Meet the wealthy families who are putting 90% of their earnings into savings — and living off Groupons and discount stores.

Source: Why You Should Live Paycheck To Paycheck – Business Insider

David Sapper, a car salesman, and his wife, Tina, a real estate broker, live on a set budget of $2,500 from their two paychecks that must cover all groceries, health care bills and extracurricular expenses.

Even in their home in greater Las Vegas, where the cost of living is far lower than it is in other parts of the country, the Sappers have to budget carefully to make it work.

They rarely go out to dinner, they shop at discount chain stores and many of their recreational decisions are dictated by Groupon.

Such a way of living gives one the illusion that the Sappers are poorer than they actually are — yet in reality, they make an annual combined income of about $500,000.

“We put over 90 percent of our income into savings or investments,” says Sapper.

He and his wife decided to make the transition to a more frugal, savings-oriented lifestyle when they wanted to save up enough money to go into business for themselves. Today he runs his own car dealership in a niche market, for people with poor credit who want to buy cars.

After nearly seven years of living strictly within this budget, the Sappers have accumulated $50,000 in emergency savings, maxed out their IRAs each year, paid off their house and hit other key financial milestones.

According to a 2013 Bankrate study, about three-quarters of Americans are living paycheck to paycheck.

But while that term traditionally means living off exactly what you earn with little or no savings to cushion a financial blow, a new breed of workers like Sapper are redefining the term to mean something different: the act of reallocating your actual paycheck so at least 20 percent, if not more, of your earnings is set aside for long-term financial goals.

The catch? It takes discipline to prioritize, say, saving for retirement over the instant gratification of buying whatever catches your eye.

RELATED: The 20% Question: How Much of My Pay Should I Save?

“We cook at home almost every day,” says David Sapper. “We are huge on using coupons or Groupons when we do eat out. We shop mainly at stores like Ross or Nordstrom Rack to save money on clothing.”

But while the Sappers aren’t driving Lamborghinis or rolling in Prada, there’s something to be said of their lack of stress from living on less.

“If you’re living paycheck to paycheck because you know a lot of those dollars are going toward long-term financial goals, I think that’s really a good thing,” says Katie Brewer, a Certified Financial Planner for LearnVest Planning Services.

Here’s a peek inside the new paycheck-to-paycheckers’ lifestyles, and how to make the shift whether you’re making $45,000 or half a million.

The Saving Habits of the New Rich

Many people embracing the new paycheck-to-paycheck movement fall in higher income brackets like the Sappers. In fact, a recent analysis of data from the Associated Press reveals a full one in five Americans, at some point in their lives, will make a combined household income of at least $250,000.

What’s more, these top 2% of earners are more fiscally conservative than their wealthy predecessors, research suggests, since they’ve reached one of the top earning brackets, only to fall below it again.

The good news is, even if you’re not earning six figures yet, you can work on living like the rich in the sense that you’re spending and saving what you earn wisely.

Take Susan Hinds. The public relations worker, 29, and her husband, 31, who was in the military and is currently studying construction management on the GI Bill, bring in a combined income of about $80,000, which puts them squarely in the middle class where they live, in Kansas City, Mo.

But while the couple enjoyed little splurges during their dating years, and through their first year of marriage in 2012, last year they decided to get serious about saving money.

RELATED: 7 Reasons You Need an Emergency Fund

“Sometimes money comes in on time, sometimes it doesn’t. When the government shutdown happened, everything slowed down,” says Susan of why the couple decided to tighten their belts.

About 40 percent of what the Hindses bring in goes straight to bills, including rent, groceries, and vet bills for their three dogs; 30 to 35 percent of their take-home pay goes directly to savings. After one year they’ve saved one-quarter of their emergency fund goal, and have a greater sense of security. But these decisions do come at a cost.

“One thing I really miss is being able to go shopping as frequently as I would like,” says Hinds. “It’s very, very hard for me to look at what’s actually in my bank account and what I need and to be intelligent with the way I spend my money. It’s been quite a long time since I’ve purchased clothing for myself.”

The Hinds also don’t eat out very often, a certainly frugal — yet sometimes painful — new habit.

“We certainly have had to say no to dinner invitations, which means you’re not only not getting something great for dinner, but you’re missing out on time with friends as well,” says Hinds. “We try to come up with more creative solutions, where we can have people over or go out for something cheaper.”

RELATED: 8 Ideas for a Big Night Out—All Under $100

The Sappers, too, have just said no to restaurants, for the most part, since they began focusing on growing their net worth — and they used to spend upward of $3,000 a month on eating out.

Their relatively modest, 1,600-square-foot home, which they purchased for $126,000, pales in comparison to the sprawling, million-dollar homes some of their friends dwell in. But while they were the odd couple when they decided to stop keeping up with the Joneses, today many of their friends are now starting to want to jump on the paycheck-to-paycheck bandwagon.

“It went from our friends busting our chops about it to … our friends’ lives are changing to mimic ours,” says Sapper.

Making the Lifestyle Switch

“Opting to live on what’s left over after your savings is allocated won’t happen overnight,” says Brewer. ”Usually when somebody has something in their checking account they tend to spend until it’s gone.”

But dumping what you earn into your checking is the opposite of what she counsels clients to do. Instead, Brewer helps them set realistic budgets that allow them to put at least 20% toward their long-term goals. She also suggests individuals and couples start by setting a specific percentage of their income aside — preferably through automatic deposits to a savings account — as a rule. And it’s important to be open to a new way of living.

“As long as you are open to making adjustments where you might not have been adjusting before, and as long as you’re willing to see where everything is going, you’ll address two the biggest hurdles to allocating your paycheck,” she says. “I have a lot of clients who say they don’t know where their paycheck goes, they just know it disappears.”

Sapper suggests making cuts in baby steps. When he and Tina first made a lifestyle change, they cut back to spending $500 a month on eating out. These days it’s less than $200 a month.

“You can’t go cold turkey overnight,” he says.

Read the original article on LearnVest. Copyright 2014. Follow LearnVest on Twitter.