9 Ways Following Warren Buffett’s Frugal Habits Can Save You Money

9 Ways Following Warren Buffett’s Frugal Habits Can Save You Money

Serah Louis   Mon, September 6, 2021,

He might have billions of dollars to his name, but unlike other celebrities and financial gurus, Warren Buffett prefers to live life simply.  The Oracle of Omaha won't be found living in a mansion in the Hollywood Hills, collecting a fleet of fancy sports cars or dining daily on foie gras and caviar. The investing icon practices what he preaches when it comes to financial discipline, saving and paying off debt.

Simple living can pay off in the inflationary environment that's emerged during the COVID-19 pandemic. Buffett warned a livestream audience of over 28 million during Berkshire Hathaway's May 1 annual meeting that "substantial inflation" is hitting both retail prices and wholesale prices being charged to businesses.

Singling out Berkshire Hathaway's homebuilding investments, Buffett said, “We’ve got nine homebuilders ... we really do a lot of housing. The costs are just up, up, up. Steel costs, you know, just every day they’re going up.”

When one of the world's most successful investors raises concerns about rising prices, it's likely time to apply some well-tested strategies to tighten your belt.

Here are nine ways Buffett's frugality can help you save and spend wisely.

1. He Lives In The Same Home He Bought Back In 1958

While most billionaires bulk up on expensive real estate, Buffett originally paid $31,500 for his Omaha, Nebraska, home — that’s around $288,700 in today’s dollars — and he’s lived there for over 60 years.

His home is by no means tiny, however. The 6,570-square-foot, five-bedroom home has had plenty of renovations and additions over the decades and is worth about $1 million today. It’s also protected by fences and security cameras and most likely has a good homeowner’s insurance policy as well.

Buffett has no plans to move out, calling it “the third best investment I ever made,” in a 2010 letter to Berkshire Hathaway’s shareholders.

2. He Rarely Takes Out Loans

Buffett’s one-and-only mortgage was on a vacation home in Laguna Beach, California, which he purchased in 1971, although he certainly had the cash to afford the $150,000-listed seaside property.

He told CNBC that he took out the 30-year-mortgage loan because, “I thought I could probably do better with the money than have it be an all equity purchase of the house.” He decided to use the extra cash on-hand for shares in Berkshire Hathaway — the company that brought him billions — instead.

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