ 1 million. He’s also protected by fencing and security cameras, and probably has a good home insurance policy.

Buffett has no plans to move, calling the house “the third best investment I’ve ever made” in a 2010 letter to Berkshire Hathaway shareholders.

2. He rarely takes out loans

Buffett’s one-time mortgage was for a vacation home in Laguna Beach, Calif., Which he bought in 1971, though he certainly had the money to afford the US $ 150,000-listed seaside property.

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He told CNBC he took out the 30-year mortgage because “I thought I could probably do better with the money than have him buy the house on equity.” He decided to use the extra money available for shares in Berkshire Hathaway, the company that brought him billions.

Buffett’s argument about not locking in capital still resonates. And if you own your home, you have the option of freeing up some of your principal by quickly refinancing at today’s historically low rates before they increase this year, as forecasters predict. One change can save you thousands of dollars a year.

3. He buys cheap breakfast

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While Buffett might just ask a personal chef to cook him a gourmet breakfast, he often catches Mickey D on his way to work. He says he doesn’t like spending more than $ 3.17 on his morning meal.

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“When I’m not feeling so prosperous, I can go for the $ 2.61, which is two sausage patties, and then I put them together and pour myself a coke,” he said in the 2017 HBO documentary. Become Warren Buffett . He continues, “$ 3.17 is a bacon, egg and cheese cookie, but the market is down this morning, so I’m going to drop the $ 3.17 and go for the $ 2.95.”

Instead of going out to eat or buying a latte at Starbucks every day, make your own breakfasts and coffee. You can also get a little extra cash by signing up for a cash back app that gives you real cash back, not points, on your purchases.

4. He buys marked down cars

Many billionaires and millionaires keep a collection of flashy sports cars and vintage models in their garages, but Buffett would prefer the repaired automobiles he can acquire at discounted prices.

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He switched from his 2006 Cadillac DTS to a Cadillac XTS for just US $ 45,000 in 2014. “The truth is, I only drive about 3,500 miles a year, so I buy a new car very rarely. He told Forbes.

Whether you go for a new car or a slightly used one, emulate Buffett by spending within your limits. This means that you won’t want to go for the first loan you spot and you should be looking for better deals. A good habit is to quickly check auto insurance rates every six months.

5. He doesn’t splurge on brands

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Buffett doesn’t care much about designer costumes or the latest iPhone model – he leaned on his $ 20 flip phone for years before trading it in for the Apple smartphone in 2020.

Buffett avoids unnecessary spending and once said, “Don’t keep what’s left after you’ve spent, but spend what’s left after you’ve saved.” “

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Put your funds in a high yield savings account or in a diversified investment portfolio so that the money can grow over time. Set aside your extra cash for an emergency or retirement fund instead of spending it all on non-essential purchases.

6. He no longer invests with borrowed money

“I have never borrowed a lot of money in my life. Never. Never will be. That doesn’t interest me, ”he told Notre-Dame students in 1991.

Although a young Buffett has borrowed 25% of his net worth to buy stocks, he warns investors against repeating the same mistake.

Even skilled stock traders will tell you that borrowing to invest can be risky. And there’s no real need to invest in apps that let you start with a small amount of money, like the one that lets you invest using nothing more than your spare currency.

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7. He does what he likes

Buffett attributes part of his success to his passion for investing. “You have to like something to do well,” he says, urging people to take jobs they love, instead of jobs that look good on your resume.

Even if you can’t quit your full-time job to focus on the things you really love, you can certainly find the time for affordable hobbies. Buffett himself enjoys card games and playing the ukulele.

And if you are looking for a way to increase your income, to capitalize on your skills and your hobbies, try setting up a side activity, like being a mystery shopper.

8. He finds creative ways to save money

When Buffett’s first child was born, he transformed a dresser drawer into a cradle. For his second, he borrowed a cradle.

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“If you buy things you don’t need, you’ll soon be selling things you need,” says the billionaire.

Take a close look at your finances and figure out what you can cut back. Get a library card and borrow books and movies instead of buying them. Read some smart tips for saving money.

9. He uses cash, not credit

While most of us prefer the convenience of a credit card for our daily purchases, Buffett uses hard cash.

He told Yahoo Finance editor Andy Serwer in 2019 that he used cash “98% of the time. If I am in a restaurant, I will always pay in cash. It’s just easier. While the method may seem a bit old-school, relying less on your credit card can help you avoid spending money you don’t have.

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Using most of your available credit and falling behind in your monthly payments damages your credit score. If you are having trouble paying off your credit card debt, you might consider consolidating it into a debt consolidation loan with a lower interest rate.

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