year, depending on commissions.
Then, after a trip to London and Paris
in 2014, they promised themselves
they would take their savings to a
whole new level. The vacation was
rushed and interrupted by work e-
mails and worries about sales quotas.
“We had to hustle back to work with
jet lag,” says Amy. After that, their
goal was to achieve financial freedom
so they could retire in their mid fifties.
Based on their spending at the time,
the Rutherfords estimated they would
need $120,000 a year to live on in re-
tirement. That would require them
to amass a $3 million nest egg. “Hav-
ing this end goal really changed our
spending,” says Amy. In 2015, they
got rid of their biggest expense: a
6,000-square-foot house. They moved
into an 1,800-square-foot townhouse
they had been renting out. “We fell
prey to lifestyle inf lation,” says Tim.
“We bought nicer cars. We bought a
bigger house.”
They also began to question eachSome of us are naturally big savers; others need to work at saving until it becomes a
habit. If you’re in the latter category, here are some tips to help you sock away more
money.Set a goal—or two. Having something to aim for will keep you motivated to save. But
the goal shouldn’t be some arbitrary number. Rather, envision your goal—say, retiring
early to the Caribbean—and then calculate the numbers you need to make it happen.
Be realistic. Just like with a diet, if your savings target is too ambitious and requires too
much sacrifice, you likely won’t stick with it.Know where your money goes. Tracking where your paycheck goes will make it easier
to find ways to cut expenses. Consider using a free budgeting tool, such as Mint.com or
PersonalCapital.com.Pay off high-cost debt. It’s tough to build up savings if you’re being dragged down by
high-interest-rate debt, such as credit cards at 18% annual interest. In fact, paying off
this financial albatross should be one of your goals.Automate your savings. In addition to having 401(k) contributions deducted automati-
cally from your paychecks, arrange to have money transferred regularly from your bank
account into a Roth IRA or
investment account with
low-cost mutual funds or
exchange-traded funds. Most
employers with a 401(k) will
match workers’ contribu-
tions, usually up to 3% of
pay. Make sure you contrib-
ute enough to get this free
money, although your goal
is to max out annual contri-
butions. The contribution
limits are $19,000 in 2019, or
$25,000 if you’re 50 or older.Seek support. Reformed
spenders may find them-
selves out of sync with old
friends. But thanks to social
media, supersavers have
many avenues to connect
with each other. A good place
to find like-minded savers is
the r/financial independence
online community on Reddit,
which has close to 530,000
subscribers.How to Save a Million
DO IT YOURSELF■ TIM AND AMY
RUTHERFORD PUT
THEIR SAVINGS IN
OVERDRIVE AND
MANAGED TO RETIRE
WELL AHEAD OF
THEIR GOAL.
PH
OT
OG
RA
PH
BY
BE
NJ
AM
IN^
RA
SM
US
SE
N
30 KIPLINGER’S PERSONAL FINANCEMONEY COVER STORY