Secrets of Extreme Savers

[Delawaredave5]

Article is good and featured people's habits are impressive (and I am similar).

But I have to agree with one of the reader comments below the article.....

Wow! This is amazing. Someone who earns $250,000 is applauded as a super saver. It must be incredibly difficult to live on a mere pittance of $200,000. Oh, the agony. To woefully turn away and not be able to buy the necessities of life. The median salary in the US is ~$52,000. These fluff pieces passed as newsworthy are becoming ridiculous. Why don't we see the real supersavers.... I mean Buffet pulls in a billion and only lives on a couple hundred million...Now that's a super duper super duper saver!!!!

 

[easysurfer]

Who would have guessed that Eddie Haskell and not Wally Cleaver was the saver?

When I used to w*rk, I did a pretty good j*b of maxing out my 401K and IRAs, along with investing in more if I had any left over.

I consider to more average investor I am, the more successful because I try to follow the indexes, up, down and flat

 

[haha]

I use a sponge.

I thought that was to control the inflow?

Ha

 

[Sea Kayaker]

I'd say we (DW and I) are pretty extreme savers in that we save 50% of our income WITH a mortgage in the most ridiculously expensive real estate market in North America.

Once the mortgage is paid off in little more than a year from now, and assuming we continue to live our D.I.N.K existence, we should be into the 65%-70% range.

Other than living in smaller residence that we would ideally like, we don't feel deprived of living a great life. Sometimes I wonder how so many people succumb to massive debt... LBYM seems so natural and sensible to us. We can definitely sleep easy at night...

 

[bbbamI]

I thought that was to control the inflow?

Ha

Not at my age....

 

[TomG]

"Don't buy stuff," how is that a secret?

Of course actual amounts earned, spent and saved can be more meaningful than percentages

 

[traineeinvestor]

Of course actual amounts earned, spent and saved can be more meaningful than percentages

+1

We have a high savings rate - not because we are frugal but because we (i) live in a moderate tax jurisdiction and (ii) opted to buy a home which is well below our means (iii) have never owned a car (not needed here) and (iv) have a relatively high income.

Even though we spend more than we should in other areas, the four factors above are enough to give us a good savings rate as a percentage of income without trying too hard.

 

[simple girl]

We save/invest on average between 40 and 50% of our gross income. Essentially, my paycheck gets directed to Vanguard every 2 weeks.

 

[Onward]

Sometimes I wonder how so many people succumb to massive debt

 

[JustChristine]

Single, homeowner (actually, landlord), saving 58% after tax for retirement. If I included my slush fund savings in that it's closer to 65%.

 

[ESRwannabe]

So what's your savings rate?

Single, no kids, renter, age 34.

Last year was around 44% of gross w2 income. This year will probably be the same.

I also have a pension. I would guesstimate that adds the equivalent of another 13% to savings every year.

So, around 57% plus whatever my investment returns are.

 

[lostcowboy]

I suspect that people with a low income have a much lower savings rate than people with a high income do.

 

[Gone4Good]

I'm always disappointed with articles like this because they never actually reveal any secrets. I always read them hoping someone will have a nifty little insight that I can use. It's seldom the case.

 

[Gone4Good]

LBYM seems so natural and sensible to us.

I think that is the difference between many of "us" and most of "them." We're just wired differently. I personally don't find shopping and buying things enjoyable, and not just because of the cost. Shopping blows. I hate it. But I know other people who engage in shopping as a competitive sport. They don't understand my aversion and I can't understand their compulsion. But I also recognize that my way of thinking is a minority view.

 

[CyclingInvestor]

I saved about 25-30% of my gross (including employer match) most years (a typical programmers salary) from 1979-2006. This allowed my to retire at 48 with about the same net 'pay' (after tax, adjusted for health insurance, mortgage payoff, and savings) as when I was working. No pension, no inheritance, no significant stock options, but I was helped by above average investment returns.

 

[rescueme]

I suspect that people with a low income have a much lower savings rate than people with a high income do.

Exactly. You can't save/invest if you can't put food on the table (been there, done that). There is a minimum substiance level that’s required, regardless of your family makeup.

We started out slow (about 2% of total gross income for the two of us) but over the years, that grew to 33% of total gross income for the decade prior to retirement.

For me it’s not how much you save as much as the consistency of having a long term plan and sticking to it...

 

[scrabbler1]

I think that is the difference between many of "us" and most of "them." We're just wired differently. I personally don't find shopping and buying things enjoyable, and not just because of the cost. Shopping blows. I hate it. But I know other people who engage in shopping as a competitive sport. They don't understand my aversion and I can't understand their compulsion. But I also recognize that my way of thinking is a minority view.

I hate shopping, too. I can barely tolerate food shopping, as I try to store non-preishables in my limited cabinet space so I don't have to quite as often, maybe once every 10 days or so. I drink a lot of milk, so that often dictates my supermarket trips although I can always hit the Dairy Barn or local mini-mart for that.

At least being ER, I can do my shopping (food and otherwise) at less popular times (midday and midweek) to avoid the more busy times of evenings and weekends. When I was semi-retired, I was also able to avoid those busy times.

 

[aida2003]

I'm always disappointed with articles like this because they never actually reveal any secrets. I always read them hoping someone will have a nifty little insight that I can use. It's seldom the case.

+1. That's exactly how I feel after reading such articles. In a nutshell, the article said that people earned X or Y amount and saved so and so %. Well, OK, one family instilled frugal habits in their kids and another lady in Atlanta earns extra $ after her day work. Did it specify how the savings rate was determined? If it did, I missed it. I just assumed that their 40-60% savings of their net income was IN ADDITION TO the max contributions to their 401k plans.

Also, I am just curious about the $250K family saving 60% of their net. I wonder what their take home money could be.

 

[Beedoggy]

Totally agree, folks making below a certain wage (varies from place to place) will find it hard to save 50% and not live under a bridge. But if they save some, scrimp, plan their purchases and make the absolute most of what they have, they are super in my book. And millions of people fall into that category. I used to.

Fortunate now to be able to save 45% year after year of post- tax income. 2 kids, 1 salary since time began. Live in a beautiful home with house payments and taxes about 7% of gross. Great public schools. There are things savers do...

Like to cook so they don't eat out
Buy used cars and drive them for years
Plan every purchase
Have a budget and stick to it
If married/ partnered, have a spouse who is also frugal
Maximize benefits like 401(k) match
Don't run credit card balances, but maximize points/miles
Share and accept hand me down kids clothes
Teach their kids to manage money, give allowance for work and don't cave in at Target
Take stuff out of the basket before check out
Recognize that more stuff won't fill the hole in your soul

 

[Beedoggy]

I'd say $7k a month.

 

[Midpack]

Our savings rate is right at 70% of gross, I'm too lazy to calculate what it is after taxes. Wasn't nearly as high when we were younger, but we've always been big savers, and more and more as the years went on due to higher salaries and lower (wants) and expenses. Fortunately we've done plenty of traveling already so we've gotten that out of our systems. We enjoy experiences but not things so much, content to live 'a modest, ordinary life.'

 

[skyvue]

43 years old, divorced with one kid. I am saving 38% which doesn't sound bad but I am "spending" about $70K per year which is a lot more than I think I should. Child Support and an aggressive mortgage paydown are mostly to blame. Both of these will be done in 4 years at which point I should be able to save 60% of income for a couple years before I hope to retire (50-52).

I don't shop or waste money on "things". My biggest waste of money is "entertainment" most of which goes to the local sports bars. Embarassing to say that totals to about $500 per month in wings, pizza and beer.

 

[Major Tom]

My biggest waste of money is "entertainment" most of which goes to the local sports bars. Embarassing to say that totals to about $500 per month in wings, pizza and beer.

That sounds like heaven. Of course, I'm making this post while cooking and waiting for my dinner and am very hungry right now.

Wings, pizza and beer. Mmmmmm..........

 

[obgyn65]

+1

Recognize that more stuff won't fill the hole in your soul

 

[keegs]

Some of you are indeed extreme savers!!

We're on track with our retirement goals, married thirty years, have no need to rent self storage , use the roof antenna, leverage broadband with Vonage, drive fuel efficient, low end/ high value vehicles, burn wood to supplement home heating, keep the lights off, cut the grass, take leftovers to work for lunch everyday, exercise regularly (to save the body and the noodle) and in general minimize what we spend and maximize what we save...at a level that's tolerable to both of us.

We use a free online banking application from the credit union called Financeworks to monitor spending and for the most part use payroll deductions for savings.