Warren Buffett is an American businessman, and philanthropist, who, according to Forbes.com, is worth a staggering 137.5 billion dollars.
At 93 years old, with billions of dollars in the bank, Mr. Buffett might want to slow down, however, he is still the Chairman, and CEO of Berkshire Hathaway, which he also co-founded.
If you are going to take financial advice from anyone, Warren Buffett might know a thing or two about, wealth, how to generate it, and how to keep it.
Here are 18 lessons from Warren Buffett on how people waste their money:
Buying Brand New Cars
As one of the richest men on earth, you might expect that Warren Buffett would be advocating for all kinds of luxury, including flashy new cars, however, Mr.Buffet’s advice is clear; new cars depreciate so much the moment that you drive them out of the showroom, that it’s simply a bad financial move to buy a brand spanking new car.
Opting for a used car in good condition is a much smarter move.
Designer Brands
Warren Buffett doesn’t see the point in paying over the odds for something, just because of what it says on the label, instead, he recommends buying quality products, that are half the price, but do just as good of a job as designer names.
High-Interest Debt
Mr. Buffett has always strongly advised against the use of high-interest debt such as credit cards. He suggests paying off credit card debt as soon as possible, and, if you must borrow money, instead opt for a low-interest loan that you can manage to pay off in a few years.
Housing Costs
Buffett warns of falling into the trap of trying to “Keep up with the Joneses,” by purchasing a big, expensive house that might look great from the outside, but which will no doubt cost a lot to actually live in on the inside.
Buffett himself leads by example on this point, and despite his billionaire fortune, lives in a modest home.
The Latest Tech
People are addicted to upgrading their technology, whether it’s their phone, their computers, or their TVs, and Warren Buffett sees this as a needless waste of money. If something is functioning well, save your hard-earned cash, and instead of reaching for the latest phone upgrade every year, let that money upgrade your bank account instead.
Excessive Dining Out
Eating out can be expensive, especially as we are in the midst of a cost-of-living crisis. Therefore, Warren Buffett advises that simple home-cooked meals are the best option for saving money.
Gym Memberships
If you are training to compete as an athletic bodybuilder, then we can maybe justify your $50 per month gym membership as you will probably be training daily. However, if you’re like the rest of us and only go to the gym now and then, why are you paying an extortionate amount of money for something that you hardly use?
Expensive gym memberships are another way that people waste money, and there are plenty of cost-effective ways to exercise that are completely free like running, cycling, walking, and dancing.
Get Rich Quick Schemes
Everyone wants to take a shortcut to get rich, however, Warren Buffett advises that get-rich-quick schemes can be risky, and could cause you to lose money. Instead, Buffett advocates for making long-term, well-informed investments that generate sustainable wealth, over time.
Expensive Fashion
A lot of people waste their, money on clothes, and try to keep up with the latest fashion trends, however, according to Mr. Buffett, this will leave a dent in your bank balance, which is never in Vogue.
Instead, Warren Buffett prefers a simple wardrobe, with classic, quality pieces, as true style never goes out of fashion darling.
Subscription Services
Have you ever added up how much you are spending per month on subscription services? We bet that if you did, you might be in for a bit of a shock. It might not seem like much, but, whenever you add up Netflix, Amazon Prime, online magazine subscriptions, etc, it does all add up.
Accumulating subscriptions can drain your finances, so it’s good to regularly review these, and cancel anything surplus to requirements.
Expensive Socialising
We all like to hang out with our friends, and it’s good for our health to maintain positive social bonds. However, it is not so good for our bank balances if we are regularly splashing cash on fancy cocktails, in posh bars.
There are lots of cost-effective ways to remain social at half the price. For example, have a garden party, organize a cookout, and make your own cocktails. Money saved. Problem solved.
Education and Learning
Warren Buffett believes that learning leads to earning, and he advises that by investing in your own education, and skills, you are also investing in your financial future.
Smoking
Warren Buffett sees a smoking habit as a big waste of money. Not only is smoking detrimental to your physical health, but in Mr. Buffett’s eyes, it’s also detrimental to your financial health.
The fact is that cigarettes are expensive, and having to constantly spend money on something which is ultimately degrading your life, instead of enhancing it, is a complete waste of money. We suggest that you listen to Warren Buffett, and quit while you’re ahead.
Relying Too Much on One Income
A typical entrepreneur like Warren Buffett believes that relying on only one income stream is risky business. Instead, Buffett advocates for having several incomes so that if one fails, you have another to fall back on.
This can save you money in the long run, as you won’t have to deal with any drastic drops in your income or suffer charges from missed payments as a result.
Spending V’s Saving
A famous quote from Warren Buffett is “Do not save what is left after spending, but spend what is left after saving”. This is a different perspective as most people only save what’s left over after all their monthly spending. But Buffett suggests that you should incorporate a monthly savings amount into your budget, and then feel free to spend what’s left after that.
Excessive Gift-Giving
Whether it’s a friend's birthday, Christmas time, or a romantic anniversary, some people go a little over the top with gift-giving and try to use the giving of expensive gifts as some kind of status symbol.
However, Warren Buffett advises against trying to impress others with costly gifts, and he instead advocates for living within your means. A well-thought-out, unique gift that’s cheaper will mean a lot more to someone than a generic trendy gift anyway.
Expensive Beauty Treatments
While self-care, and looking after our appearance are important, sometimes our grooming budget can get out of hand. For example, if you’re a woman with a standing blow dry appointment that costs you $50 a week, and you are complaining that you can’t save any money; by simply drying your own hair, you’ll be saving $200 per month.
Furthermore, the beauty industry will tell you anything to get you to part with your hard-earned cash, and promises of youth from a face cream that costs $100 are rarely as good as they seem. A more sensible bet is to look after your diet and get some good sleep, and you might find that you don’t need that $100 face cream after all.
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