Warren Buffett’s Money Advice That Anyone Can Put Into Practice

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Warren Buffett is set to step down as Berkshire Hathaway’s chief executive at the end of 2025, when he will be 95. He leaves behind a company worth more than $1 trillion, along with a long record of practical financial advice he has shared over the years.

Best known for turning his investing skill into an estimated $150 billion fortune, the “Oracle of Omaha” also offered commentary on business, the economy and personal finance throughout his career.

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You do not have to be a billionaire, or even an investor, to benefit from Buffett’s thinking. He has offered plenty of guidance that everyday families can use to save more, manage budgets and make better money choices. Below are some of his best-known ideas on savings, debt, homeownership and more.

Savings

Buffett often praised the power of compounding and the value of keeping cash available when needed. His remarks on saving money include the following:

• “Even a totally dormant savings account will produce steadily rising interest earnings each year because of compounding.” (Letter to Berkshire Hathaway shareholders, 1977)

• “We will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity.” (Letter to Berkshire Hathaway shareholders, 2009)

• “When bills come due, only cash is legal tender. Don’t leave home without it.” (Letter to Berkshire Hathaway shareholders, 2014)

• “Combining savings with compound interest works wonders.” (Letter to Berkshire Hathaway shareholders, 2019)

• “You should just spend a little bit less than you earn.” (Berkshire Hathaway annual meeting, 2023)

Value

Buffett built his reputation on identifying bargains in business, and those lessons also apply when shopping for everyday goods:

• “In our view, it is madness to risk losing what you need in pursuing what you simply desire.” (Letter to Berkshire Hathaway shareholders, 2014)

• “Neither of us feels any urgency to buy an estimated $1 of value for a very real 95 cents.” (Letter to Berkshire Hathaway shareholders, 2019)

Debt

Buffett has consistently discouraged borrowing, both in business and in personal finances. Here is what he has said about debt:

• “In general, we continue to have an aversion to debt, particularly the short-term kind.” (Letter to Berkshire Hathaway shareholders, 1992)

• “I think people should avoid using credit cards as a piggy bank to be raided… If I owed any money at 18 percent, the first thing I’d do with any money I had, would be to pay it off. It’s going to be way better than any investment idea I’ve got.” (Berkshire Hathaway annual meeting, 2020)

• “If you’re effectively paying 12% or 14% or whatever percent you’re paying on a credit card, you know, you’re saying, ‘I’m going to earn more than 12% or 14% on my money.’ And if you can do that, come to Berkshire Hathaway.” (Berkshire Hathaway annual meeting, 2023)

Homeownership

Buffett has drawn a line between mortgages and other forms of debt, but he has still offered guidance on buying a home, which is often the biggest asset for American households:

• “Home purchases should involve an honest-to-God down payment of at least 10% and monthly payments that can be comfortably handled by the borrower’s income.” (Letter to Berkshire Hathaway shareholders, 2008)

• “I told you why our buyers — generally people with low incomes — performed so well as credit risks. Their attitude was all-important: They signed up to live in the home, not resell or refinance it. Consequently, our buyers usually took out loans with payments geared to their verified incomes (we weren’t making ‘liar’s loans’) and looked forward to the day they could burn their mortgage.” (Letter to Berkshire Hathaway shareholders, 2009)

Moderation

Still, Buffett’s money advice has not always been about strict frugality:

• “I think there’s a lot to be said for doing things that bring you and your family enjoyment rather than trying to save every dime.” (Berkshire Hathaway annual meeting, 2019)