Everyone knows Warren Buffett is one of the richest people in the world and the greatest investor of all time. What few people know is that he is also a master of his personal finances. He is an unusual billionaire as he has always enjoyed intellectual pursuits over material possessions. He prefers simplicity and an easy life over complexity and owning a lot of things.
When asked why he doesn’t own a yacht, Buffett replied, “Why would I want to own a yacht? All my friends have yachts.” He has said he never wanted a yacht because he would not want to deal with managing the crew to maintain it.
That fact that Buffett prefers watching Nebraska college football wearing jogging pants while eating popcorn over owing a yacht and dealing with a crew of employees sums up his lifestyle. One of the things he loves most is playing bridge on the computer or with friends, this is a very cheap hobby.
Let’s take a look at Warren Buffett’s personal finance habits that we can learn from.
1. You don’t have to upgrade your house.
Warren Buffett still lives in the house he bought for $31,500 in 1958. Inflation adjusted to 2022 dollars it cost him $323,510 in 1958 buying power. His house is a 6,570 square feet stucco house that has 5 bedrooms and 2.5 bathrooms.
This is a huge house by any standard but he bought it as a millionaire and kept it even when he was the richest person in the world. The lesson is we can buy a house we like that’s big enough early on and it’s where we want to live and keep it for the long-term. If you buy the right house to begin with there is no reason to upgrade if you are happy there.
“And if I could spend $100 million on a house that would make me a lot happier, I would do it. But, for me, that’s the happiest house in the world and it’s because it’s got memories, and people come back, and all that sort of thing.” – Warren Buffett
2. Avoid debt
Buffett has lived a debt free life. He did take out a loan for his second home in California that he owned for a while but only because he thought he could make more money with it in investments than sitting in the beach house. He also thinks about how much more money he could have made if the money he used to buy his first home would have instead gone into Berkshire-Hathaway stock.
He avoids debt but does do the math for opportunity cost. He shows we don’t need to leverage debt to become wealthy we just need to build the right companies and own the right stocks.
3. Eat cheap and convenient food options.
This will be one of the few times you will see a recommendation in personal finance to eat fast food. This is Buffett’s habit and has been for most of his life. He loves the cheaper things in life like McDonald’s cheap breakfast menu, Dairy Queen, and Coca Cola. He uses the drive through window and loves getting a McDonald’s breakfast on the way to work most days. He probably loves that it’s easy, cheap, and tasty.
He keeps eating simple and fast. Just like Steve Jobs and Mark Zuckerberg don’t like to spend a lot of time deciding what to wear, Buffett doesn’t want to decide on breakfast every day.
4. The car you drive isn’t important.
Buffett previously drove a 2006 Cadillac DTS from 2006 until 2014 even after it was eight years old. He only decided to finally trade it in after his daughter Susie told him that it was embarrassing to be driving such an old car. He did finally replace it in 2014 with a new model Cadillac XTS, which had an original starting price of US $44,600. So Buffett chose a car that is also driven by many upper income American families. He values simplicity and comfort over any need to show off.
He could have any car he wanted and he sticks with what he knows and is comfortable with. Also unlike most Americans he has no desire to upgrade his car or even buy a new model if the one he has is working perfectly fine. Too many people spend way too much money on new car payments and trade in their car too often. Warren Buffett could car less about the car he drives, it’s just for getting him comfortably from point A to point B.
5. He buys quality not brands.
The suits Warren Buffett wears are high quality and durable but they aren’t famous brands. He wears suits by Madame Li. 
Choose quality and comfort over brand names and showing off.
6. Don’t invest with borrowed money.
Warren Buffett once used 25% margin for his investing but now advises against it. He doesn’t believe the added risk of leverage that borrowed money gives you is worth the danger. He believes it’s better to just invest the money you have and let compounding returns grow your capital.
7. Get a job you love.
“There comes a time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. I think you are out of your mind if you keep taking jobs that you don’t like because you think it will look good on your resume.” – Warren Buffett
We have a much greater chance of success if we do what we love and are passionate about for a living. We will bring more energy to jobs we love and have a greater chance of success.
8. Avoid wasteful purchases.
“If you buy things you do not need, soon you will have to sell things you need.” – Warren Buffett
Buffett is against wasting money, he was very frugal when he started out in life and understands the danger of getting in trouble with bad spending habits when it’s so hard to pay living expenses.
9. Use cash when possible.
Buffett likes to carry cash and use it for purchases instead of debit and credit cards. One reason is that it limits spending to what you have on you and also you feel the value of the exchange more when giving away currency versus swiping a card.
10. Use coupons.
Some frugal habits are hard to stop. One time when Warren Buffett and Bill Gates were eating together at a McDonalds in Hong Kong, Buffett offered to pay. He used coupons. If the richest people in the world use coupons when eating together in a fast food restaurant why wouldn’t we?
11. Don’t smoke or drink.
People are amazed at Warren Buffett’s good health and mental sharpness at 92 years old even though he enjoys fast food and junk food so much. Three of his health secrets are that he moderates the quantity of calories he eats, he doesn’t smoke cigarettes, and he doesn’t drink alcohol.
Smoking and drinking are very expensive habits on your physical health as they tap your energy and mental clarity over time. Not to mention the possible medical bills chain smoking and alcoholism can lead to. These are two bad habits to avoid for a long and healthy life. It’s easier to not smoke or drink if you are happy in your career.
12. Look for sales on stocks and products.
Warren Buffett not only thinks that stocks should be purchased when they are on sale but also that all products should be bought at a discount. Since he is in no hurry to spend his money on investments or consumer goods he can wait to get the best price possible He is a big believer in timing all purchases to correlate with good sales.
13. Avoid gambling.
Buffet only invests and makes bets when the odds are in his favor. He doesn’t believe in emotional gambling with the odds against you. He wants high probability bets with great risk/reward ratios with minimum risk to the downside. You will never see Buffett gambling in a casino, you are more likely to see him own the casino.
14. He doesn’t upgrade technology until he needs to.
Buffett did not upgrade his flip phone to an iPhone until 2020. Buffett’s office is full of reading materials and doesn’t have a computer. He doesn’t use email. The Berkshire-Hathaway website looks like it was built in 1999 and never upgraded. With all the opportunities technology has created over his lifetime he has never felt he needed to use it. His tools of wealth creation is information found in financial reporting, newspapers, math, accounting, and his mind.
It can really make us question how much of the technology we use isn’t needed.
15. He is not a fan of spending a large amounts of money.
Buffett is frugal to his core. He did not spend money on a large wedding to his second wife. He never bought a yacht. He never bought a huge mansion. He has never owned an expensive sports car. With enough money to do whatever he wanted he chose to stay living in the same house, playing bridge, and watching college football.
We can learn a lot about our own foolish spending habits from the world’s most frugal billionaire.
He said his one guilty indulgence is that he loves the convenience of private jets, so much that he bought Netjets. He doesn’t own a jet, he uses their service to keep it simple. He loves how easy flying in a private jet is and doesn’t do it to show off.
Warren Buffett has never felt the need to try to impress anyone.