- Warren Buffett is a billionaire who doesn't have to pinch pennies.
- Despite his wealth, he's known for the relatively modest lifestyle he upholds.
It pays to give these a try.
Warren Buffett is unquestionably one of the most successful investors of our time -- and one of the wealthiest people in the U.S. But despite the fact that he's a billionaire, he tends to live a very frugal lifestyle. Here are five habits he's known for that could work wonders for you.
1. Living in the same home for years rather than upsizing
Buffett could probably afford any home for sale in the U.S. right now. Instead, he continues to live in his modest home in Omaha, Nebraska -- the one he purchased for $31,500 back in 1958. Many people buy starter homes and upsize a few years later, once they've built up some equity in the properties they own. But if you stay in a less expensive home, you'll free up a lot more money for other things, including investments.
2. Avoiding loans when possible
You may have no choice but to take out a mortgage to finance a home purchase. But when it comes to smaller expenses, you're better off saving up for those purchases rather than paying money to finance them over time. Say you want to upgrade some furniture that costs $3,000, but you don't have the cash. Financing that purchase could leave you paying $3,600 at the end of the day, thereby spending an extra $600 for no good reason.
3. Not spending a lot on restaurant meals
Buffett tends to be frugal when it comes to spending money on prepared meals. And if you go the same route, you could save quite a bit. Restaurants are notorious for imposing large markups on the items they serve, so the simple act of buying groceries and cooking at home could work wonders for your finances.
4. Not buying the fanciest cars
Buffett doesn't have to skimp on luxury when it comes to owning vehicles. But you won't see him driving the flashiest cars around. And if you keep your car payments to a minimum, you'll have more freedom to keep saving, investing, and building wealth. Plus, cars have a tendency to lose value over time rather than gain it, so a higher-end vehicle may be something you'd like to have, but it certainly isn't a good investment.
5. Not sticking to name-brand purchases
Buffett isn't known for his designer wardrobe. And so if budget suits are good enough for him, perhaps you'll decide they're good enough for you, too. Avoiding name-brand products could save you a lot of money not just on apparel, but also, on everything from groceries to household essentials to medications.
It pays to follow Buffett's lead
Buffett is not someone who has to worry about spending an extra $6 at the supermarket or $7,000 at the auto dealership. Despite his financial status, he makes a point to not be wasteful or spend money needlessly. And if you want to achieve your financial goals, it pays to mimic some of the habits that have helped Buffett get to where he is today.
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