Warren Buffett says this is the ‘biggest mistake’ people make with their money (and psst: it has to do with savings)

You might be thinking — why save now in times of high inflation? But pros say that even now, it’s key to have savings (thankfully savings accounts are paying more now; you can see some of the best-paying savings accounts here). The guidance is that you will need roughly 3-12 months of essential expenses somewhere safe like a high-yield savings account. Need a little inspiration to make that happen? Here are a few of Buffett’s most famous quotes about saving money. 

“The biggest mistake is not learning the habit of saving properly.”

In a speech to college students, Buffett noted that the “biggest mistake” is “not learning the habit of saving properly.” He also noted that “most behavior is habitual” and that “they say that the chains of habit are too light to be felt until they are too heavy to be broken.”

One way to easily do this? Make it automatic. It’s advice you’ve probably heard a thousand times but that doesn’t make it any less effective. Set up automatic transfers directly from your paycheck soon after you get paid into your savings and retirement accounts at regular intervals. This way you’re never touching that money yourself; it’s just going right into savings. Then each year if you can, try to up your savings (many people use the start of the year to review their finances and do something like this). You can see some of the best-paying savings accounts here.

“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” 

In his 2008 Berkshire Hathaway shareholder letter, Buffett said, “price is what you pay; value is what you get.” To avoid losing money as a result of paying a price that doesn’t match its value, Buffett suggests that you can save by buying discounted items. “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down,” said Buffett.

The good news for consumers is that with regards to both stocks and stocks there are deals right now, as the markets are down this year, and there is excess inventory now on plenty of items at spots like Walmart because inflation is spurring consumers to spend less. 

“Do not save what is left after spending, but spend what is left after saving.”

Essentially, save first and foremost and once you’ve socked away as much as possible, then you can allow yourself to spend money.  For his part, Buffett is all about spending in cash too. “I’ve got an American Express card, which I got in 1964,” he told Yahoo Finance. “But I pay cash 98% of the time.”