‘Where did all my money go?’ This is a question many of us ask ourselves in the middle or by the end of almost every month given how quickly our purses dry up no matter how much we earn.
Well, if you are among those who often ask this question, then it’s time to consider it a red flag that indicates that you are not managing your finances well. It is an indication that you need to cut down on many of your expenses and make more informed financial decisions.
But don’t know where to start? Well, one of the world’s most successful investors, 93-year-old billionaire Warren Buffett has some insights for you.
Warren Buffett Shares 12 Common Financial Mistakes People Make
1. Frequently visiting bars and pubs
Visiting bars and pubs frequently can add up to a lot of cost. For this, Warren Buffett suggests alternatives like home get-togethers instead of pubs or bars, as this can help one save a significant amount of money.
2. Chasing the latest gadgets
Warren Buffett has a history of sticking to functional rather than flashy tech. Before buying the latest gadget, one needs to see if the upgrade is really providing added value for the price. Buffett reportedly owns an iPhone 11 at present.
Also Read: 15 Books Recommended By Billionaire Warren Buffett For Investors
3. Overspending on clothes
Warren Buffett is known for his simple wardrobe. Choosing classic durable clothes over very expensive brands can help one save you lots of money, when compared to making frequent, impulsive and unnecessary purchases of clothing, as per US-based leading financial news website Gobankingrates’ report,
4. Opting for latest vehicles
Cars are depreciating assets. As per the report, Buffett recommends buying pre-owned cars and holding onto them for as long as they’re reliable, instead of going for the latest models that add significantly to the expenses and often turn into long EMI tenures.
5. Gym memberships
While Warren Buffett promotes an active lifestyle, he cautions against unused gym memberships as they add significantly to the overall expenses. As per the report, a low-cost fitness plan can be as effective as a gym if followed properly.
6. Subscription services
As per the report, one needs to review subscription services regularly to understand if they are wasting money on any service they haven’t been using as retaining it for a long period can lead to a financial drain that people often realize quite late.
Also Read: How A Lost iPhone Led To Warren Buffett Investing Billions In Apple
7. Over-reliance on skincare products
Warren Buffett also advises against overusing skincare products. But that does not mean you should stop using it all. Instead, one must find a simple and effective skincare routine to save both money and skin.
8. Frequent night outs
Frequent night outs are a big no if you are seeking to save money but aren’t able to. Instead, opt for budget-friendly alternatives like home-cooked meals and movie nights. Warren Buffett himself has been known to follow his daily routine of being early to bed, early to rise.
Also Read: Why Warren Buffett Lives In The Same House That He Bought In 1958
Warren Buffett also reportedly urges people to make financial decisions favouring long-term wealth accumulation and not take shortcuts such as gambling. Here are some of his quotes to help you understand the importance of investment.
Besides the serious health implications, smoking is also an expensive habit. Quitting this habit can make a significant difference to your pocket. In an interview, as per an ET report, Warren Buffett revealed that he exercises at least 45 minutes, three days a week and he doesn’t smoke or drink.
11. Overspending through credit cards
Credit cards give easy access to money but come with high-interest rates. They can overshadow any benefits if one fails to make the full payment. That is why Warren Buffett has advised against needless spending through credit cards. So, only spend what you can repay timely.
12. Not investing in yourself
One thing that Warren Buffett has often focused on is not ignoring your personal development. As per the report, Warren Buffett says the best investment one can make is in oneself. Hence, it is crucial to enhance skills and educate oneself to boost earning potential. According to the billionaire, knowledge and abilities are assets that will always remain with you.
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