What Warren Buffett’s Living Situation Can Teach Those Who Live Beyond Their Means
Written by
Laura Bogart
Edited by
Kristen Mae
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With an estimated net worth of $141 billion, Warren Buffett’s name is practically synonymous with wealth. Yet you wouldn’t know it by the way he lives his life. He famously eschews designer brands, clips coupons, and even held onto his old flip phone until 2020.
Even if you can’t hope to earn as much as Buffett has in a lifetime, you can still benefit from his wisdom on living below your means. Being frugal doesn’t have to mean settling for less. In fact, it can mean getting strategic about how you spend and prioritizing saving — and it’s easier to do than you think.
Buffett’s frugal living hacks aren’t just memorable quirks. They’re guiding principles for how to keep your expenses under control.
Don’t Keep Up With the Joneses
Buffett’s insistence on living in the same Omaha, Nebraska, home for more than 60 years is often seen as an example of extreme frugality. (He purchased it in 1958 for $31,500.) While he has understandably made some renovations and additions — including investing heavily in security — it also shows how he’s resisted the trend to live like others in his income bracket.
Other millionaires and billionaires likely feel pressure to load up on real estate and live in the world’s most expensive cities, but Buffett prefers to stay put. You can learn from that, especially as you watch your own friends and family move to pricier neighborhoods or trade up to more expensive real estate. It can be tempting to want to try to keep up. Instead, focus your time, energy and money on improving your current home, provided it meets your needs.
Focus on Value Instead of Appearances
Buffett also isn’t interested in splurging on designer suits or the latest gadgets just for the sake of dazzling other people. You can take a page from his playbook by choosing well-made store brands or older, well-reviewed electronics. If you don’t need a phone with cutting-edge features, don’t spend top-dollar on the newest model.
Buffett’s famed frugality also extends to cars. He’s well known for purchasing slightly damaged vehicles at a reduced price — such as cars with hail damage — and having them repaired for far less than the cost of buying new. Similarly, you can search for high-quality treasures that might not look perfect but still perform well.
Get Creative About Saving
One of the more comical pieces of Buffett lore is that when his first child was born, he converted a dresser drawer into a bassinet. It’s a perfect example of his willingness to think creatively to save money. If you can safely make something for yourself, why not give it a shot?
Shopping locally and supporting small businesses instead of big-box retailers can also be a fun way to cut costs while still finding useful items. There are also “Buy Nothing” groups, where neighbors give away gently used items for free. What someone else no longer needs might be exactly what you’re looking for.
Use Cash Instead of Credit
Another of Buffett’s frugal habits is using cash instead of credit whenever he can. His reasoning is simple: Spending only what you physically have on hand can help limit impulsive spending and keep you out of debt. While credit cards can offer convenience and perks, sticking with cash for discretionary spending can help you stay disciplined and stick to your budget.
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