Warren Buffett Says This Is the Biggest Mistake People Make With Their Money

Don't fall into the same trap.

Many people have the goal of being financially secure. But to achieve that, you'll need savings -- both for emergencies as well as retirement. 

The problem, though, is that many people don't prioritize their savings, and instead figure saving money is something they'll do when the opportunity presents itself. But if you ask investing giant Warren Buffett, that's a huge mistake.

A financial trap you want to avoid

Buffett is a billionaire many times over. And he's gotten to that point not just by investing in a savvy manner, but also, by living frugally. In fact, Buffett still owns his original home he purchased in 1958, even though he could have easily upgraded to a mansion or 20 by now.

Meanwhile, Buffett insists that the biggest mistake people make with their money is not getting into the habit of saving it. And if that's a trap you've fallen into on more than one occasion, then it's time to change your ways.

Put your savings first

Some people take the attitude that they'll try to save money, but if it doesn't work out in a given month, so be it. But it's that approach that could really get you into trouble and cause you to fall behind on your goals. 

That's why a better bet is to put the process of saving money on autopilot. That way, you'll make savings a priority and avoid falling behind.

If you don't have enough money in your savings account to cover three to six months of essential living expenses, then your first priority should be to build up an emergency fund. And in that case, you should set up an automatic transfer so that money from each paycheck you receive goes from your checking account to your savings account before you get a chance to touch it. That way, you won't miss that extra money, but you'll also make sure it's going to the right place.

Once you're all set with emergency savings, you can focus on building yourself a nest egg for retirement. In that regard, you can sign up for your employer's 401(k) plan and have contributions deducted from your paychecks automatically. Or if you don't have access to a 401(k) plan, you can find an IRA with an automatic savings feature and effectively arrange for the same setup as an automatic transfer from checking to savings. 

Don't set yourself up for disaster

Not having emergency savings could drive you into serious debt if an unplanned bill arises, or if you wind up out of a job. And not having a retirement nest egg could leave you cash-strapped and unhappy as a senior. That's why it pays to avoid the trap Buffett has called out -- not getting into the habit of saving money.

Automating the process of saving is the best way to overcome the obstacles that may have been holding you back. And it could lead the way to a lot more financial stability in both the short term as well as the long term.