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Strategy Secrets of Extreme Savers


Strategy Secrets of Extreme Savers

While many Americans are wondering not when, but if they will ever retire, Beverly Solomon, 57 and husband Pablo could chose to at any time. A lifetime of discipline has paid off.

"We've been savers since we married 36 years ago. One of the first things we did was put up a poster with 100 squares on it. Each square represent $100 and when we put $100 into savings we put a gold star on our poster. While a bit corny, it worked. In less than two years we put a down payment on our first house," says Solomon.

What's their strategy? They lived on one income, saved and invested the other. She and her artist husband always had at least one side line business, says the former model who runs an international art and design business. They shop yard sales, resale shops, use coupons, stockpile nonperishables like paper products, wine and cleaners when on sale, and never pay full retail for anything. Their penny pinching enabled them to snap up bargains on raw land and houses in downturns.

Says Solomon, "Saving money is one of our values. Once you see saving as fun, you are home free."

Extreme saving is a sport of sorts where the end game prize is financial security. Extreme savers share their secrets.

Dr. Stuart Jeanne Bramhall says she always lived modestly, but when her daughter left home in 1999, she got serious. In the last five years prior to her retirement at 63, in 2012, she saved $100,000 of her $140,000 a year income. Even when she was making a lot less she managed to save more than $50,000 a year. Today she gets by on $35,000 (her home is paid for). What does she have in her bag of tricks? She saves about $5,000 a year making her own beauty and cleaning products in a food processor (from bar soap, calcium carbonate, vinegar and baking soda). "They work a lot better than commercial products and it keeps toxic chemicals out of our waterways," says Bramhall, an author. She uses prepaid cellphone plans, and Skype at 2.5 cents a minute for long distance calls. She saves nearly $50 a week eating mostly vegetarian. She grows her own vegetables and potatoes and buys rice, beans and other staples in 50 pound bags. She doesn't own a car and manages this by choosing carefully a home that was ideally suited to essential transportation. She walks or cycles everywhere. She cuts down on energy costs by not operating an electric drying, hanging clothes instead. Her best advice, "Get rid of big ticket items, like your car."

Does she feel deprived? Hardly. "I live quite comfortably and I'm really happy. It's wonderful not to work and to be able to do what I want with my time."

If you think clipping or clicking on coupons is a waste of time, Stephanie Nelson would heartily disagree. "I've been saving at least $100 a week on groceries since my first son was born 18 years ago. That's a total of $90,000, which is enough to pay for him to go to college," says Nelson, the founder of CouponMom.com. She says the key is to be a strategic shopper. "Know prices, over time you learn when you see a deal. Educate yourself about stores' savings programs and polices. Set a spending limit, not a percentage saved goal so you don't get caught up in a numbers game that leads to buying too much salad dressing and not enough salad."

David Bakke, editor of Money Crashers Personal Finance, managed to save while getting rid of $30,000 in debt. "I wear shirts and pants that I've had for over 10 years. I also preserve them by air-drying them, which has the added benefit of saving a significant amount of money on my monthly energy bill. I save about $500 a year." He also signed up for MagicJack which costs $40 annually for his home telephone. That switch saves him $320 a year. Another big cash saver was getting rid of $70 a month for satellite television. "I scrapped my membership and signed up for Netflix. They have more than enough options to satisfy my TV needs. Their basic membership is $8 per month, so each year, I'm saving almost $750." Believe it or not, with the permission of his employer, he brings his garbage to work so he saves $300 a year by not having garbage service. What's his advice? "Use common sense, shave and eliminate spending wherever you can."

Jim Dailakis, an actor and comedian doesn't consider himself cheap because he does treat himself and others from time to time. "My sister calls me economical, I like that." Whatever you call it, it works. At 42, he has saved enough to buy two houses, and paid off one. His philosophy is simple, "Buy what you need before you buy what you want. When you have enough, then spoil yourself as a reward." But mostly, he's a minimalist. "It's not because I have to be, but I feel a lot happier this way. I'm a true believer that the more possessions you have and the more expensive they are, the more of a slave you'll become to them."



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Comments
19 Comments.
Comment #1 by martinr (anonymous) posted on
martinr
Sheryl.  Thanks for writing this great article.   It gave me some good ideas.   I think I may check out some coupon sites just for the fun of it.  

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Comment #2 by Anonymous posted on
Anonymous
Was behind a lady at a grocery checkout recently....her total bill was around $180 and, after her multitude of cupons, the net cash due was about $30. She had a big proud smile and good for her. 

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Comment #5 by Anonymous posted on
Anonymous
Although some living out in the country have no garbage service offered by their municipality, having no garbage service is not an option for city/suburbia homeowners, since it is a required billed service and often shows up in the property tax bill.  Those that truly live outside areas with regular garbage service still usually have a municipal solid waste transfer site or landfill that they can haul larger items for disposal or recycle.  People who dump those items in unauterized areas or don't properly dispose of items like tires,hazardous items, or larger items are breaking the law, and should not be claiming a garbage disposal savings. Someone using the dumpster of their employer to dispose of such waste are just passing on the cost of disposal to someone else.

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Comment #6 by Anonymous posted on
Anonymous
No, #3, you don't come across as being bitter....I have witnessed similar situations myself and I imagine others have also. BTW, if you would have followed her out, you would have probably noticed that her Mercedes was also parked in the handicapped zone up by the front door.

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Comment #7 by Beth (anonymous) posted on
Beth
Sheryl/Ken,

Great article. Lots of common sense stuff but still useful reminders.  For every dollar I lose due to paltry deposit rates, I try and save by frugality.  I am 92 y.o., a retired jhs teacher, alone but surviving. 

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Comment #8 by Anonymous posted on
Anonymous
I know someone that works for family services in a rich area of texas and they believe there is rampant abuse. Maybe the best way is to bend the rules and join the welfare state.

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Comment #9 by Anonymous posted on
Anonymous
@Beth#7 -

Appreciate your spirit. I've seen many comments in other posts where some people keep complaining about low savings rate but I like your way of dealing with low rates smartly and keeping the spirits high. That too at such age.

We wish you well !

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Comment #10 by Anonymous posted on
Anonymous
With a $80 digital TV adapter and a pair of rabbit ears, I can get most local TV stations. Used to have trouble getting analog TV - even with a roof antenna - due to my location.

2
Comment #11 by Anony/Paoli (anonymous) posted on
Anony/Paoli
My savings secret was and still is that we don't buy anything unless we save ahead for it and pay "cash" for it.  Now that can mean purchasing it on a credit card but only if I have put enough money into our checking account to be able to write a check for the total amount.  That can be a vacation, car, special clothes, or anything that we need.  If the "cash" isn't available ahead of time, we don't get it!  It took a lot of self-discipline and cooperation by my family to be able to do this but if you can, it's the only way to go, imo.  It was sure easier to do this in the days we were getting so much better interest rates.  Now we will probably just have to forgo a lot of things except necessities. 

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Comment #12 by Anonymous posted on
Anonymous
Actually, I doubt if anyone who says they have 3.5 million and a meager lifestyle will have to 'forgo' a whole lot of things...maybe in their minds but not in the real world. If they can't enjoy some of it now, then when?

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Comment #13 by Anony/Paoli (anonymous) posted on
Anony/Paoli
#12:  I hope you were not referring to me in your post.  I do not have that kind of money!  Penny pinching can only take one soooo far!  But I do think someone on here earlier was saying they had that kind of wealth.  I doubt if they have to read our posts even with these low interest rates.  Like you said, there has to come a time to "enjoy" it!

2
Comment #14 by Anonymous posted on
Anonymous
I wasn't saying that is how much money I had, I was saying with long term cd rates at 2.25% I would need to have 3.5 million to bring in the same amount that it cost me to live because I am not on social security yet, wasn't saying I had that much. They tell us $750,000 needed to retire and I say how at these rates.

1
Comment #15 by Anonymous posted on
Anonymous
Ken, where are the comments for #3 and # 4?

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Comment #16 by Anonymous posted on
Anonymous
We smoke ganja instead of cigarettes. Saves tons!

1
Comment #18 by niniss posted on
niniss
Beth #7 - 92? for real?  and using computers, wow!  I'd be happy to live to 60 with good health.  I might be willing to stick around at 70 if my health is still excellent by then.  But above 70? no thanks no.     

1
Comment #19 by Anonymous posted on
Anonymous
#18 -- You must be the "youngster" of our group!  What is wrong with surviving until 90?  90 is the new 70 nowadays.  I guess by your post, we had better find Dr. Kevorkian cause I think a lot of us on here have said goodbye to 70!  If you keep your attitude about age, it'll do you in long before any illness, imo.  Beth is doing great at 90 because she probably doesn't let a "number" tell her how old she is.  Keep going Beth.  We need more "youngsters" like you around!

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Comment #20 by Anonymous posted on
Anonymous
Dr. Bramhall must be tremendous shape if at 62 she can carry 50 pound bags of beans for any distance. Also how many people spend $5000 a year on cleaning and beauty products? 

it should also be noted that while she may be saving money, most of her money saving activites are very time and labor intensive.  That is fine if you enjoy them but considering that we may be able to earn more money but not more time on this earth, within reason may of us would feel its worth trading some of that money for doing other things that provide fulfillment.

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Comment #21 by Beth (anonymous) posted on
Beth
Yes, I do use the computer at 92 y.o., taught by my 24 y.o. niece.  Not very difficult at all.  I also enjoy Ken's pithy commentary and suggestions.  I used to have to call the banks by phone to get their latest Cd rates.  Now I can find out their terrible rates by computer!  By the way, I read a post elsewhere on this site about Israeli bonds paying over 3.5%?  Is this true?

1
Comment #23 by dollarshort posted on
dollarshort
Some of these "strategies" are a little unfeasible. I mean, not everyone can live without a vehicle. Some people don't have the luxury of cycling to work, especially if work is over 20 miles away from home. And how do you lug home heavy bags of groceries without a vehicle?And if you live in a crowded city where space is limited, it simply isn't possible to hang dry all your clothes.

I think this article is lacking in substance. I would have been more interested in learning ways to keep things that are necessities(which would be a vehicle for me) but paying less to have them. Tell me what programs of clubs, if any, that can reduce my cost of insurance, gas, maintenance, etc. Tell me which grocery stores have the best prices on perishable items like milk bread and eggs. That's the kind of article I'm interested in. I can't speak for anyone else, but this article was all but useless in identifying ways to cut expenses for me.

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