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."