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10 Warren Buffett Money Tips Everyone Should Follow

By , February 5th, 2018 | 8 Comments »

Warren Buffett Money Tips to Follow
If you want to get the most out of your money, it makes sense to listen to people who know a thing or two about it. Finding a financial mentor is a great way of doing this, but if you can’t find one right away, following tips from those who are well-respected in different financial fields is a good place to begin. When most people think of finance and investments, one of the names that invariably comes up is Warren Buffett. There is a good reason for this and a good reason that many people look to Buffett for tips.

Warren Buffett Money Tips

Warren Buffett is well-known for giving sound financial advice that many people would do well to take into consideration. Here are a few tips that he’s given to the public over the years that everyone should keep in mind:

Spend Wisely

When it comes to money, you should always spend wisely. Everyone wants to splurge here and there, and sometimes we like to justify or explain away our purchases. You buy something you don’t really need and say it’s because you just celebrated a birthday or a holiday or some personal achievement. But if you keep buying things you don’t need, especially if you have problematic finances, to begin with, you’ll end up having to scrounge for money. You might even have to end up selling those items you just bought.

Save for the Unexpected

You should always be saving for the unexpected. Most people don’t save as much money as they should, as they assume they won’t have any big emergencies to deal with in the future. But you never know when an emergency will occur, and you should always have money saved up in an emergency fund. As soon as you get your monthly paycheck, set aside a small amount of money.

Think Long-Term

As Warren Buffett has stated in various interviews and articles, money doesn’t grow overnight. People often overestimate and underestimate specific purchases, investments, and savings. Many people are often wary of thinking in the long-term as they’re too concerned about immediate financial problems and situations. But long-term financial goals are important. You don’t want to find yourself in trouble ten years from now or even twenty or thirty years from now.

Limit What You Borrow

While sometimes it’s necessary to borrow money, you’ll have a harder time saving money and become financially independent if you rely on borrowing money. Accruing credit card or loan debt will end up drastically harming your finances. If you have debt, start trying to figure out a way to pay it down or even better, how to stop relying on borrowing money.

Never Invest In Something You Can’t Understand

Buffett also recommends that you should never invest your money into a business or idea that you can’t understand. For one thing, putting your money into something you don’t understand will only lead to trouble down the road. On the other hand, understanding a business or investment idea can help you determine if there will be any associated financial problems in the future.

Master the Basics

When it comes to money, you should master the basics of investing and accounting so that you know what you’re getting yourself into. For instance, knowing the ins and outs of debt and loans will help you out when you go to apply for a loan or credit card. Knowing the basics of finance will help you strengthen your financial decisions.

Buying Stocks Is More Than Just the Price

If you’re looking to get into investing or the stock market, it’s important to know the type of stocks you want to buy. Buffett has repeatedly said that “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Which basically means you want to make sure you buy something worth your money instead of picking the cheapest option available.

Price and Value Aren’t the Same

Sometimes, something will be very cheap and poorly made. And other times something will be moderately priced but will have a decent value. Price is what you pay for an item, but the value is its true worth. It might be worth spending a little more for an item that will last you a little bit longer. Additionally, before you buy any item, you need to make sure that both the price and value are a good deal. Buffett is famous for having regretted his purchase of Berkshire Hathaway, which ended up being on the wrong end of industry changes and cost him substantially in the long run.

Keep a Modest Lifestyle

Buffett also recommends keeping a modest lifestyle if you’re trying to save money. Keeping yourself on a budget will help you watch what you spend and help you save money for the future, as well as a lot more. A lot of people want to live beyond their means, but if you’re trying to keep track of your finances, it’s important to live within your financial means. You shouldn’t be trying to spend more money than you have.

Avoid Compulsive Buying

Additionally, it’s important not to fall into the trap of compulsive buying. Compulsive buying can lead to credit card debt and waste your entire savings. You don’t want to end up spending all your money on items you don’t need and can’t afford, right? In this day and age, many people like to buy items they think they need to own. Before you go out and buy all those items you’ve been lusting after, it’s a good idea to reassess your purchasing habits.

How Did Buffett Get So Rich?

Buffett is one of those interesting guys who has managed to beat the odds. Despite having a wealthy father who was involved in national level politics, Buffet managed to accumulate enough of a fortune to make him one of the world’s richest men. This is certainly a remarkable feat. If you want to really learn how Buffett did it, consider getting two books. First, pick up a copy of The Snowball: Warren Buffett and the Business of Life. It is an authoritative and comprehensive review of Buffett’s career – loaded with lessons for the average investor.

Second, if you want to learn how Buffet traded stocks get a copy of James Altucher’s book: Trade Like Warren Buffett. The book walks you through the strategies that Warren Buffett uses to make money trading the stock markets – hint: it wasn’t just value investing.  Altucher’s book is also accurate and comprehensive.  Both works together will give you an excellent overview of what Buffett did to make his business successful.

If you are reading this because you want to get rich, consider checking out our articles on how to buy an oil well and how to increase your credit score by 200 points.

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  • Minny says:

    It seems like common sense so not a particularly enlightening article, but not so. How many people do half of the things here? Not very many as it does not give you the magic ‘get rich quick’ key to open the door to being wealth.

  • Gailete says:

    Sure it seems common sense, but if people paid attention to those things he talked about, maybe many more would be rich like him. He has always been willing to put off a pleasure now for money in the bank for necessities. He is the richest man in the USA is he not? At this point he could spend money like water for the rest of his life, but he still holds to those principals that he has run his life by and more power to him. Puts to shame all those folks that think just because they got a raise, they can trade up to a bigger house, better car, etc. and then realize a few months down the road they can’t afford the carrying costs on them.

  • David S. says:

    Hi Danielle,

    These points courtesy of the great business magnate gives us the chance to ponder on saving money. These tips seem easy to follow but it takes a lot of determination from the person who wants to adopt these suggestions.

  • elliott says:

    Some folks think they know a little more than others because of something they read or heard. That usually ends up a flp. Mr. Buffet keeps it simple and if you think he ia not on track then who is. ake the glitter out of your dreams and keep your feet firmly planted on the ground. Winning the first game of the year by a landslide score does not make you champions for the season.

  • Ifunanya says:

    A timely advice for us all

  • “Master the Basics”

    This is one of the things I think many people forget while investing. Many people start investing because they think they will make money investing in the brands they love, or sometimes in IPO’s of popular companies such as Facebook.

    That’s what inspired me to start my website and develop a course to teach anyone all the Basics they need to know about investing. You would be surprised how much money people lose by investing blindly.

    Great article!

  • Julio says:

    How do you find ‘value’ in a company? All the ones with ‘value’ have already been ran sacked by hedge fund manager and driven the stock price sky high.
    I’m just saying its hard for us regular folks to be able to find stocks that will grow your money.

  • Baua says:

    When you were saying that everyone should follow those ten tips you were totally right! Thank you for sharing these insights from Warren Buffett, it’s definitely useful!


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