'Super savers' agree that if you want to increase your savings, you're better off focusing on 3 main expenses (2024)

  • Some financial experts say you should stop buying lattes if you want to get rich.
  • Not everyone agrees with this advice, including "super savers" who save 50% or more of their income.
  • Instead, they recommend focusing on three main expenses: housing, transportation, and food.

'Super savers' agree that if you want to increase your savings, you're better off focusing on 3 main expenses (1)

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'Super savers' agree that if you want to increase your savings, you're better off focusing on 3 main expenses (3)

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Chances are, you've heard some version of this financial advice: stop buying lattes if you want to get rich.

The idea is that if you stop spending money on the small stuff, like your morning coffee, and invest those savings, you'd build a sizable nest egg over time.

Not everyone buys into the advice, though, including "super savers" who are setting aside 50% or more of their income.

"We're conditioned to cut out the smallest expenses, like Netflix or coffee," said Ali and Josh Lupo, who manage to save all of their take-home pay from their day jobs, thanks to a combination of smart savings habits and side hustles that earn them enough to cover their daily expenses.

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They prefer to focus on keeping three main expenses ​​— housing, transportation, and food — in check. According to the 2020 Consumer Expenditure Survey from the US Bureau of Labor Statistics, those are the three categories where Americans spend the most: housing is the biggest expense, making up 34.9% of the average budget, transportation accounts for 16% of average spending, and food makes up 11.9%.

'Super savers' agree that if you want to increase your savings, you're better off focusing on 3 main expenses (4)

"If you learn how to master those big expenses, it will free up a ton of money so you don't have to stress about the small stuff," said Josh. It's a strategy they first read about in the book "Set for Life" by Scott Trench.

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The Lupos, who are focused on saving the majority of their income in their 30s so they can leave their day jobs and retire before 40, managed to completely eliminate their housing cost by "house hacking." It's a strategy that involves renting out a portion of your home and using the income to cover some (or all) of your housing costs.

Thanks to house hacking, they went from paying $1,300 in rent to living for free. They own two duplexes in upstate New York, live in the upstairs unit of one of them, and rent out the other three units, which more than covers their monthly mortgage payment.

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27-year-old Avery Heilbron, who says he saves 80% of his income and is financially free, follows a similar savings philosophy.

He believes that finding ways to cut back on the big stuff is much more effective than obsessing over how much you spend on the little things. "The whole thing about making your coffee at home will make you rich is irrelevant," he told Insider.

Think about it this way, he added: "If you're living in a $2,000-a-month apartment and you stop going to the movies with your friends once a month because you want to save 20 bucks, it's going to do nothing."

What will help is moving into a smaller apartment that's cheaper or living with roommates, which is what he and his girlfriend did for a while when they were living in Boston.

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Trimming the major expenses might require upfront sacrifice, he noted. "Maybe you get rid of your car. Maybe you stop eating out so much and learn how to cook." But the sacrifice doesn't have to be permanent and will pay off in the long run, which he learned first-hand. "I wouldn't want to do it again," Heilbron said of living with a roommate. "But it made me a whole lot of money, which allowed us to eventually move into a one-bedroom, and now we have a bigger spot."

Heilbron owns three properties, two multi-family homes in Boston which are completely rented out, and one in Durham, North Carolina, where he and his girlfriend currently live. House hacking allowed him to live for free in Boston and save up to buy a single-family home in Durham, where the cost of living is cheaper, noted Heilbron.

If you commit to giving up some space or comfort by living with roommates, moving back home, or selling your car and using public transportation, for example, remember that "it doesn't have to be the forever situation," said Heilbron. "Just a little bit of sacrifice early on will help."

'Super savers' agree that if you want to increase your savings, you're better off focusing on 3 main expenses (2024)
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