Yahoo Finance Warren Buffett: 11 Things Poor People Will Waste Money On in 2024
Billionaire Warren Buffett is known for his frugal lifestyle, living in a modest home, driving an older car and favoring a diet of McDonalds and Coca-Cola. America’s poor and middle class could learn a few things from the Oracle of Omaha.
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Consider these 11 things Warren Buffett has suggested that poor people, and even many middle-income earners, will waste money on in 2024. With a little planning, you can avoid these financial pitfalls and set yourself up for a wealthier 2024.
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Your Home
If you’re in the market for a house in 2024, keep Warren Buffett’s lifestyle in mind. The billionaire once said, “The cost of living does not equate to the standard of living. I wouldn’t live better if I had 8 houses, if I had a 400-foot yacht.”
He bought his house in Omaha 55 years ago for $31,500, andYe despite his billions in earnings, hasn’t seen a reason to move. “It’s warm in the winter, it’s cool in the summer, it has everything I wanted. Plus, it has all kinds of good memories.”
While Buffett’s 6,750-square-foot, five-bedroom home is not small by any means, he could have purchased something much more extravagant.
In a YouTube video by Investor Weekly, the narrator pointed out, “If the initial purchase meets your needs and brings satisfaction, do you really need a bigger, costlier home?”
New Cars
Warren Buffett drove a 2006 Cadillac DTS until 2014, according to the video. He then bought a Cadillac XTS in 2014. But it’s more than the money that keeps Buffett away from newer vehicles.
He explained in a shareholders’ meeting, “It would take me probably half a day to go through the exercise of buying a car and reading the owner’s manual and all that. And that’s just a half a day I don’t want to give up in my life for no benefit.”
If your older car is still working and you aren’t pouring money into repairs, put that time and money into something that will help you earn more money, instead.
Car and Home Maintenance
Learning how to do basic repairs on your home and car can save you money and keep your vehicle on the road longer. “Master basic DIY skills that could potentially save you money on repairs and tweaks,” the Investor Weekly narrator said.
Similarly, he said, “Finding value in making the most of your current home can be cost effective.”
Dining Out
It’s no secret that eating out can take a huge bite out of your budget. GOBankingRates recently reported that a steak dinner cooked at home can cost less than even a cheap fast-food meal.
Similarly, the cost of meeting friends for happy hour adds up. Instead, Investor Weekly recommended hosting small gatherings at home.
Credit Card Expenditures
Warren Buffett uses cash everywhere, according to multiple sources. In the 2014 Berkshire Hathaway annual report, Buffett noted, “When bills come due, only cash is legal tender. Don’t leave home without it.”
Credit card purchases can get you into financial trouble because it’s easy to lose track of how much you spend. Perhaps more important, carrying a balance costs a lot of money. According to The Motley Fool, Buffett once said in a news release, “Interest rates are very high on credit cards. Sometimes they are 18%. Sometimes they are 20%. If I borrowed money at 18% or 20%, I’d be broke.”
Gambling
Gambling in casinos or even purchasing lottery tickets may seem tempting. The chance of winning millions in minutes can entice you to place bets that you shouldn’t.
“Buffett’s approach teaches us that success lies in making thoughtful, informed choices,” the Investor Weekly video noted.
Gambling, whether it’s on stocks for companies you don’t understand or blackjack tables at a casino, rarely pays off.
Risky Investments
“Risk comes from not knowing what you’re doing,” Buffett has been quoted as saying. The billionaire investor has also said, “Never invest in a business you cannot understand.”
Always research a business before you invest in its stock, and don’t be afraid to seek the help of a financial advisor if you are new to investing.
The Latest Gadgets
Warren Buffett didn’t upgrade his flip phone until 2020, when he finally purchased an iPhone, according to Investor Weekly. Before buying the latest gadget, decide if your current devices, appliances or other tools still fit your needs.
Low-Quality Products
“Price is what you pay; value is what you get,” Buffett once said in a Berkshire Hathaway shareholder letter. While he doesn’t need the latest or greatest car or phone, he does ensure his purchases will last. “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
Wasteful Purchases
Even an item that represents a tremendous value may be a poor financial decision if you don’t need it. “If you buy things you do not need, soon you will have to sell things you need,” Buffett once said, according to Investor Weekly.
If you have extra cash, consider increasing your retirement savings or making an investment in a high-value stock that pays dividends rather than filling your home with more stuff.
Unused Subscriptions
A survey by Forbes Home recently revealed that 47% of Americans pay for streaming services they don’t use. If you glance over your bank statements, it’s likely you’ll find a few subscriptions, whether it’s a streaming service or a gym membership, that you don’t use. These costs can add up.
“Unused subscriptions often grow to become financial pitfalls for many Americans,” said the Investor Weekly video.
As we step into 2024, it’s a good time to evaluate your budget and trim any unnecessary expenses, including unused subscription services.
Final Note
A common thread runs through Buffett’s advice: Live within your means, don’t spend money you don’t have, and don’t spend money on things you don’t need.
Of course, it’s okay to treat yourself once in a while. But make sure your purchases align with your financial goals and will enhance your life in the long term.
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This article originally appeared on GOBankingRates.com: Warren Buffett: 11 Things Poor People Will Waste Money On in 2024
