It can be done. One couple managed to save $98,000 in 5 years to buy their first house in New York. These two can-doers were by no means earning high salaries (a little over $100,000 combined by the end of the 5 years and much less at the beginning) all the while living in Manhattan, one of the most expensive cities in the world.
To save for the down payment on the $445,000 apartment, they quit smoking, stop meeting their friends for beers after work, stop buying new clothes, gadgets, and pretty much everything they didn’t absolutely need. The question they often asked themselves was “Do I want the house or an iPod? or Do I want a latte or the house?”
The beginning was especially tough because they weren’t used to skipping all the luxuries but they slowly got used to the habit of not consuming much more than the necessities. During the first year, they saved $8,000. In the next two years, they saved a combined $30,000 and $40,000 in the fourth year alone. Their savings was up to $98,000 by the fifth, allowing them to pursue their dream of owning a place they can call their own.
If they can do it, so can you. How many times have you thought about the difficulty of saving money and simply gave in to the spending temptations? With a can-do attitude, you can achieve financial freedom too.
Thank you NY Times, the article serves as an inspiration for all of us. It is also a wake up call for people who make $100,000 a year without being able to save a dime.
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And after buying a home, did they revert back to little spending on luxury living or continue the same way for decorating their home or saving for future????
home ownership is a basis of a great retirement…if you own your own home or condo even…the upkeep expenses are much less than renting…you will not be eating catfood if you learn frugal habits when you are young…..keeping friends is very easy…for the cost of a few beers you can be part of a gourmet club that meets regularly in each others homes for more than restaurant quality meals as each member brings part of the feast including beer or wine as decided in the group….for clothes learning to shop is part of the frugal life style that leads to home ownership
They could have saved up the money and then moved the hell out of manhattan and into a place where the cost of living is much lower. If they were making a combined 100k/year they wouldn’t be taking much of a pay cut to live elsewhere.
We bought a house worth a little more than $100,000 in six years without compromising on our lifestyle one bit. We took a small loan and invested in a small plot of land worth $14,000 in 2004. Its value appreciated to $110,000 in 2010. We sold it and bought a home in a suburb for $90000.
To both bob and Ravi:
The article simply states that they stopped going out for beers every night. I’m certain there are hundreds of other ways to enjoy time with your friends that would cost much less.
This is a real sad story. they stopped living so they can have a house…SAD. hope they are able to get back their life once they have bought their house.
A very sad story indeed. I would rather have a life with friends than a house, just to say I own rather than rent. They missed out big time.
I was raised with the saying if you can’t afford it, you can’t have it. I have done well and not gone into debt in very tough economic times. I applaud you for calling attention to this article. We are in a culture that tells us we should have everything but we really need to make choices. Many people do not realize how much money they are actually spending on those little extras. We could all probably save quite a bit. There are so many things we buy in a year that we don’t really need. How many clothing items just because we want something new, coffees and dinners out. The best thing I have done is to get direct deposit. If you don’t carry cash around, you are less apt to spend it.
Lynnae: Definitely agree with you. It’s amazing how these types of stories motivate us since our efforts of being frugal doesn’t compare to these people at all…
Thanks for pointing out such an inspirational story. It just goes to show that anything is possible if you put your mind to it.