Warren Buffett, one of the top 10 richest people in the world, is famous for living simply and giving practical money advice. Despite his incredible wealth, the Oracle of Omaha doesn't believe in living extravagantly, but he's also quick to point out that extreme frugality isn't for everyone.
Buffett's take on money and happiness revolves around balance. He's famously frugal, but he doesn't think you need to save every dollar or spend like crazy. Instead, he believes you should make thoughtful choices.
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He's built his fortune by living within his means and encourages others to do the same. He's also a strong advocate for spending on meaningful experiences. As Buffett puts it, the key is living true to your values.
Finding the Sweet Spot
Buffett doesn't think it's always necessary to save every extra dollar. Sometimes, it's better to spend on something that brings joy to your family – like a trip to Disneyland “that they’ll get enormous enjoyment out of” – instead of deferring that expense for a slightly bigger luxury later in life, such as having “a 30-foot boat instead of a 20-foot boat” at 75.
However, he's firm that spending beyond your means can lead to serious problems. According to Buffett, living within your income is nonnegotiable, as overspending often results in financial stress that could have been avoided.
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Buffett's Frugal Habits
Buffett's life demonstrates how simple, consistent choices can result in big savings. For example, he has lived in the same Omaha home since 1958, purchased for $31,500. Instead of moving to a mansion, he's made only minor updates, calling it one of the best investments ever.
When it comes to meals, Buffett sticks to the basics. A simple breakfast like sausage patties and Coke or a bacon, egg and cheese biscuit – often costing just a few dollars – is enough for him. Even with billions, he doesn't splurge unnecessarily.
Buffett also believed that the best luxury is doing what you love. He says success isn't about owning a lot of stuff; it's about enjoying your life and work daily.
Another big rule for him is staying away from credit card debt. Buffett thinks paying interest is like throwing money away. He believes you should only buy things you can afford and avoid debt. This idea also ties into knowing the difference between things you want and need. For example, he used a $20 flip phone until 2020 and doesn't spend money on flashy gadgets unless they're useful.
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Balance is the Key
Buffett's advice isn't about cutting out all luxuries or hoarding every dollar. Instead, it's about balance. He recognizes that some expenses – especially those that create cherished family memories – are worth prioritizing over future upgrades that might not add as much value to your life.
Buffett believes in an "internal scorecard" – living according to your values instead of trying to keep up with your neighbors. So whether it's Disneyland today or a bigger boat tomorrow, the decision should match what matters most to you. And if you're spending within your means, either choice can be right.
As he said, “You are not a better person or a worse person because you live a different kind of life than your neighbor, you live a life that is true to yourself.”
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