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Saving more than half your income doesn’t have to mean living in your parents’ basement and subsisting on ramen.
“A lot of the old FIRE content is focused on hyper-frugality: Sell your car and bike 20 miles in a snowstorm to work. Live in a storage unit,” Cody Berman, the author of “Retire by 30,” told Business Insider. “I don’t think you have to do any of that. You just have to live slightly differently from your peers.”
So slightly, in fact, that your peers might not even notice.
That’s what Berman and his wife, Lauren, found when they began saving more than half their income in pursuit of financial independence.
“If you were to interview one of my friends during that time and ask, ‘Are Cody and Lauren doing all these weird things to save money?’ They’d probably say no,” he said.
Berman and other super savers told Business Insider that a handful of intentional choices — particularly around their biggest expenses — helped them build high savings rates without feeling like they were constantly sacrificing. Here are a few of their top strategies.
“Tracking is everything”
If you’re just starting to save more aggressively, Berman recommends recording your expenses.
“At the beginning, I think tracking is everything,” he said. “There’s no way you can know where to improve unless you track.”
He compared it to tracking calories for the first time: Once you’ve logged what you eat for long enough, estimating what’s on your plate becomes much easier.
“I tracked religiously for years during our FI journey,” he said. “At this point, I’m not tracking every penny that goes in and goes out. I just have a pretty solid grasp on how our money’s moving around.”
Keep major expenses in check
To make significant progress, Berman used one of the oldest tricks in the book: lowering “the big three” expenses — housing, transportation, and food. It can result in extreme savings, without feeling like you’re doing anything too extreme.
For housing, he and Lauren house-hacked, sharing their home with roommates. They still lived in a nice place, he said, but the arrangement dramatically changed the economics: “We had friends also living in a nice one-bed, one-bath, but they are paying rent. They might be paying $2,000 a month in rent, where we’re making, like, $800 a month.”
As for transportation, his truck wasn’t brand new, but it wasn’t falling apart either: “It’s not nice, it’s not bad, but it’s paid off.”
He and Lauren still went out with friends. They just spent more selectively. A friend might order an appetizer, entrée, dessert, and several drinks, for example, while they might split an appetizer and order one or two drinks.
“We weren’t living super differently,” Berman said. While the small differences were hard to spot from the outside, they were substantial on paper. “If you peeled back the curtain and looked at our finances, it was like, ‘Oh, they’re actually spending $4,000 less a month than some of their peers because of the choices that they made.'”
Align spending with values
Kristy Shen and Bryce Leung, who saved up to 70% of their income to build a seven-figure portfolio and quit their jobs in their 30s, are adamant that deprivation doesn’t work. Leung compared extreme spending cuts to crash dieting: “You can do it for a little while, but then eventually, you have a relapse, and you eat an entire birthday cake.”
Instead, he and Shen directed money toward what mattered most to them. They estimated they spent $5,000 to $10,000 a year on travel, which they considered non-negotiable.
Berman has taken a similar approach. When he and Lauren first started dating, he said, they each wrote down the 10 things they valued most, then compared their lists and asked themselves whether their spending reflected those priorities.
“We do spend a lot in the categories where we value the things we really like,” he said, but the key is to cut back in the categories they care less about, like cars, for example. “I still drive the same paid-off car, even though I could afford a new, flashy car.”
Live somewhere cheaper
If your job and lifestyle allow it, moving to a lower-cost-of-living area can dramatically increase your savings rate.
That’s how Miguel Marquez is saving about 70% of his income.
Originally from Spain, the university professor completed his Ph.D. in the US, where he struggled to save much. After more than a decade in the States, he moved to Brazil for a teaching position. The lower cost of living helped launch his financial independence journey.
For the past four years, he’s lived and taught in China, where he’s also experienced a lower cost of living. He pays about $200 a month for a partially subsidized apartment on his university campus and relies on inexpensive public transportation instead of owning a car.
“My money has never gone further,” Marquez said. He’s still far from having a seven-figure net worth, but it doesn’t necessarily feel that way. “I’m not a millionaire, but I feel like a millionaire.”
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