In this blog post, we will discuss some of the frugal living habits inspired by none other than the Oracle of Omaha, Warren Buffett. Even as one of the wealthiest people in the world, currently worth $105 billion, he has continued the habits he mastered in the art of living within his means and investing wisely. Let’s dive into his 15 frugal living habits that you can implement as soon as possible in your own life to save money and increase your net worth.

1. Choose a career you love

Warren Buffett emphasizes the importance of choosing a career you’re passionate about. You’re more likely to perform well and earn a good income when you love your job. This helps you live frugally, as you won’t be tempted to make impulse purchases to compensate for unhappiness at work.

“No CEO has it better; I truly do feel like tap dancing to work every day.” – Warren Buffett

2. Marry someone that shares your financial values

Buffett was married to his first wife for over 50 years until her passing in 2004. Warren has been happily married to Astrid Menks since 2006. A strong marriage is built on shared values, including financial ones. Marrying someone who shares your frugal mindset can help you work together to achieve your financial goals.

3. Don’t invest with borrowed money

Buffett has always warned against borrowing money to invest. Borrowing money exposes you to the risk of losing more than you initially invested if the market turns against you. Instead, focus on saving and investing with your own money.

“I’ve seen more people fail because of liquor and leverage — leverage being borrowed money,” Warren Buffett said in a 1991 speech at the University of Notre Dame. “You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.”

4. Buy a house based on what you need

Warren Buffett still lives in the same modest home he purchased in 1958 for $31,500. He advises buying a house based on your needs, not on what you can afford. This approach can save you from overspending on housing and allow you to invest the difference elsewhere.

5. A car is just for transportation

Buffett is known for driving older, modest cars instead of flashy luxury models. He believes a car is simply a means of transportation, not a status symbol. Save money by purchasing a reliable and fuel-efficient vehicle that suits your needs. Buffet currently owns a modest 2014 Cadillac XTS he bought new and kept.

6. Be careful with loans

Warren Buffett cautions against getting into unnecessary debt. If you must take out a loan, do so for essential purposes only, such as buying a house or paying for education. Ensure you can afford the monthly payments and aim to pay off the loan quickly.

“If you buy things you do not need, soon you will have to sell things you need.” – Warren Buffett

7. Focus on quality over brand name

When making purchases, Buffett advises focusing on quality over brand names. Opt for products that offer the best value for your money, regardless of their brand. This mindset can save you significant money in the long run.

8. Avoid unnecessary spending

Warren Buffett is known for being very mindful of his spending habits. He doesn’t splurge on expensive items just because he can afford them. Instead, he focuses on what brings value to his life and avoids unnecessary expenses. Buffett thinks in terms of needs and values in all his spending habits, regardless of his level of wealth. He hates wasting money regardless of how much he has.

9. Buy food that is a good value

Buffett has a well-known love for affordable, fast food. While you don’t have to eat McDonald’s daily as he does, take his advice and look for good value when shopping for groceries. Stick to your budget and prioritize nutrient-dense, affordable foods.

On his five-minute drive to the office, which he’s been doing for the past 54 years, he stops by the fast-food chain McDonald’s and, depending on how prosperous he’s feeling, orders one of three items: two sausage patties for $2.61, a sausage, egg and cheese for $2.95 or a bacon, egg, and cheese for $3.17. He also orders a side of hash browns and a drink. The total cost of his breakfast is under $5

10. Use coupons

Warren Buffett is known to use coupons when dining out. He understands the value of saving money, even just a few dollars. Embrace the use of coupons and look for deals to reduce expenses.

In Bill and Melinda Gates’ 2017 annual letter, which they addressed to longtime friend Buffett, Bill tells the story of a particularly economical lunch Buffett took him out for years ago.

“Remember the laugh we had when we traveled together to Hong Kong and decided to get lunch at McDonald’s? You offered to pay, dug into your pocket, and pulled out … coupons!” writes Bill.

Old habits are hard to break, but Buffett still likes using coupons.

11. Use cash for purchases

One of Buffett’s long-standing habits is using cash for purchases. When you use cash, it’s easier to keep track of your spending, and it can help you make better financial decisions. By physically handing over cash, you feel the weight of every dollar spent, encouraging you to think twice before making unnecessary purchases. It’s also a surefire way to avoid those pesky credit card fees and potential debt.

12. Shop sales

It’s no secret that he likes to find great value based on his value investing choices and one of the best ways to achieve this is by shopping sales. But don’t be fooled, my friends—just because something is on sale doesn’t mean it’s a good deal. It’s essential to do your homework and compare prices before purchasing. By patiently waiting for sales and being a savvy shopper, you can get the things you need while keeping more of your hard-earned money. Buffett does this with both his investments and personal purchases.

13. Don’t upgrade things before it’s needed

In today’s fast-paced world, it can be tempting to chase the latest and greatest gadgets constantly. But do you need that new smartphone, or are you just trying to keep up with the Joneses? He advises resisting the urge to upgrade things before it’s vital. Not only will this save you money, but it’s also better for the environment, as it reduces waste and consumption. Buffett was still using a flip phone during the financial crises of 2008 and not a smartphone. Once a fan of the $20 Samsung SCH-U320, Buffett started using Apple’s iPhone 11 in 2020.[1]

14. Have a simple wedding

Did you know he married his second wife, Astrid, in a simple ceremony at his daughter’s house? It’s true. A wedding is an important milestone, but it doesn’t have to be an extravagant affair. A more modest celebration can be just as meaningful and memorable. By opting for a simple wedding, you can save significant money and start your married life on solid financial footing.

15. Invest money in things with cash flow

As the “Oracle of Omaha,” he is known for his investment strategies—and one of his top tips is to invest in things with cash flow. When you invest in assets that generate cash flow, you’re setting yourself up for long-term financial success. Dividend-paying stocks, rental properties, and stocks in profitable businesses are all excellent examples of cash-flowing investments. These investments can provide you with a steady stream of income and appreciate in value over time, contributing to your overall wealth. Being frugal in investing can mean not buying things with no intrinsic value or cash flow. You want value for your money.

Summary

Adopting these 15 frugal living habits can make a real difference in your financial well-being. By using Warren Buffett’s filter of value versus price with all the money you spend, you can save money, reduce debt, and ultimately build wealth. Remember, it’s not about how much money you make but how much you keep—these habits can help you keep more of your hard-earned dollars. Like Warren Buffett, you can reap the rewards of a frugal lifestyle and watch your wealth grow. Start these smart habits today, and you’ll be well on your way to financial success.