Super Savers: Achieving Financial Freedom Without Sacrificing Quality of Life
Saving more than half of one’s income every month while still traveling and dining out – is it really possible? Some “super savers” have proven that it is achievable to increase savings without sacrificing quality of life. They do not cut corners in every aspect of life, living off instant noodles, but instead, they maintain quality in their prioritized expenses while cutting unnecessary costs from housing, transportation, and food – the three major expenditures.
Cody Berman, the author of “30-Year Retirement,” shared with Business Insider that many stories of achieving financial independence and retiring early often focus on extreme frugality: selling the car and biking 20 miles to work in a blizzard, living in a storage unit, etc. He believes it’s not necessary to go to such extremes. Simply living slightly differently from the majority can lead to significant savings.
Berman suggests that to increase savings, the first step is to cultivate the habit of tracking daily expenses. He compares this process to calorie counting – noting what one eats makes it easier over time to estimate the caloric intake. He emphasized the importance of recording every expense initially as it is impossible to identify areas for improvement without tracking spending.
By diligently tracking income and expenses over the years, Berman has reached a point where he no longer needs to meticulously trace every penny, having a clear understanding of his family’s financial situation.
Using classic financial strategies, he lowered the “big three expenses” – housing, transportation, and food – to boost savings without living in hardship.
Sharing a nice rented house with roommates significantly reduced housing costs for Berman and his wife, even generating an extra $800 income monthly. Similarly, when dining out with friends, they make conscious choices like sharing appetizers and opting for fewer drinks.
These subtle lifestyle changes may not be obvious outwardly but can bring substantial financial benefits, reducing monthly expenses by $4,000 compared to peers of the same age.
Kristy Shen and Bryce Leung are also super savers, having saved up to 70% of their income, accumulating over a million dollars in investment assets and retiring in their 30s.
They emphasize that scrimping and saving is not a sustainable approach to money management. They choose to spend money on things they value, such as investing $5,000 to $10,000 per year on travel, considering it as a non-negotiable expense.
Berman adopts a similar approach. When he first started dating Lauren, they each listed their top 10 priorities and compared them to their daily expenses to ensure they were spending money on what truly matters. For less important areas, they streamline as much as possible, like driving an older car instead of upgrading to a new one even when the capability is there.
This article was inspired by the coverage from Business Insider.