Meet the extreme budgeters who save nearly everything they earn

Consumerism is the norm for many Australians, but not Jasmine and Aaron Boothey and their two kids. The family earns a healthy income and does not struggle to pay the bills, yet stashes away as much as possible.

Living below their means sees them save an impressive $60,000 a year, nearly two thirds of their after-tax income.

"Our spending hasn't increased significantly over the past 10 years, while our income has," Jasmine says.

Jasmine and Aaron Boothey of Adelaide and their children, daughter Blair (5) and son Hamish (2).

"We have always been mindful not to spend pay raises and cash windfalls, which is a trap we see so many others fall into. We got into the habit of being savers from the beginning, and now it's just habit."

The Bootheys are part of a growing tribe of extreme budgeters who save as much money as possible and avidly exchange budget tips online. Usually the goal is financial independence and early retirement though there are variations on the theme, such as those who eschew consumption in favour of donating to charity.

The Boothey household income is $125,000 and each year they are hitting increased savings targets. Thanks to their strict budgeting, the Adelaide couple now owns two properties and is planning to build a new family home next year.

Life under a frugal star: a broken cup, clothes from an op shop, a bowl of brown rice and lentils, and vegies growing in the ground.

"Each year we set ourselves financial goals, usually a little higher than we could have achieved the year before, and make a game out of trying to hit those goals," Jasmine says. "We break our yearly goal into smaller monthly goals, which makes it easier to see our progress."

Jasmine, author of Bargain Mums blog, says she lives by the golden rules of waiting for sales to buy new items and never upgrading just because.

"We wait until items actually break before replacing something," she says.

Cairns junior doctor Brenton Mayer donates 10 per cent of his income to charity.

"If something still works fine, I see no point in replacing it. We have also never gone into debt for anything other than a mortgage, if we want something, we save up for it. I have always thought that if you need a loan for something, you can't really afford it.

"It's all about balance, spending a little to enjoy now while saving to also enjoy the future."

Super-savers like the Bootheys live on lean budgets guided by their resourceful attitudes. They may be mocked as "tightarses", but they have the last laugh when it comes to savings. They rarely splash out on luxuries, preferring instead to spend on basic needs and bank any spare change.

Illustration: Simon Letch

Some have even managed to save their way to an early retirement, such as Canadian blogger Mr Money Mustache who retired in his 30s by spending a small portion of his income and saving the rest.

Bucking social pressure

Extreme saving flies in the face of the world's increasing appetite for consumerism. High-end goods are in high demand across the globe and though Australia's luxury sector is in its infancy, it is most certainly growing. Research by Deloitte shows luxury goods sales have been driven by wealthier Australians and Asian tourists. And CommSec's luxury vehicle index – a yardstick on consumer spending – found more Australians are purchasing luxury cars thanks to low interest rates.

But even high-income earners need to practise the art of living prudently, says Melissa Goodwin, author of Frugal and Thriving blog.

"It doesn't matter how much you earn, you still have to manage your money wisely," she says.

"Fundamental principles like 'spend less than you earn' apply no matter what your household income.

"Frugality isn't just about saving money. The true definition of frugality is the wise management of resources. Those resources include money, but they also include other physical resources as well as personal resources like time."

The term self-sufficient is often bandied about by people with backyard vegie patches and water tanks. But in Michael French's case, he's the real deal.

French, 48, knows how to get the most out of every dollar. He lives off the grid in his caravan thanks to solar and wind power, even cooking his food with a solar oven.

"I've only had to hook up to the mains power three times in the past two and a half years at times when we've had a long run of cloudy weather," French says.

To save on rental costs the Queenslander house-sits - usually parking his caravan on someone's land in exchange for caretaking duties - almost all year round.

Like many low-income Australians, French has to stretch every dollar as far as he can.

"I always was good at saving if I wanted to buy something, but now I've just got to be where, yeah, I only spend the money if I need to," he says.

"It's working out OK. I'm able to save quite a bit up over the year. I just bank it."

French scours local recycle shops and refuse tips for goods he can repair, recycle or resell. He estimates his living costs are $30 per day.

Growing inequality

For those living on low incomes or with high debt, intense saving is less of a lifestyle choice and more of a necessity.

Disposable income data from the Australian Bureau of Statistics paints an alarmingly unequal spread of wealth across Australia. The average Australian household has a disposable income of $998 per week, but the average low-income household has less than half that amount at $407. High-income earners have five times that at $2037.

A worrying 26 per cent of Australian households have a total debt three times or more than their income.

Richard Denniss, chief economist at think-tank The Australia Institute, says there's a growing divide between the haves and the have-nots.

"I think as Australia becomes a less equal society with cities dividing into multi-million dollar houses near the centre and low income earners commuting for hours, that Australians spend far less time mixing socially with people on significantly different incomes than their own," he says.

"Once upon a time, team sport on the weekend, weekend barbecues and maybe even your workplace were melting pots where Australians mixed with other people.

"I think as Australia becomes a less equal place people spend far less time mixing with a broad cross section of the community and in turn have far less idea of how lucky they are."

In 2005 Denniss co-authored Affluenza: When Too Much is Never Enough – a critique on Australia's love affair with overconsumption and spending for spending's sake. Today, he says, things have changed.

"Affluenza was written at the beginning of the mining boom and at that time Australia was becoming prosperous at an incredibly fast rate, yet credit card debt was growing and people's perception was one of what they were missing out on, not what they had," he says.

"Eleven years on I think people are a bit more cautious now about credit card debt, but I still think a very large number of Australians spend more time worrying about what they don't have than they do enjoying what they do have."

A growing movement against wasteful consumption is challenging the way we spend. Collaborative consumption came to life in large part to Rachel Botsman, who co-authored What's Mine is Yours: How Collaborative Consumption is Changing the Way We Live.

Also known as the sharing economy, collaborative consumption is the shift in consumer values from ownership to shared access. Technology has enabled this trend to gather momentum, inspiring social networks to swap, trade, rent and barter for goods through platforms such as Airbnb and Airtasker.

Every October, Australians are urged to take part in Buy Nothing New Month. Promoted as a "one month detox on wasteful or unnecessary consumption", the campaign encourages participants to buy secondhand, swap, rent, share, borrow, recycle or upcycle.

Just as the wealth of high-income earners juxtaposes the limited means of those on low-incomes, the principles of frugal living contrast the excesses of luxury buying.

Fortunately there are simple luxuries that come from living life lean.

The effective altruist

Spending is overrated and giving is where it's at for Brenton Mayer.

The 24-year-old junior doctor is an effective altruist or in layman's terms, a dedicated donor to charities. Dr Mayer donates 10 per cent of his income to charities he believes are most effectively saving lives.

The Cairns doctor may have just entered the workforce and facing an almost impenetrable first homebuyers market, but he says donating is more important than personal savings.

"I could save for a house or buy a new car, but I'm fairly sceptical that they would make me a great deal happier," Dr Mayer says.

"I think people get a great deal of happiness out of giving and I think there are things that we have moral duties to do."

Effective altruism is a social movement based on the philosophy of using evidence to make the greatest difference. Followers donate to independently evaluated charities they believe will save the most lives.

This extends from simple measures such as funding distribution of anti-malaria bed nets in African nations to the more complex problem of reducing carbon emissions to lower the risk of climate change.

Some effective altruists commit to donating a high proportion of their income to causes they deem to have the greatest impact per dollar. Some take it a step further by pursuing careers in highly paid professions so they can maximise their contributions to these charities.

Dr Mayer first heard about effective altruism when a housemate lent him a copy of The Life You Can Save by ethicist Peter Singer. In the past five years while studying for his medical degree and earning very little, he has donated $15,000.

Dr Mayer says he doesn't consider himself more generous than the average person.

"I've just gradually come to terms with the idea that $100 will improve a life and $3000 will buy a life," he says.

"If you value life and you accept that people overseas have lives as valuable as us, the only logical thing to do is be generous."

Blogs and other resources for super savers

And Then We Saved - recipes for spending diets to break away from debt.

Becoming Minimalist - advice on how to live an uncluttered life.

Buy Nothing New Month – try something new and don't buy anything new.

Frugal and Thriving– how to live the good life on a low budget.

Bargain Mums - budget recipes, travel and saving ideas.

Mr Money Mustache - hardcore savings tips from a Canadian 30-something retiree.

Rachel Botsman's TED talk - the theories behind collaborative consumption.