Gather Little by Little

Photo by: AZAdam

This is a guest article by PT who blogs at Prime Time Money – a place where those in their prime can come to discuss money and all things personal finance. Consider subscribing to Prime Time Money via RSS.

Biking to work, cutting your own hair, growing your own veggies, buying your clothes on EBay. While most of us don’t live this kind of lifestyle, some people do go to these extreme measures to maximize the amount of money they can put away into savings. CNN Money did a series of articles focusing on these people they deemed “Extreme Savers.”

I’ve put together the complete list of these Extreme Saver profiles over at my blog, Prime Time Money. If you’re like me, you’ll get plenty of use from viewing these profiles: discovering new ways to save and hopefully being inspired to find your own path to extreme savings.

CNN Money did a good job of gathering savers from all walks of life. The ages range from early twenties to late fifties. Some are married with kids. Some are single. There are consultants, engineers, and even a research scientist. And just about every area of the country is represented, even a fellow Texan.

What’s impressive to me is that these people were able to save a great deal even though they have mid-level incomes. Most in the series were living off incomes of less than $60,000. For instance, Greg and Tara Black, a Virginia couple in their mid thirties have a combined income of $48,000, but have amassed over $220,000 in combined retirement and short-term savings.

The savers also use second streams of income to fund their savings. Rick Kuhlman, a 33-year-old computer help desk supervisor, is a part time financial adviser. Others use rental properties to bring in more income.

However, the main emphasis of the profiles is on how the people are able to save (or spend less), not necessarily how much they’ve saved or their incomes. So here are the goods… I thought I would list out some of their savings methods for your enjoyment (listed somewhat in order of extreme-ness):

• Cook at home
• Use the warehouse clubs like Sam’s Club and Costco
• Use the library for books
• Use online movie rental services like Netflix
• Buy from discount clothing stores
• Dine-out only two or three times a month
• Utilize free entertainment like events, museums, and parks
• Use coupons and apply for all rebates
• Bring in leftovers to work
• Walk and Bike to work and around town instead of drive
• Use cash back credit cards
• Purchase big ticket items like a boat at auctions
• Install florescent light bulbs
• Use the Internet to compare prices of non-perishables
• Shop flea markets and used furniture sales
• Rent videos only from the library
• Grow your own veggies
• Buy clothes on eBay! (yes, fifty cent shirts)
• Cut your own hair
• Hang clothes out to dry instead of using a dryer (kind of old school, huh?)
• Drink only two alcoholic drinks per month during your one evening out (boring…)
• Build your own home (this profile, pictures included, is worth a look)
• Live without cell phones or Internet access in your home (that’s just crazy!)

Wow, I don’t think I could ever do that last one.

Perhaps the best method is starting a savings plan early in life, like Jessica Nixon, just twenty-three, who started investing in stocks in high school.

So what are they doing with all the money they save? All the savers seem to have at least one short-term savings goal. Like the youngest saver, Jessica, who wants to purchase what she calls a “17-foot runabout boat” soon. Others are saving up for a house. Ultimately though, saving for the long-term is what most of them are all about. Brian O’Reilly, just 28 years old, hopes to semi-retire by age forty. Rob and Michelle Parker, a Florida couple in their thirties, plan to retire in ten years.

I have to say, the most inspiring profile comes from Holly Ordway, a thirty-year-old writer from San Diego, who, along with her husband, is able to save $70,000 a year of her six-figure income. Nice! For Holly, it’s not about living a cheap or miserly life. It’s about frugal living. Holly says, “Being frugal is all about making good choices with your money…” She claims to filter out the incoming consumerism message by not listening to much radio or TV, and not reading magazines. I bet she’s reads Money magazine. :)

In addition to the eight main profiles, CNN Money also did an article on Extreme Savers with twins. Those are also worth a look, if only for the cute twin pictures.

In addition to these Extreme Savers, these other great lists over at Prime Time Money may be of interest:

• CNN Money’s Tycoons in the Making
• CNN Money’s Millionaires in the Making
• Other Millionaire Series’ (not CNN Money)

Now that you’ve seen what these supposed “Extreme Savers” do, share your thoughts on these profiles or list some of your favorite tips below in the comments.