10 frugal habits of Warren Buffett that could save you money

Here are 10 ways Buffett's well-tested strategies can help you tighten your belt and spend wisely.

More: Warren Buffett's net worth

1. He lives in the same home he bought back in 1958

While many billionaires bulk up on expensive real estate, Buffett originally paid $31,500 for his Omaha, Nebraska, home — that’s about $336,164 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 house 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.

Buffett has no plans to move out, calling the house “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, that 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.

3. He buys breakfast cheap

While Buffett could simply have a personal chef cook him a gourmet breakfast, he often grabs Mickey D’s on his way to work. He says he doesn’t like to spend more than $3.17 on his morning meal.

“When I’m not feeling quite so prosperous, I might go with the $2.61, which is two sausage patties, and then I put them together and pour myself a Coke,” he says in HBO's 2017 documentary Becoming Warren Buffett.

He continues: “$3.17 is a bacon, egg and cheese biscuit, but the market’s down this morning, so I’ll pass up the $3.17 and go with the $2.95.”

4. He doesn’t splurge on brands

Buffett doesn’t much care for designer suits or the latest iPhone model.

He relied on his $20 flip phone for years before swapping it out for an Apple smartphone in 2020.

The Oracle of Omaha avoids unnecessary spending and once said, “Do not save what is left after spending, but spend what is left after saving.”

5. He doesn’t invest with borrowed money (anymore)

“I’ve never borrowed a significant amount of money in my life. Never. Never will. I’ve got no interest in it,” he told students at Notre Dame in 1991.

Although a young Buffett once borrowed 25% of his net wealth to buy shares, he warns investors against repeating the same mistake.

Even skilled stock traders will tell you borrowing to invest can be risky.

6. He buys marked-down cars

Many billionaires and millionaires keep a collection of flashy sports cars and vintage models in their garages, but Buffett allegedly prefers fixed-up automobiles he can acquire at reduced prices.

He upgraded from his 2006 Cadillac DTS to a Cadillac XTS for just $45,000 in 2014.

"The truth is, I only drive about 3,500 miles a year, so I will buy a new car very infrequently,” he told Forbes.

7. He finds creative ways to save

When Buffett’s first child was born, he converted a dresser drawer into a bassinet.

For his second, he borrowed a crib.

“If you buy things you don’t need, you will soon sell things you need,” the billionaire says.

Take a good, hard look at your purchases and figure out where you can cut down.

8. He does what he loves

Buffett credits some of his success to his passion for investing.

“You have to love something to do well at it,” he says, urging people to take the jobs they love instead of positions that look good on your resume.

Even if you can’t quit your full-time job to focus on the things you truly enjoy, you can focus on affordable hobbies. Buffett himself enjoys card games and playing the ukulele.

9. He uses cash, not credit

While most of us prefer the convenience of a credit card for our everyday purchases, Buffett uses hard cash.