Limited income, big family, major savings: Meet the Economides clan

When Steve and Annette Economides got married in 1982, they made a conscious decision to always live below their means. The couple from Scottsdale, Arizona, even made the pact a part of their wedding vows.

Then the car broke down.

This is usually the part in the story where taking on a little bit of debt seems perfectly OK to do. After all, Americans collectively owe nearly $12 trillion in outstanding household debt. Sometimes other alternatives are simply out of reach.

In this case, though, Steve was able to ride a bike to work, so he did — for a solid month. And they saved even harder.

“Friends lent us an occasional vehicle over weekends,” Annette Economides said. “They're still good friends of ours.”

Their resolve would be tested many times over the years, given that they've raised five children on an income that rarely exceeded $40,000 a year, not far above the federal poverty line for a family of their size.

But by staying the course, the couple has amassed almost a million dollars in assets.

Here's How They Did It

First, they defined “living below their means” as paying for all their expenses, including adding a defined amount to savings each month and regular charitable giving, with 90 percent of their take-home pay.

At the time, that was about $800 a month, or about $2,000 in 2015 dollars. Every month, three accounts were prioritized: rent (later a mortgage that they would paid off in less than a decade), charitable giving, and their emergency fund.

Tools: A single savings account and a simple spreadsheet to keep track of all the items for which they were saving each month:

  • Car repair
  • Car replacement (in lieu of car payment)
  • Home repair
  • Medical emergencies
  • Emergency travel

When one of their parents in Chicago became seriously ill, there was enough money in the emergency travel category so that everyone could visit.

“It's amazing how emergencies become smaller, or even stop being emergencies at all, if you have your emergency fund properly funded,” Annette said.

Then they tracked their spending and cultivated a serious lifestyle of frugality. A dining room set was found for $50 at a garage sale. They still have it 30 years later.

Steve worked as an advertising account executive and graphic designer and Annette worked as a stay-at-home mom. After three years, they had saved $7,500, which they used for a down payment on a bank-owned house. Mortgage interest rates at the time were about 13 percent — a huge difference from today, where they average about 4 percent — but they still managed to pay off the house in nine years.

Cars were bought used, for cash. Regular payments were made into savings so they would have enough money to purchase a another car outright by replacement time.


This is the first in a series of articles looking at American families who are saving major dollars on real-world incomes. Next week: the Argues of Orlando.


Saving Tips

So savvy did the Economides family get about saving money, they eventually had more than enough tips and hacks for both a website, Money Smart Family, and several books. They recently shared some of their best advice with Get Rich Slowly:

Beware of coupons. Annette is not a huge fan of coupons. Most of the food they buy is fresh and coupons tend to be for higher-priced, branded items and processed foods. What they do use quite aggressively is Walmart's Ad Match system, which allows them to purchase anything Walmart sells for the same lowest advertised prices of any other stores in their local area. They have never spent more than $100 per month per person in their household, including paper goods and toiletries.

Never buy a work lunch. Steve tells how he used to feel like the church mouse at work when everyone would invite each other out for lunch and he just sat there with his packed lunch, which saved them $1,500 per year and ended up in their savings account. When the company moved into a place with a lunch room, that's where he sat and ate his lunch. Others began to figure out they can sit and talk to each other for less in the company lunch room. Soon enough, the company's culture changed from, “Where will we go for lunch today?” to packing salads and other healthy food, and visiting around the company lunch room table.

Patience is a must. In their view, there is a direct correlation between being impatient and wasting money. If you need or want anything, chances are you can get it cheaper if you wait. Or, at the very least, you won't have to compromise your savings account or emergency fund because you'll give yourself time to save for it.

Knowledge is power. The best deals are rarely obvious at first glance. And the purchase price is rarely the total cost. When they buy a car, for instance, Steve researches the insurance and running costs using comparison resources.

Persistence pays off. When they know something is available at a certain price, they keep looking until they find it. Then, when the sales associate says that a good deal is not available, they (politely) keep going up the chain of command until they reach someone with the authority to strike a better deal.

Live within your means. No matter how much (or how little) you make, decide ahead of time never to spend more than, say, 90 percent of your take-home pay. Once you have set a limit for your spending, have the discipline to stick with it.

Keep your idealism. The idealism they had in their early years became a core value. There is always a way to save, always a way to build up that savings account, always a way to defuse emergencies with savings … and never an excuse to fall into debt.

Never buy anything new. One of their daughters tracked down a Toyota Tacoma pickup for just over $11,000. She bought it for cash from her own savings account and, three years later, sold it for $12,000.

Channel your creativity. It often takes creativity to find ways to live within the budget you set for yourself. Rather than view it as a drag or a shackle, view it as an opportunity to let your creativity flourish. See what unique solutions other people came up with, and see if you can improve on that.

Work to become part of a community. When you are part of a community — whether it's the neighborhood, your apartment complex, social clubs, church or other — you become involved in other people's lives and you help each other. Steve and Annette view this as building up an emergency fund of goodwill: When you need help, those you've helped in the past will think nothing of pitching in.

Tell us: What's your savings strategy?

Does where you live determine how easily you can save money? Explore using our new data-driven analysis of savings rates, debt, taxes and more across the U.S. How did your state rank?

More about...Frugality, Budgeting

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Sue
Sue
5 years ago

This family is inspirational in its focus and determination. In looking at their books, it becomes clear that they look at economizing as a challenge. They own a home and take vacations. The American dream is possible with adjustment of expectations and discipline.

Levi Henrikson
Levi Henrikson
5 years ago

That’s quite remarkable that the Economide family had the discipline to live like that. Personally, I don’t think I would want to live that frugally. I find it easier (and more fun) to figure out how to get a little extra money than it is to cut living expenses to the bone. I mean, we like to eat out once in a while and it’s always a nice time. That said, I have been learning the value of saving. I found it’s easiest for me to save when I have it automatically taken out of my savings account–as if it… Read more »

Rebecca@TheFamilyFinder.Net
5 years ago

I listened to some podcasts that interviewed this family. They have a lot of great advise. My biggest lesson from them is that it takes everyone to make it work. They are clearly a team.

freebird
freebird
5 years ago

I rarely use coupons for the same reason, most food I buy is raw and I prefer to cook myself in order to have control over ingredients. And nothing wrong with a microwaved potato for lunch. Patience (aka procrastination) may be a virtue in spending but not when it comes to putting your money to work. Don’t wait for the “right time” to invest, especially in your tax deferred retirement plans. Deferring maintenance often increases costs in my experience. Living within your means is just the start, raising the fraction you consistently sock away gives you the double whammy of… Read more »

LOLO
LOLO
5 years ago
Reply to  freebird

I totally can relate to your comment on the psychological factor. Dealing with the pressures of the “Jones'” has been the most difficult, especially when it comes to my children. The Jones’ make you feel like you’re a bad parent. I have felt isolated in my thinking about financial independence and wealth, but recently discovered this blog and others that have made me finally feel like I’m not alone!!!

zoranian
zoranian
5 years ago

Self-control is an under-utilized and under valued character trait in our country today. Slow and steady wins the race.

Bryan@ Just One More Year
[email protected] Just One More Year
5 years ago

I have heard their story before and it is very inspiring. It just goes to show that with some discipline, hard work, some sound strategies, and tenacity, great things can happen financially.

The Economide family is the example that should be pointed out to the naysayers when they start the argument that they do not make enough money, they have kids, and their situation is different.

Ben DeBoer
Ben DeBoer
5 years ago

This family is very inspiring. Reading some of their story has challenged me to think of ways to make my take home pay go A LOT farther. I spend most of my efforts trying to make more money with side hustle work, not keeping in mind that there is some untapped wealth sitting in my paycheck – “A dollar saved is a dollar earned.” There are definitely a few things from this family that I can implement into my own finances today

Vanessa
Vanessa
5 years ago

What does a budget for a family of 7 bringing in $2000/mo. actually look like? I’m not disagreeing with the principles, but it’s all very abstract.

Melissa
Melissa
5 years ago

I love the Economides family! I only discovered them recently, but they’re so inspirational, and I don’t even have a family yet! I also live in AZ, too, so their lifestyle and ability to save really resonates with me. Scottsdale is not a cheap area to live in! 🙂

Karen
Karen
4 years ago

Great inspiration, and I am struck by how appalling the chart is of the top savings rates! 1 percent. I pity all the retired people who believed they had enough savings because they planned for a percentage point several points higher than that for the duration of their retirement. And I am appalled at the greed of banks who offer 1 percent or less to people who are willing to keep their money at that bank, effectively loaning it to them for nearly no return, while the banks charge substantially more interest for even their least expensive loans and credit… Read more »

Ben Martin
Ben Martin
4 years ago

Dear GRS;
Great article- I’ve heard of this family before and they are very inspirational.
FYI- you have links at the end of the article for GE Capital Bank and Synchrony Bank, but they are one and the same company. GE Capital changed its name to become Synchrony Bank.
–Keep up the good work !!
Ben

Erman
Erman
4 years ago

One thing I don’t get, instead of having 5 kids, couldn’t they just stop at 2 or 3 and live a bit of a better life at least?

I am all for frugality, saving, living within your means etc. but I do not understand people who constantly multiply when they don’t have the income for it. After all, we only live once and there is no point to living if you will not have the luxury to splurge on something every once in a while.

Steve Economides
Steve Economides
4 years ago
Reply to  Erman

Erman,
This question about family size comes up all of the time, and it is a good one. Should people on smaller incomes have large families? Aren’t they costing society money – welfare, subsidies, etc? We chose to have 5 kids (2 were adopted from of an abusive / malnourished home). All of them became voracious readers, athletes and great students. And they graduated from college without debt. Rather than working day and night to make more money, we chose to invest in our kids. We’re proud of them all.
Steve

Kate
Kate
4 years ago

Steve, First of all, I’d like to say that I really admire what you and your family have achieved, and for your decision to give your children (biological and adopted) better futures by investing in their bodies and minds. Having said that, I think you deliberately misconstrued what Erman was saying. Erman did not suggest that you should work day and night to make more money because you have 5 children. He/she also did not suggest that you should not invest in the children you have. I think what he/she was saying is that family planning is an important decision… Read more »

m. e. lapp
m. e. lapp
1 year ago

Does it seem right that the daughter sold her car at a price she herself would never have paid?

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