I have always heard that you should find someone to serve as your mentor; that someone who has become what you hope to be or who exhibits those traits you would like to have. Warren Buffett exhibits certain traits for being frugal and making good financial decisions so let’s look at a few of his habits to see if we can model those habits.
Frugal Habit #1: Choose an affordable and modest home. Mr. Buffett lives in the same home that he bought in 1958. I discussed this in an earlier blog. Don’t overextend yourself on mortgage payments! It’s just not worth the additional stress! We don’t have to keep up appearances to impress others.
Frugal Habit #2: Be smart with your investing. My best advice for this habit is to make sure you don’t borrow money to invest. It is just too risky! Investing should only be done with money you have already saved and set aside for investing. Mr. Buffett suggests investing in yourself to build skills and increase your talent.
Frugal Habit #3: Don’t buy expensive toys. We shouldn’t think that we have to keep up with everyone and buy expensive things we don’t need. Often we feel pressured to maintain a certain image when it really isn’t necessary at all. Instead of buying expensive items, you could take that money and save or invest it. The return can be much greater.
Frugal Habit #4: Pursue your passions. Have you ever known someone who worked in his/her passion? What I mean is that person truly enjoyed what he did to earn a living. Over the years I have met several people whose passion was evident. They didn’t really feel like they were working because they were making a living doing the things they really enjoyed doing. It was difficult for them to believe that someone was actually paying them to do what they loved. They never woke up and thought they didn’t want to go to work because they were in their element. If you can’t support your family with your passion, at least pursue it on the side if that brings you joy. You might be surprised to find out that you won’t have the need to pursue other expensive activities when you find that area of passion. It can make you more satisfied and less likely to look for other things to make you happy.
Frugal Habit #5: Don’t pay retail price. It can be quite tempting to purchase something you like at full price, but if you have the patience and fortitude you will probably have the opportunity to buy the item at a discounted price in the future. Watch for sales and look for discount codes that will help reduce the price. I rarely pay full price for any item and find it satisfying to have saved money on the purchase. Learn to delay your gratification.
Frugal Habit #6: Give, give, give. Find ways to give to others whether it would be money, volunteer time, used clothing, household items, knowledge, etc. Realize there are so many others who can benefit from your generosity. Even taking time from your busy schedule to reach out to someone who is hurting has great rewards and fulfillment.
Frugal Habit #7: Consider both sides of your decision. Take the time to consider the pros and cons of choices you face in order to make the best decision. While we are often under pressure to make quick decisions, sometimes it is best to take a breath and look at the possible outcomes. Don’t be hasty be smart.
By implementing some or all of these frugal habits you can head down the road to a positive and fulfilling financial future. Sometimes it’s the little things we do that can much a huge difference. Consider your decisions today and make the smart choice!