Are you often wondering where all that money that you earned is going? 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. Don't know where to start? Warren Buffett is here to help you. GOBankingRates has shared Buffett's take on 12 common financial pitfalls, by addressing which, one can make more informed decisions on finances. Take a look:
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. Buffett has advised against needless spending through credit cards.
Ignoring personal development
Buffett says the best investment one can make is in oneself, as per the report. Hence, it is crucial to enhance skills and educate oneself to boost earning potential. According to Buffett, knowledge and abilities are assets that will always remain with you.
Frequently visiting bars and pubs
Visiting bars and pubs frequently can add up. For this, Buffett suggests alternatives like home get-togethers that can help one save a significant amount.
Buffett has a history of sticking to functional rather than flashy tech, says the report. Before buying the latest gadget, one needs to see if the upgrade is really providing added value for the price.
Overspending on clothes
Buffett is known for his simple wardrobe. Choosing classic durable clothes over very expensive brands can help one save money.
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 latest models that adds significantly to the expenses and often turns into long EMI tenures.
Unused gym memberships
While Buffett promotes active lifestyle, he cautions against unused gym memberships as they add significantly to the overall expenses. Rather, a low-cost fitness plan can be as effective as gym if followed properly.
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.
Over-reliance on skincare products
Buffett also advises against overusing skincare products. One must find a simple and effective skincare routine to save both money and skin.
Frequent nights out 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.
Buffett urges people to make financial decisions favouring long-term wealth accumulation and not take shortcut to wealth.
Besides the health implications, smoking is also an expensive habit. Quitting this habit can make a significant difference on your pocket.