Burlington, VT:
Saving 5% through a 403(b) and that’s it, I guess. Whatever money I don’t spend just builds up in my checking account.
I don’t have a savings account because I have a car loan I’m paying off…in theory, it makes more fiscal sense to just pay that off faster with the extra money I have than to “save” it at a much lower interest…right?
Oh, and I pay 20% of my income in rent+utilities.
They do. And not jus babies - but kids - are just EXPENSIVE. Quite a bit of our savings is towards kids college educations. Like Rand, we make a decent living right now (actually, two of them) and are fairly sure that the financial aid offices MAY wait until we leave the room before they laugh at us.
-Eastern U.S.
-I save about 20% of my net
-mortgage is about 23% of my net
I’d like to save more, but aside from the regular monthly savings we have a substantial amount accumulated in various investments, so that helps me sleep better at night.
UK
mortgage - 28%
pension - 6.5% (This is managed by salary sacrifice, so this is a rough estimate)
saving - 14.5%
Hi, neighbor!
My saving rate is pretty variable but based on January - November of this year, I’ve saved 13% of my post-tax income.
My rent is just over 33% of my post-tax income.
UK
Mortgage is paid off so 0% there.
10% pre-tax goes to a pension (similar to a 401k)
No car payment or long term debt so I’d have to guess I’m saving 70 - 80%.
New Jersey, US.
Just finished my calculations.
My wife and I pay exactly 13.62% of our combined after-tax salaries to our mortgage, which includes our property taxes and home owners insurance.
The amount we save varies from month to month, and significantly from year to year but, going by the last 6 months, we’re saving, on average, 26% of our net income each month.
How the heck are some of you saving 30%, or more, of your net incomes? I’m doing pretty well financially, and I can’t get to 30%.
I’m wondering the same thing- maybe it’s that we’re both in NJ or something, but we’re rather parsimonious with our disposable income and I can’t seem to squeeze any more nickels out of the bi-weekly paystubs.
I’m in California, and I own a home which I have paid off completely because of some stock options which I cashed out some years ago.
I used to be able to save easily 40% of our pay.
But now I have a baby son and my wife is a stay-at-home-mom. So we have one less salary and one more mouth to feed. So that cuts down on our savings a lot. So it’s down to about 15% of my pay, I think.
I’m a lawyer, so my after-tax income is reasonably high.
I’m guessing that most who save 1/3 or more after-tax is comfortably in the upper-middle-class professional-salary range. Otherwise, it is very difficult to save in this range, as necessities and (reasonable little luxuries) eat up too great a percentage.
Well, we’re not divulging real numbers here, and I wouldn’t feel comfortable doing so, but I’d comfortably place myself in your “upper-middle-class professional-salary range” and the 26%, again on average, that I save every month, is quite a significant amount in actual dollars. In fact, until this thread, I thought I was doing amazingly well.
That said, if I wanted to save more, I could cut back on many expenses, or cut some out altogether, my cleaning lady, for example. I’d pick up $400 per month on the elimination of that expense alone…I won’t, but I could.
As one’s salary increases, there are thresholds beyond which one’s expenditures increase, sometimes precipitously, so, in my opinion, just because someone makes more money, doesn’t ‘necessarily’ mean they have a larger percentage of it to save…
Try this, every time you get a pay raise, up your savings by ½ to 1%. Better yet if you can do it to some kind of automated system, like a 401k or an automatic deposit to a seperate savings account. You never see a decrease in your pay check, you just get slightly less of an increase.
I have a pension, which is 5% pre-tax. (And I don’t know how much my employer contributes, if any…I need to do some research.)
From my post-tax salary, I save about 23%.
I have no mortage, as I’m a renter, but I hope to get into some investments in the next calendar year.
I don’t understand this. Just because you make more money does not mean your expenditures necessarily increase. It often happens, but one does not naturally follow from the other. But I’m probably just misunderstanding you.
I don’t see why a person making, say $400,000, must save the same percentage that a person making an order of magnitude less should. Just like I don’t think a person making $40,000 should pay the same percentage in taxes as someone making $400,000. Eventually, in both cases, you get to a point where simple percentages aren’t comparable.
Two professional incomes, two children, but past daycare, middle class lifestyle in the relatively low cost of living Midwest. I used to be able to say no mortgage, but we now have cash flow leaving for a mortgage again, but as that itself is “investment property” its saving, just not into a stock portfolio or 401k. Our tastes don’t tend to be terribly expensive - I’m not wearing expensive jewelry or carrying a $300 purse. I let my cleaning lady go when my kids were old enough to do “chores” well enough that I didn’t need to reclean.
I live in the SF Bay Area.
Max out my 401k so that’s 15% pretax (and my employer matches the first 6%).
Another 7.4% (calculated pretax although it’s post-tax dollars) goes into a Roth IRA and some other investments.
Mortgage is just under 25% of my pretax income however I pay a little extra on the principal each month so closer to 26.5%.
It is very well. Dopers posting in this thread are not typical.
Most of my collegues spend a lot more than me. An example: my friend, in the same business as me, has a considerably larger house, two luxury cars, and all-new expensive furniture. He just finished renovating his kitchen.
What he also has, is a lot of debt. He’s got a 30 year mortgage. He’s got two sets of lease payments to make. He hasn’t got any savings, nothing in his RRSP.
My big luxury expense is gym membership, with a personal trainer. Everyone ought to have at least one luxury expense …
I dunno about that. Certainly, if you let it, your expenses can take up all your money. Multiple vehicles, home improvements, vacation property …
My own plan, if once can call it that, is as follows:
I spent a good deal up front to live in a nice neighbourhood near shopping and a subway entrance. That way, I can get away with having only the single car.
I set up an automatic withdrawal system - it automatically subtracts one-third of my salary from my account, and deposits it in my savings account.
I then put some of that into a tax-free savings account mutual fund (this will only make sense for Canadians) - this, to be a sort of “sinking fund” for major expenses, like the next car.
The rest I split - some into an educational savings account (again, Canadian: RESP), and the bulk split between mortgage extra-payments and maxing out my RRSP (tax deferral plan for retirement).
To my mind, the secret is in the automatic withdrawal. I treat the savings as a given and so am psychologically at least “forced” to live on the 2/3 that remains.
Once we decided to have a baby, we just starting living poor. We’re pretty middle-middle class, I think. We basically just started saving my husband’s salary to see if we could live on one income. Once we did that, it was amazing how fast it piled up. For us, I think the big factors are
[ul]
[li]One car. It means a lot of cooling our heels waiting on each other, but we are talking thousands of dollars a year saved.[/li]
[li]Few family obligations. Our families don’t do Christmas presents, or any of that kind of thing. I really think this is a hidden expense people aren’t aware of.[/li]
[li]No vacations. [/li]
[li]No debt (outside our mortgage) This is huge. Three years ago, our debt payments were ridiculous.[/li]
[li]Careful tracking. We each have $500/month total for discretionary spending: we pay for our own groceries, eating out, hobbies, clothes, everything that isn’t a bill. We track every item in a spreadsheet so that we know where it goes. It’s amazing how much less money you spend when you are hyper-aware of it.[/li][/ul]
I should have been clearer. No, a higher income doesn’t ‘have to’ automatically equate to larger and more expenses but, trust me, it just works out that way.
As a pretty indicative example of how the number of my expenses have increased, when I was young (and an Adonis, but that’s another story :)), and lived in an apartment, I did everything myself, and had relatively few expenses besides rent, food, transportation, and student loans. Now, I own a good-sized home with a large lot with a lot of custom landscaping, that I’ve contracted with a landscaping company to maintain.
Could I maintain my lawn and landscaping myself? Yeah, I guess, if that were the only extra thing I had to take care of. However, with everything I’m responsible for, there are not enough hours in a day for me, or me and my wife, to do it all, and it is simply easier to pay someone else to do it.
I guess that’s what Biggie meant by “more money, more problems.”
I’m a weirdo, so take what I say with a big grain of salt, but I’d rather have an apartment, a lot of money, and a little stress, than a big house with a big lot, not as much money, and more stress.
I guess there’s something to be said for not making a lot of money. 