3. Form healthy money habits
“Most behavior is habitual,” Buffett said in a 2007 address at the University of Florida, “and they say that the chains of habit are too light to be felt until they are too heavy to be broken.” Habits are changeable, but the earlier you start, the better.
“I think the biggest mistake is not learning the habits of saving properly early, because saving is a habit,” Buffett said. Pay attention to money habits and work to strengthen those that help your finances, and break those that hurt your finances.
4. Avoid debt, especially credit card debt
Warren Buffett built his wealth by getting interest to work for him instead of working to pay interest, the way many Americans in debt do. “I’ve seen more people fail because of liquor and leverage — leverage being borrowed money,” Buffett said in a 1991 speech at Notre Dame. “You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.”
Buffett is especially wary of credit cards. His advice is to avoid them altogether. “Interest rates are very high on credit cards,” Buffett once said in a news release. “Sometimes they are 18%. Sometimes they are 20%. If I borrowed money at 18% or 20%, I’d be broke.”