What Is the Starve and Stack Saving Method? 5 Ways That This Money-Saving Strategy Can Help You Achieve Your Financial Goals

Do you want to save a nest egg? Buy a house? Pay off debt? Maybe you’re living paycheck to paycheck or can’t seem to save enough even with a double income. If you’re serious about doing what it takes to meet your financial goals, consider trying the starve and stack method

The starve and stack saving method is a radical way for couples to save money. Instead of following a budget or trying to save when you can, the starve and stack method requires a couple to commit to an extreme budget that enables them to live 100% on one spouse’s income and use the other spouse’s paycheck to save, invest, and pay off debt.  

In short, one spouse or partner is stacking money and the other spouse pays all the bills.

While it will require tightening your belt and getting creative with ways to live on one income, here are 5 ways that this great money-saving strategy can help you hit your financial goals.

How the Starve and Stack Savings Method Works

The phrase “Starve and Stack” comes from Nick Vail, author of Remove the Guesswork. Promoted by popular personal finance blogs and experts, the “starve and stack” concept encourages new couples to focus on living off one income for 18-24 months.  

The good news is that you don’t literally need to starve to use this method. 

There’s a reason why this extreme budgeting and saving method can help you pay off debt fast. Using this strategy means that you’ll cut the fat, impulse spending, and lifestyle inflation and throw all the money that you save from one spouse’s income towards a nest egg, getting out of debt, or both. 

Depending on your money goals and income level, you could pay off $13,000 in debt like one couple who lived on $28,000 for two years. You could also save for a down payment on a house or work towards investing $50,000 in a index fund at a 6% return. 

For example, if you choose to let it grow without adding extra money to the fund, you would have more than $287,000 in 30 years. If you could contribute $25,000 to a diversified index fund each year, you would become a millionaire in around 19 years. 

Don’t have a partner? Not to worry. You can also use the starve and stack method if you’re single by building a side hustle. Live off your main income and use your side hustle funds to save and get out of debt.

1. Plan Your Budget 

Before you get started, sit down with your spouse to figure out your monthly expenses. 

    • A good way to do this is to gather physical receipts or gather records of online purchases. 
    • Sort these into categories such as utilities, car payments and gas, rent or mortgage, student loans or credit card debt, groceries, and discretional spending. 
    • Identify your expenses. Compare them to each partner’s income. 
    • Then, decide which income stream to use to primarily pay your bills. With a little work, you can tell the difference between necessities like food and housing payments compared to dining out and music or subscription services. 

If you want to use the starve and stack method, but simply can’t afford to do it due to the cost of living in your area, consider moving to a location where your cost of living can better match your income level. For instance, if you live in New York City, consider moving to a place where you can easily save more money. 

Worst case scenario, if you find that you’ve pared your expenses to the bone and still can’t survive on one income, consider picking up a side hustle to add some extra cash flow and savings.

2. Avoid Lifestyle Inflation

When you have two incomes, it’s a temptation to feel more secure (even if that’s not a reality) and start spending more. 

The starve and stack method is designed to protect against lifestyle inflation that’s easy to fall into with a double income. 

For instance, you might suddenly want to upgrade your car or jump into buying a big house without building substantial financial foundations first. 

A few good ways to still have fun while working towards your money goals is to plan free date nights, cook together at home, or enjoy free or budget trips to the park or museum. 

While it’s hard to skip the short-term luxuries, this method has long-term benefits. 

3. Curb Impulse Buys

Saving early and utilizing smart spending habits can help you avoid impulse buys. Whether you’re prone to expensive purchases or fritter money away on non-essentials, this method helps build better impulse control. In the end, controlling impulse spending will free up extra cash. 

4. Get Your Savings on Track 

Savings accounts aren’t like they used to be back in your grandfather’s day. Federal policies and low interest rates from many local banks can discourage people from putting money in a savings account. 

Despite the trend in low savings interest rates, it’s worth it to have a healthy emergency fund. Some experts argue that unless you’re planning to buy a home soon, there’s no need to keep any liquid savings. 

Stacking money after starving it from your income doesn’t just refer to stashing cash under your bed or in a home safe. Financial institutions like Discover, Marcus by Goldman Sachs, and Synchrony offer 0.50-0.60% APY savings accounts with zero fees and no minimum balance (terms and conditions may apply). 

Although investment accounts are a good choice for money that you won’t need to use for decades, it’s important to stash enough in liquid savings to last you 3-6 months of living expenses. 

Based on your income, decide how aggressively you want to save and make adjustments as needed based on personal circumstances, debt repayment, and regular income. 

5. Max-Out Retirement Plans, IRAs, and Brokerage Accounts

One of the best ways to stack the money that you starve is to top up your retirement plans to the max.

If your employer offers a 401(k) or 403(b) with a contribution, take advantage of this benefit to double your retirement contributions.

For example, if you’re under 50 years old, you can invest up to $18,000 per year. Over 50, and you’re able to invest up to $24,000 per year.

Even better, while you’re living on one partner’s income, both spouses can continue to contribute to separate workplace plans. This means that as a couple you could invest up to $36,000 per year if you’re under 50 years old. This doesn’t include your employer’s matching contributions.

You aren’t limited to employer or IRA plans. Consider investing in a brokerage account. While you won’t get any pre-tax benefits or tax-deferrals, brokerage accounts give you more flexibility by allowing you to use these funds prior to retirement age without the hefty 10% penalty enforced by other types of retirement plans. Since these are taxable accounts, check out any tax implications for using them.

The good news is that you can contribute as much as you want to a brokerage account without hitting yearly investment limits.

Whether you choose the starve and stack method for the long haul, or just until you get out of debt and build substantial savings, this extreme saving method can give you retirement-age security and help you build a better financial future.

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