Warren Buffett is worth about $100 billion, and he doesn’t need to worry about how much money he spends every day. But despite being the 8th richest person in the world, the famous billionaire is known for his spirit and modest approach to life.
You might be thinking: Why should I worry about saving now that inflation is so high? But experts say having 3-12 months worth of essential expenses tucked away in a high savings account (thankfully savings account prices are rising and you can see the best rates on savings accounts here) in case of an emergency — something that could come in handy if we head into the recession many are predicting. So how do you accumulate so much savings? Take a page from Warren Buffett’s book. Here are 5 things the business tycoon does to save money – which you’ll want to do in your own life.
98% will pay money
While most people are used to swiping plastic when it’s time to pay for something, Buffett believes in using cash for everyday purchases, according to Yahoo! “I have an American Express card that I got in 1964,” Finance said. But I pay 98% cash. For those with a tendency to overspend, this is a good rule to follow: You can’t spend money you don’t have.
He doesn’t take loans very often.Except for the mortgage
Buffett is known to have only one mortgage – on a vacation home he bought in 1971. “If you take out a 30-year mortgage, it’s the best instrument in the world,” Buffett told Yahoo Finance. “I thought I could do better with the money than buying the home equity,” Buffett said. Sure, you’ll pay interest on the loan you get, but mortgage interest rates are lower than personal loans or credit cards, and once you pay off the loan, you own the home outright.
He doesn’t spend much on food.
Although anyone in the world can afford to cook their own meals or spend several hours a day at more expensive restaurants, Buffett prefers a cheaper breakfast at McDonald’s and is known for making his own lunch. He even forgoes store-bought coffee and prefers to make his own. This can be especially important at the moment, because the price of food has increased by an unadjusted 10% in the past year, according to government data.
He doesn’t drive high end cars.
Instead of driving around in a collector car that costs as much as a house, Buffett prefers a modest vehicle. According to Forbes, In 2014 he bought a Cadillac XTS after driving his old Cadillac DTS for 8 years. This can be good advice, especially now that the price of cars has gone up. Better than Zia? By some estimates, new cars depreciate 20% or more in their first year, so buy a gently used car.
He buys what he wants, and not much else
“If you buy the things you don’t want, you’ll soon sell the things you want,” Buffett said. Because of this, dress up dresses into a bassinet and work to find solutions to situations rather than buying new items that aren’t completely necessary.
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