Photo of a woman who is a super saver and has been investing in her future.

5 smart money tips from super savers

He drives a 2009 Ford Mustang. He whips up oven-baked salmon with roasted brussels sprouts and brown rice for dinner instead of checking out the latest eatery to save some cash. At age 29, he doesn’t own a home—yet.

Still, he could afford to splurge on any of those expenses.

So, where does Travis Hunt, a commercial territory manager from Kansas City, Missouri, spend his extra income? Investing in his future traveling, philanthropic self: He contributes 20% of his paycheck to his retirement accounts.

While many people think all millennials are out posting Instagram pics of avocado toast at Sunday brunch and racking up debt one Venmo exchange at a time (the clichés go on and on)—we found many forward thinkers making sacrifices now in hopes to have a good life during retirement and become financially independent even sooner.

We identify these people as super savers. They save 90% or more of the annual IRS max contribution or and for 2019 included those that defer 15% or more of their salary to their retirement account. 1, 2

“Saving for retirement never starts soon enough,” says James Hernandez, a 48-year-old production carpenter in Burbank, California, who started contributing to his 401(k) account at age 18. “And it can build quicker than you think.”

You can be a super saver, too.

“Super savers are making smart financial choices, but they aren’t sacrificing their quality of life,” said Jerry Patterson, senior vice president of retirement and income solutions at Principal®. “We make time for the things we find most important, and this group has prioritized savings and financial independence in a big way.”

See which thrifty tips can work for you.

1. Make room for what’s important to you.

Assess your priorities. What brings you joy? For Lucy Hancock, 29, an international student and scholar services coordinator in Omaha, Nebraska, it’s experiences.

“I don’t have cable. I thrift shop. I never buy full price,” she says. Instead, she splurges on travel (she’s visited 10 countries, taught English in India, and worked odd jobs in Australia) and socializing with friends. A decade from now, Hancock expects to “look back and be happy I did those things,” she says.

Try this: “Figure out what is a priority that you can’t pass up. What could you cut and not feel the loss of it? You can be mindful without letting it control your life,” she says. 

2. Figure out where your money is going.

You don’t have to have a formal budget to track your spending. But you do need to monitor spending habits. “A $10 swipe multiple times adds up to $50 pretty quick,” says Hunt. He uses a digital version of the envelope system (tucking away cash based on your budget categories) through the app Goodbudget. Other ‘super savers’ use budget apps like Mint, create spreadsheets, or simply do mental math.

Try this: Test a few systems and find one that sticks.

3. Go automatic with your retirement contributions.

When starting out, Hancock focused on saving just 1% of her paycheck above her employer’s suggested amount (Patterson recommends starting with 6 – 10% and bumping up 1% a year). Now, she’s shifted her goal—an automatic annual increase until her 401(k) contributions reach 20%. “You don’t notice the difference each year,” she says. “It becomes your new normal.”

Try this: When you start a new job, get a promotion, or go through any kind of financial transition, boost your contribution before you even see the extra money. That way, you’ll never know what it was like to have that extra cash every paycheck.

4. Trim debts—while still saving.

“I prioritized paying any immediate debt,” Hancock says. “When I started out, I was not putting 13 – 15% into my 401(k).” (But she was contributing 1% more than the amount to get the full company match.) When debts were paid off, she didn’t let herself see that extra money—it went toward retirement.

Try this: Balance paying the highest interest debt while still saving for retirement.

5. Get savvy—even with your splurges.

Even though Hunt and his fiancé take several long weekend vacations a year, they exercise due diligence—scouring the internet for deals and using credit card points and perks to snag discounts (and pay the credit cards off in full each month). “Our biggest one the past 2 years is the Southwest Companion Pass through credit card points. We only pay for 1 ticket for the 2 of us to fly,” he says.

Try this: Find ways to save cash on splurges through credit card points, loyalty programs, comparison shopping, or other strategies.

Bottom line: Just start saving.

Even if you didn’t begin saving for retirement away right away, it’s not too late. “Start putting money away while you still have some time left,” Hernandez says. “Something is better than nothing at all.”

Next steps:

1 Methodology: The Super Saver survey was conducted by Principal between October 19 and November 10, 2017 with 1,498 respondents to the survey. A survey was sent to Millennial and Gen X participants who work for a company that has Principal as the recordkeeper for their retirement account and have reached the IRA max for retirement contributions or who have saved 90% of the IRS max allowed under a retirement plan. There were 1,498 responses to the survey. For this research study Millennials (Gen Y) are individuals born in 1978 – 1995. Gen X are individuals born in 1965 – 1977. This research has been updated for 2019. Details can be found here.

2 IRS annual 2019 401(k) and 403(b) employee contributions limited to 19,000; if age 50 or over, 25,000.

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

Insurance products and plan administrative services provided through Principal Life Insurance Co., a member of the Principal Financial Group®, Des Moines, IA 50392. 

Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.