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The economies of many countries around the world have been impacted due to rising inflation. An impending recession in the US has only made matters worse. With both these factors, people are looking for advice from economic experts and financial advisors to help them save money instead of losing it to inflation.
Warren Buffet, one of the most successful investors and businessmen, is someone who people turn to in order to help them beat the rise in inflation. Buffett says that there are certain moves and actions that people can make in order to protect themselves against the effects of inflation.
Warren Buffett’s Habits To Follow To Beat Inflation
10 Best Frugal Warren Buffett’s Habits You Should Use to Beat Inflation
- Warren Buffett’s Habits To Follow To Beat Inflation
Here are ten frugal habits that can help you beat inflation according to Warren Buffett:
1. Living in the Same Home for Many Years
With the rise in inflation, the value of the property also increases. Living in the same home or property for many years and not bulking up on expensive real estate is a great way to save money. Warren Buffet is living in the same home he bought in the late 1950s which is worth nearly ten times more now than when he bought it in 1958. Although the property is large, investing in a property and taking care of it will result in a large payoff over the years. Buffett refers to the house he lives in as one of the best investments he has ever made. Down-sizing to a smaller place could also be a good idea if you don’t need the space, many people are moving into studio apartments to lower there costs.
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2. Rarely Taking Out Loans
Buffett has only ever taken out a mortgage on a vacation home that he had purchased in early 1970. He says that he could have afforded the home but felt that he could keep that money to better use. Rarely taking out loans has helped him save up money while also ensuring that he did have any loans to pay or owe anyone money. This is a great habit that anyone can have to ensure that you have your finances sorted even in case of sudden inflation.
3. Buying Cheap Breakfasts
Warren Buffett often enjoys grabbing breakfast on his way to work from various food chains which often sell breakfast items at cheaper rates. This habit has allowed him to spend lesser amounts of money on food and takeout. The habit can also be taken up by anyone who wants to save money. Choosing cheaper options for food is a great way to help save money in the long run while also ensuring that you are properly fed. These cheaper meals also mean that in the event inflation occurs, the money you spend on meals can remain low.
4. No Brands
Buffett has been known not to care much for designer clothes or the latest, more expensive gadgets. He even used his $20 flip phone for many years and eventually switched to a smartphone only in 2020. This habit of not spending money on expensive brands is a great habit that anyone can take up. If luxury items already cost a fortune, inflations can lead to these items costing even larger amounts.
5. Do Not Invest With Borrowed Money
Warren Buffet has made it a point not to borrow large amounts of money from anyone for any reason. He once borrowed about 25% of his net wealth to buy shares, he warns against making that same mistake, especially to use the money for investing. Skilled investors and traders also warn against investing with borrowed money. This is a good habit that you can have that will help you in case of any inflation that may arise as owing money to someone during inflation can be difficult to clear.
6. Buying Used Cars
Unlike most other millionaires and billionaires, Warren Buffet would rather acquire fixed-up cars and vehicles that can be acquired at reduced prices. This habit can also be taken up by anyone who is looking to save money. Buying these kinds of cars rather than flashy sports cars means that you can save up a lot of money especially if you do not buy cars very often. The more expensive the cars, the more the prices of the car are likely to go up with inflations. Therefore, buying marked-down cars is a good habit to have. Alternatively, getting a remote job would limit driving allowing you to not need a car or at the very least, reduce your fuel expenses.
7. Find Creative Ways To Save Money
Warren Buffet converted a dresser drawer into a bassinet when his first child was born and borrowed a crib when his second child was born. This helped him save money in a creative way. Reusing old furniture or repurposing old items to find a new and useful way of using them is a great habit to inculcate that can help you save money. Cutting down on all kinds of purchases, especially during inflation can help you save a lot of money. Another example of this could be selling old scrap metal for extra cash.
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8. Doing What He Loves
Warren Buffett urges people to take up jobs that they love rather than doing something only to look good on a resume. He even credits some of his success to his passion for investing which he enjoys doing. Doing what you love either as a hobby or as a full-time job can bring you the happiness and success that you look for. This habit may be difficult to develop especially with full-time jobs, however, once you do something you love there will always be many benefits that come with it.
9. Only Cash, No Credit
Buffet once mentioned in an interview that 98% of the time, he uses cash instead of a credit card. Although this method of payment may seem outdated, it ensures that you do not use money that you do not have. This habit especially makes sure that you spend according to your means and do not end up with any kind of debt. The reliance on credit cards can become harmful if you end up being unable to pay credit card bills. Therefore, this is a great habit that you can inculcate into your spending.
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10. Clipping Coupons
To this day, Warren Buffett still collects and clips coupons. He never misses out on the opportunity of a good deal. This habit especially comes into great use when you want to save up money during inflations. Coupons are easily found and can be used to purchase different kinds of items at different kinds of stores. If you are looking to save up money during inflation, this is one habit that you can also take up.
These frugal Warren Buffett’s habits are some of the simplest ways that anyone can save money in general, or especially during inflation. Inflations can be difficult for many people from all kinds of financial backgrounds and no matter what our earnings are, saving money is great in case of a rainy day.
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