How One Couple Saved $98,000 in Five Years

Two New Yorkers -- both self-employed web designers -- saved $98,000 to buy a $445,000 two-bedroom Manhattan apartment. Their story was recently featured in the New York Times. The money-saving tips in the article are interesting and I think the same strategies can be used for retirement plans, college-savings or other long-term goals.

Here's what they did.

1. Stopped smoking
2. No more Happy Hours with friends after work
3. Started cooking for friends rather than eating out. Entertaining at home saved a fortune.
4. Stopped buying new clothes
5. Saved tax refund checks
6. One spouse took a bank job and they banked that salary and lived on the income from the free-lance web design income.
7. Halted buying new gadgets and other stuff for the house.

Whenever they wanted to buy drinks, gadgets or cookware, they asked each other: “Do I want an iPod or a house? Do I want a latte or a house?”

--New York Times

Without parental assistance, the couple saved about almost $100,000 from 2002 through 2006.
Here's are the numbers: "In 2002, they saved their $3,000 tax return and another $5,000 between them."

Over the next two years, they each saved $15,000.By 2005, they thought about using their accumulated $38,000 in savings for a down payment. When they realized that they couldn’t afford anything, Mr. Agüero got a job at a bank and saved his entire annual take-home income of about $40,000. They lived off Ms. Lee’s salary. That drove their savings up to $78,000. By 2006, they had saved another $20,000, which pushed their savings up to $98,000.

The New York Times article also included other stories about the home-savings plan used by other people, including a single woman. Very helpful reading.
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