Warren Buffett’s Simple Cash Trick That Could Keep You Out of Debt

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[[{“value”:”Image source: The Motley Fool/Unsplash
Warren Buffett is best known for his investing success, but one of his smartest financial strategies can work for anyone: maintaining a strong emergency fund.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Buffett knows that a financial emergency can cost his company, Berkshire Hathaway, dearly, so he keeps a ton of cash — often hundreds of billions of dollars — on hand. Berkshire’s massive cash pile kept the company out of debt during the 2008 financial crisis.This strategy works for anyone — even if you don’t have billions in the bank. By following Buffett’s blueprint, you can be prepared to handle an emergency car repair or medical bill with no stress.Why Buffett believes in emergency fundsBuffett has talked about how keeping cash on hand at Berkshire has served as a financial safety net. Some people see unused cash as a missed investment opportunity, but Buffett values the power of liquidity.Buffett’s company, Berkshire Hathaway, is known for holding billions of dollars in cash. This buffer allows the company to weather economic downturns, capitalize on new investment opportunities, and avoid going into debt. You can apply the same logic on a smaller scale.How to build your own emergency fundTo work toward building your own cash pile, consider these steps:Determine your goal amountMost experts recommend saving enough cash to cover three to six months’ worth of living expenses. Buffett’s conservative approach suggests erring on the side of caution — especially if your income is unpredictable or your expenses are high.Pick the right accountBuffett’s cash reserves are highly liquid, ensuring easy access when opportunities arise. For you, this means keeping emergency funds in a high-yield savings account (HYSA). Some HYSAs currently earn 4.00% or more on your savings — that’s nearly 10 times the national average rate of 0.41%. You can also access your cash whenever you need it.Automate your savingsSetting up automatic transfers to your emergency fund can help you consistently grow your savings without having to think about it. Splitting a direct deposit or automating a weekly or monthly transfer between accounts easily accomplishes this.Why a strong emergency fund is crucialA well-funded emergency account can prevent financial disaster. It protects you from relying on high-interest credit cards or draining long-term investments to cover expenses like medical bills or car repairs. Buffett’s strategy of ample cash reserves underscores the importance of financial flexibility.Want to prioritize saving like Warren Buffett does? Check out our list of best high-yield savings accounts to get started now.Building a sizable emergency fund may feel overwhelming, but starting small can make a big difference. Even setting aside $25 or $50 per week can grow into a substantial safety net over time.By adopting Warren Buffett’s cash-first mindset, you can build your financial foundation and position yourself to thrive during uncertain times.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Warren Buffett is best known for his investing success, but one of his smartest financial strategies can work for anyone: maintaining a strong emergency fund.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Buffett knows that a financial emergency can cost his company, Berkshire Hathaway, dearly, so he keeps a ton of cash — often hundreds of billions of dollars — on hand. Berkshire’s massive cash pile kept the company out of debt during the 2008 financial crisis.

This strategy works for anyone — even if you don’t have billions in the bank. By following Buffett’s blueprint, you can be prepared to handle an emergency car repair or medical bill with no stress.

Why Buffett believes in emergency funds

Buffett has talked about how keeping cash on hand at Berkshire has served as a financial safety net. Some people see unused cash as a missed investment opportunity, but Buffett values the power of liquidity.

Buffett’s company, Berkshire Hathaway, is known for holding billions of dollars in cash. This buffer allows the company to weather economic downturns, capitalize on new investment opportunities, and avoid going into debt. You can apply the same logic on a smaller scale.

How to build your own emergency fund

To work toward building your own cash pile, consider these steps:

Determine your goal amount

Most experts recommend saving enough cash to cover three to six months’ worth of living expenses. Buffett’s conservative approach suggests erring on the side of caution — especially if your income is unpredictable or your expenses are high.

Pick the right account

Buffett’s cash reserves are highly liquid, ensuring easy access when opportunities arise. For you, this means keeping emergency funds in a high-yield savings account (HYSA). Some HYSAs currently earn 4.00% or more on your savings — that’s nearly 10 times the national average rate of 0.41%. You can also access your cash whenever you need it.

Automate your savings

Setting up automatic transfers to your emergency fund can help you consistently grow your savings without having to think about it. Splitting a direct deposit or automating a weekly or monthly transfer between accounts easily accomplishes this.

Why a strong emergency fund is crucial

A well-funded emergency account can prevent financial disaster. It protects you from relying on high-interest credit cards or draining long-term investments to cover expenses like medical bills or car repairs. Buffett’s strategy of ample cash reserves underscores the importance of financial flexibility.

Want to prioritize saving like Warren Buffett does? Check out our list of best high-yield savings accounts to get started now.

Building a sizable emergency fund may feel overwhelming, but starting small can make a big difference. Even setting aside $25 or $50 per week can grow into a substantial safety net over time.

By adopting Warren Buffett’s cash-first mindset, you can build your financial foundation and position yourself to thrive during uncertain times.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

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