Saving large amounts of money.

[scfr]

When my husband wanted to quit his salaried job and start his own business, he came up with a dollar amount that he wanted to have saved up to cash flow his business. I came up with a plan on how we would get to that amount, and we both agreed that it was worth sacrificing to reach the goal. DH started his business almost 17 years ago, about 2 years after we implemented our plan.

In a nutshell, this is what we did:
- Sold our condo. Took the proceeds and put it in the highest paying CDs we could find.
- Created a budget that required us to live on my income only. We moved to an apartment that was a dump, did not spend on extras like travel & entertainment (and certainly not any crazy stuff like lattes), and cut other expenses to darn near bare bones.
- We saved 100% of DH's income (except contributions to 401k up to company match) and put it in to high-interest savings account.
- We also started a very small side business and the small income it produced went in to savings. The income was so small. I remember my mom saying that we were crazy for doing it. It was hard, and we worked on it together in the evenings after our day jobs. But what we were doing was learning: about keeping books, small business taxes and licenses and processes, etc.

This is what we achieved:
- Savings for the new business cash flow.
- Knowledge about how to run a small business.
- Confidence that we could survive on my income alone. This gave us the courage for DH to go ahead and quit his salaried job and start the business once we had enough saved up.

DH's business, started almost 17 years ago, has ended up being by far our best "investment." It was doing all of the "boring" stuff (working at salaried jobs, cutting expenses, and saving) that led up to us being able to make such a good "investment."

[msomnipotent]

Not counting our retirement savings, we have what some would consider a large amount stashed away for our next home. I opened an online account and had money automatically transferred on each pay day. I made the log in extremely long and cumbersome on purpose. Then I forget about it, unless my husband gets a bonus and half gets transferred. The other half goes towards college and fun money.

Just for the record, we have an Aldi's across the street from a Whole Foods in my town. I have shopped at both a few times. Wasn't impressed with either. They are both near the local Costco, and I tend to shop there more often than not.

[StormRichards]

Just for the record, we have an Aldi's across the street from a Whole Foods in my town.

[disneysteve]

Just for the record, we have an Aldi's across the street from a Whole Foods in my town.

I think those two stores typically attract a different crowd though there is certainly overlap. Personally, we never go to either - the high end or the low end. We shop at the mid-range places (Wegman's, ShopRite).

In my town, we have both within about a mile of each other but my town is also very economically diverse with everything from multimillion dollar mansions to trailer parks.

[StormRichards]

Wikipedia refers to Aldi as a discount supermarket chain. It also appears that the low income/low end opinion is a U.S. thing. Perhaps mainly from people reluctant to change the way they shop for groceries?

In December 2002, a survey conducted by the German market research institute Forsa found 95% of blue-collar workers, 88% of white-collar workers, 84% of public servants, and 80% of self-employed Germans shop at Aldi.

[LuckyJB]

I like this....
any recommendations on educating or approaching your concept of diversifying into taxable index funds and crowdfunding investments. I would deb new to this but I am currently looking into new potential investments other than a Roth IRA I am starting.

This was our formula.

Step 1. Went to college and studied something in the healthcare field(Pharmacy for me, Optometry for my wife).

Step 2. Even though our income went from student loans(negative) to positive 230k+, we still lived like a college student to pay off student loans. No new cars, no lavish vacations, no crazy dinners. Fast food, low rent, couponing, and drove our high school beater.

Step 3. Continue with step 2 after loan payoff. Pay off mortgage or any other debt that has interest while maxing out 401k.

Step 4. Continue with step 2, diversifying into taxable index funds and crowdfunding investments.

Step 5. Continue with step 2. We now make 380k/year...bought used cars with cash, no lavish vacations, no crazy dinners, no gym memberships, no star bucks coffee, no alcohol outside of our house. In fact we don't even have Netflix memberships, just Amazon prime. Yearly expense is ~40k or so and 25% of that is property tax. We eat out once or twice monthly. Our bill never surpassed 50 dollars except once at Disney. I change my cell phone out every two years. I spend 200 dollars on a Chinese android phone while selling my old one for 50% of what I spend on the new one. We go on one to two vacations/year. Mostly 7 night cruises that cost 1300 for two(inside cabin). We still use coupons, and shop for the lowest possible price on anything. We have no problem going to low income grocery stores and the Dollar Tree.

Result: NW 1.4million @ 34 years old.

[LivingAlmostLarge]

There are many roads to Dublin. We took the safe route:

1. obtain a college degree
2. be fortunate that what you love to do also pays well
3. buy less house than you can afford
4. buy less car than you can afford
5. live frugally; don't let increases in income change your lifestyle
6. invest all that money you're not spending

Feh's method is our method. We're on the slow road to riches. Took a lot of years making peanuts being in graduate school for us both. And now me not working means no dual income. But still we're better than most and right now things are churning well.

[bennkar]

There are many roads to Dublin. We took the safe route:

1. obtain a college degree
2. be fortunate that what you love to do also pays well
3. buy less house than you can afford
4. buy less car than you can afford
5. live frugally; don't let increases in income change your lifestyle
6. invest all that money you're not spending

I did most of these, though I had to go back for a second degree to now work in an area that pays decently. Some other items I would include (and do!):

• Don't marry a spendy SO (In my case I did, but we divorced and I have done so much better since )
• Learn to fix things instead of paying for repairs (car, appliances)
• Learn to make your own things (I made my furniture, I have canned food, clothing - I can alter clothes if needed)
• Don't pay to watch TV. Cable costs money, and it makes you want to buy useless things like crazy. (I only have over the air TV - and rarely watch it)
• Learn to enjoy what you have

[SavingMum]

We're at the beginning of the road. I'm 21, have a full time job, a part time job, and just opened my own song writing business for some extra cash. Hubby has a small steady income, but I'm the main breadwinner.

- We make all big purchases second hand
- We note down every penny we spend
- Meal planning - I buy exactly what I'll need for the week and that's it (no more moldy veg in the fridge)
- We put away around 10% of our income every month, plus more if there's any left at the end of it
- Pension plan + putting money away for the baby, for when he's 18 or 21 (both are government schemes)

I'm considering doing some investing but I have no idea how, and not much time to devote to it. My mum suggested Premium Bonds (UK) and I wouldn't have to spend any time over it - just put in some money and let it take care of itself - but I'm not sure if the possible returns would make it worth it.

[scfr]

We're at the beginning of the road. I'm 21, have a full time job, a part time job, and just opened my own song writing business for some extra cash. Hubby has a small steady income, but I'm the main breadwinner.

- We make all big purchases second hand
- We note down every penny we spend
- Meal planning - I buy exactly what I'll need for the week and that's it (no more moldy veg in the fridge)
- We put away around 10% of our income every month, plus more if there's any left at the end of it
- Pension plan + putting money away for the baby, for when he's 18 or 21 (both are government schemes)

I'm considering doing some investing but I have no idea how, and not much time to devote to it. My mum suggested Premium Bonds (UK) and I wouldn't have to spend any time over it - just put in some money and let it take care of itself - but I'm not sure if the possible returns would make it worth it.

You are off to a great start! I wish I had done so well at 21.