Frugal Celebrities: What Warren Buffett, Kristen Bell and Ed Sheeran Do With Money
Warren Buffett still lives in the house he bought in 1958 for $31,500. Kristen Bell shops almost entirely with coupons. Ed Sheeran puts himself on an allowance of about $1,000 a month. Dave Grohl drives a family car. These people could buy anything, and what's interesting is that they've each built a rule that stops them. The rules are the useful part, because they work just as well on a normal income, and most of them are about impulse, not income.
What they actually do
Warren Buffett: don't upgrade just because you can. Buffett has lived in the same Omaha house for over 60 years, drives ordinary cars and eats breakfast at McDonald's. His house is worth a tiny fraction of his wealth. The habit is refusing to let spending rise with income. Most people's spending tracks their earnings up and never comes back down; his never went up in the first place.
Ed Sheeran: give yourself an allowance. Sheeran has said he gets a monthly allowance, around £1,000, mostly spent on taxis, and that the rest of his money he doesn't see. The habit is a hard ceiling on day-to-day spending that's separate from what you earn. The amount doesn't matter; the ceiling does.
Kristen Bell: never pay full price. Bell has said she almost exclusively shops with coupons and was known for using the Bed Bath & Beyond 20% off coupon. The habit is a small friction before every purchase: is there a cheaper way to get this? Often the answer makes you realise you don't want it that much.
Dave Grohl: keep the money in the bank and the car ordinary. Grohl has talked about driving a family car that fits five, not a luxury SUV, and leaving his earnings alone. The habit is separating what you drive from what you're worth.
Tiffany Haddish: don't buy the status object. Haddish drove a hybrid Honda for years and has said the luxury bags she carries are gifts; the last bag she bought herself was a backpack on sale. The habit is noticing when a purchase is about being seen with it.
Carrie Underwood: do the boring thing. Clips coupons, makes her own meals, does her own shopping. Her splurge is a Subway sandwich. The habit is keeping the ordinary costs ordinary, which is where most of anyone's money goes.
Ashley Greene: fly economy, bank the difference. Greene has said a first-class ticket isn't worth the cost and she'd rather have the money for bills if acting work dries up. The habit is pricing a comfort against what the money would do instead.
Rob Gronkowski: live on the side income. Gronkowski has said he lived off his endorsement money and never touched his NFL salary. The habit is deciding that one stream of money is untouchable.
The pattern
None of these are about being cheap. Buffett isn't short of money and Sheeran's taxi allowance isn't a hardship. What they share is a rule set in advance that takes the decision out of the moment. The allowance is decided before the month starts. The house decision was made in 1958. The coupon rule applies before you reach the till. By the time the impulse shows up, the rule is already there.
That's the whole trick with impulse spending. The moment of wanting something is the worst possible time to decide whether to buy it, so the people who handle money well don't decide then. They decided earlier. Our guide to why you buy things you don't need covers what's happening in that moment, and a waiting period before buying is the simplest version of a rule set in advance.
Habits you can copy this week
- Set an allowance. Pick a number for discretionary spending for the month, move it to a separate card or account, and that's it. Sheeran's rule, at your scale.
- Freeze one category. Decide your car, your phone or your sofa is fine until it breaks. Buffett's rule, applied to one thing.
- Make one thing untouchable. A savings account, a bonus, a side income that you treat as not yours to spend. Gronkowski's rule.
- Add a friction step. Before anything over $30: is there a cheaper way, and if not, do I want it at full price? Bell's rule.
- Price the comfort. When tempted by the upgrade, ask what the difference would do elsewhere. Greene's rule.
If you want the wanting to go somewhere instead of fighting it, that's what Cake, an iOS app in development, is for. You put the thing you want on a cake sized by its price, $5 a slice, and skipped purchases and good habits fill the slices while the money adds up in a virtual jar. When the cake is full, you decide if you still want it. It's an allowance and a waiting period in one.
Common questions
Which celebrities are known for being frugal?
Warren Buffett, Ed Sheeran, Kristen Bell, Dave Grohl, Tiffany Haddish, Carrie Underwood, Ashley Greene and Rob Gronkowski have all talked about living well below their means. Keanu Reeves and Jennifer Lawrence are often mentioned too.
Does Warren Buffett really live in the same house?
Yes. He bought his Omaha house in 1958 for $31,500 and still lives there. He's said it's worth a tiny fraction of his net worth.
Why do rich people stay frugal?
Mostly habit and rules they set early. Spending that doesn't rise with income is easier to keep than spending that has to be cut back. Many also say the things they could buy wouldn't change their day.
How can I be more frugal without feeling deprived?
Set rules in advance rather than deciding in the moment: an allowance, a waiting period, one frozen category. Rules take the willpower out of it, which is why they work for people who could afford to ignore them.