Secrets of Extreme Savers

Here's a piece CNN Money calls "Secrets of Extreme Savers". These people may be extreme savers (pocketing up to 50% or so of their salaries), but they aren't really using "secrets." Here's a sampling of how they set aside so much of their income for savings:

• Before they make any purchase, even big-ticket items like cars, they save up the cash.
• "Sure, we could afford a bigger house and more expensive cars, but we're content with the things we have."
• It's their ability to curb impulse buys that has fueled the family's savings.
• She regularly uses coupons, always files for rebates, buys plane tickets with credit-card points and earns free stays at hotels in exchange for writing reviews about the service as a mystery shopper. "I have found many ways to stretch a buck and still live the lifestyle I enjoy."
• "I could afford a bigger house or fancier car, but what I've got is just fine."
• "We've always lived below our means."
• They sock away more than one-third of their take-home income by employing a simple but powerful technique: Making saving automatic.

One other thing all of them do (but I couldn't find a good quote to use) is that they limit (or in many cases eliminate totally) debt. They pay off their cars and homes, and don't spend a boatload of money on interest.

As I said, this is not really any "new news" for FMF readers. In fact, one reader emailed me the link to this piece and said, "I think I've seen every single one of those bits of advice on FMF in the past month." ;-)

It's kind of amusing that the mainstream press thinks these are "secrets." Is it really that foreign to live below your means, be content with what you have, and save a large portion of your income?

Ok, so it probably is that unique and surprising for most Americans. But for those of us leading the wealth pack, these seem like everyday no-brainers. ;-)

Comments

[Budgeting in the Fun Stuff]

Huh, who would have thought that living below your means could lead to wealth, right? ;-)

[David C]

Secrets? And we didn't even have to go to Wikileaks?

Seriously, I do have to laugh when a major news outlet discovers (or re-discovers)that the best way to acheive financial well being is to spend less than you earn!

[crashdamage1957]

I had the same take; where its more like a smack in the forehead "duh" type of secret that people already know. except that it easier to live in some denial fantasy. Perhaps what is "news" about this is that while the mainstream tend to focus on the "instant" wealth made by winning a lottery or becoming rich and famous on American Idol, that is not in fact how most wealthy people obtained , and perhaps more importantly, retain their wealth.

[RkxgCozE2f]

I love the comments on that CNN article:

"Do people really get paid to write this stuff? The secret to saving 50% of your income is simple - make twice as much as what you spend."

Really, it's not about how much you save, but that you get in the habit of doing so. I find it hard to believe that is a significant number of people out there who strictly live paycheck-to-paycheck. That is, they *must* spend everything just to make it to the next pay period. For anyone who isn't in that situation (which I suspect to be most people), saving can start as simply as by looking at the leftover money right before getting paid and saying "I'll set this aside to buy some financial security for myself" instead of "I'm going to buy myself a treat for being under budget."

[Freedombound]

I think that it was a great article...but CNN really seems to target high income earners. If I made $100,000 per year, I would probably save 50% easy & still live a great life. I am happy now on $30k per year. It amazes me how much money people waste. Money magazine should definitely print more articles of this nature in the future.

[Money Reasons]

Yep, I agree, the contents of that article is what we (frugal financial bloggers) live everyday...

But kudos to Money Magazine for generating buzz around the topic, even if the contents of the pretty wrapping is what we have been preaching (or living in my case since I'm still a somewhat new blogger) all along...

[squirrelers]

Perhaps these people aren't really that extreme, in reality. Most people do not save enough, period. In this climate, along with the dearth of defined benefit plans from days past, it's likely not ok for middle class folks to save just 10% or so of income to be on track to a comfortable retirement, unless one started very early or earns a well above average income.

[SAFTM]

Yes. Maybe it is just a secret to people who write articles like this for CNN...

In other news, the secret to win in Baseball is to have scored more runs by the end of nine innings!

It's a good reminder I guess. Perhaps some of these could be "secrets" of millionaires - because many people expect millionaires to be very high earners and aggressive, sophisticated investors, when in reality they're just smart, hard-working regular people who spent much less than they earned for a long time.

[thayne carper]

my professor in college researched every strategy avialable to saving money. Had all the energy efficient upgrades in his house, built his house for half the price by doing it himself. He had a HD satellite which he bought for cheap which gave him 5 free HD channels (no cabel bills).

He then took this money and invested it in mutual funds. There really aren't any secrets like people have mentioned. It's just putting that information to use and into daily practice is what separates the rich from the poor.

[MikeS]

"I could afford a bigger house or fancier car, but what I've got is just fine."
Says the woman driving the Infiniti. More power to her for having the card paid off, but is she really an extreme saver?

[Eugene Krabs]

Hehe, I don't understand why those tips qualify as "secrets". They seem simple and straightforward enough. For that matter, I'm not sure why they are considered as "extreme". Maybe it's extreme for Joneses, but it's fairly par for the course for FMF regulars, wouldn't you say?

Anyway, thanks for sharing the amusing article. Certainly brightened my day.

[Money Obedience]

This is the same magazine that used to run a series called "Millionaires in the Making". All the individuals, couples and families featured in that series were big time real estate "investors" on the way to becoming millionaires. After a few years of jumping on the real estate bandwagon, CNN Money abandoned the series a few years ago. Now they have discovered other ways to riches besides "investing" in real estate. But this conventional way is a secret. Not many people seem to know about it, but fortunately CNN Money discovered the secret and lets us all in on it now. Thank you so much!