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Personal savings rate?

post #1 of 59
Thread Starter 
As a regular reader of both Styleforum and Bogleheads, I always feel a bit conflicted about my consumerist habits and saving appropriately. I always fear I'm not saving enough, though I probably live life too much on the cheap. So, aided by the anonymity of the internet, do you guys have a specific savings strategy?
Edited by norcaltransplant - 12/11/11 at 10:16am
post #2 of 59
I'm also a frequent Boglehead reader. Personally with my personal finances, I started off with ~3 months of emergency savings (aiming to ramp it up to 6 months) and have maxed out Roth IRA and contributed ~20% to 401k.

Other than that, I don't really think about my savings 'strategy' too much. Everything is automated.
post #3 of 59
My personal savings right now is around 35-40% of my net income but it will probably go down to 33% or so in the next year.
post #4 of 59
Have a monthly saving goal of saving 65%, and usually exceed it. Am just a year out of school so living drastically below my means doesn't impact my quality of life.

I figure savings will decline a fair amount in a couple years when I have established myself a little more.
post #5 of 59
Quote:
Originally Posted by RedScarf7 View Post

Have a monthly saving goal of saving 65%, and usually exceed it. Am just a year out of school so living drastically below my means doesn't impact my quality of life.
I figure savings will decline a fair amount in a couple years when I have established myself a little more.

Probably, but you're doing well to get into the habit as soon as possible. I think if you start out with a very high savings rate it becomes easy to keep saving at a good clip even when other expenses start adding up.

However, I think savings rates that are too high, meaning they prevent you from doing the things you like, are categorically negative. They not only prevent you from having your fair share of fun, they also put you a situation where you're more likely to snap and start making rash financial decisions. My theory on why so many doctors are terrible with their money is because they live for so long without any of it. Eventually when the green starts rolling in, they lose it.
post #6 of 59
There's a rule of third for everything and personal finance is no exception.

Generally, one-third of your paycheque goes to savings, one-third to rent, and one-third to spend.

Hot tip: do it in that order. Set aside your savings first, and then make sure you cover you rent. After that, it's all gravy.

Of course, if you want to save even more (as in you have some sort of target in mind, e.g. house, car). That's great. Save more. But don't be a total el cheapo. You only live life once.

And accumulating stuff (i.e. unnecessary crap) is vastly inferior to accumulating experiences, imho.
post #7 of 59
Quote:
Originally Posted by warmpi View Post

There's a rule of third for everything and personal finance is no exception.
Generally, one-third of your paycheque goes to savings, one-third to rent, and one-third to spend.
Hot tip: do it in that order. Set aside your savings first, and then make sure you cover you rent. After that, it's all gravy.
Of course, if you want to save even more (as in you have some sort of target in mind, e.g. house, car). That's great. Save more. But don't be a total el cheapo. You only live life once.
And accumulating stuff (i.e. unnecessary crap) is vastly inferior to accumulating experiences, imho.

+1

My travel and clothing budgets have inversed lately but i have a pretty great wardrobe so it's all good. ^_^

3 vacations this year. So awesome i feel like moving to France!
post #8 of 59
Quote:
Originally Posted by norcaltransplant View Post

As a regular reader of both Styleforum and Bogleheads, I always feel a bit conflicted about my consumerist habits and saving appropriately. I always fear I'm not saving enough, though I probably live life too much on the cheap. So, aided by the anonymity of the internet, do you guys have a specific savings strategy?

I'd like to save 10% of my take home. If I'm really good I can do that. However living in a one bedroom and my socializing habits make that a quite difficult here.
post #9 of 59
I have a mortgage (30-year fixed) and a HELOC. I have no other debt, and I pay my credit card bill in full every month. I contribute about $13,000/year to my 401K; I would like to max it out starting next year. Ideally, I will save 30% of take-home pay, with half of that going to pay off the HELOC. My interests in international travel and contemporary art are going to kill that plan, however.
post #10 of 59
I save about 50-70% of my take home. Bill wise; quite low. I live with gf and syblings. I'm thankful i'm close to my family and also age wise, one sister 1 year older, a brother 1 year younger, and also a slightly older sister. My rent+ utilities is about $370/month in San Diego, 237$ goes to car lease. Pay off balances each statement.

Gives me a lot of disposable income, which I spend almost all of it on clothing. The rest goes to going out. But this year considering I have a stock pile of suits shirts and shoes that haven't even been worn yet, I'm considering using that income to travel, or save up a travel fund for my parents when they retire in 4 years.
post #11 of 59
I am 22 and married with two very modest incomes. We try to live completely on my salary and save hers and we do pretty well for the most part. Her cc is still tied to her bank account but she rarely uses it so we don't really touch her income and I pay for everything out of mine. I would say we probably save around 40% of our total income. I always want to save a good chunk of our income for whatever the future holds, but I also want to be able to travel and enjoy life. We have already decided that the more money I make the more we will be able to spend, and we will always just keep her income in the bank or other investments.
post #12 of 59
I save $50 a week. bigstar[1].gif
post #13 of 59
Quote:
Originally Posted by norcaltransplant View Post

Warning: Spoiler! (Click to show)

As a regular reader of both Styleforum and Bogleheads, I always feel a bit conflicted about my consumerist habits and saving appropriately. I always fear I'm not saving enough, though I probably live life too much on the cheap. So, aided by the anonymity of the internet,

 

do you guys have a specific savings strategy?


spend less by shop smarter on discretionary items and taming monthly bills.

post #14 of 59
~28%.

i save 50% of my bonus also
post #15 of 59
The best savings strategy is to do it automatically.

if you know when your paychecks hit your bank account and about how much they are, set up automatic transfers to pull money into something like an ING direct account immediately after the check clears. From this account, have automatic transfers into an IRA. Have your bills set up to auto-pay from your credit card (and things that can't be put on the CC like rent/mortgage, have your bank write and mail the check for you).

Also set up automatic deductions for things like a 401k....

Once you are set up like this, everything left in your checking account is guilt free (although if you are ending up with a ton...maybe the transfer to the ING direct account needs to be bigger).
By taking the money first, you don't really miss it and can't accidentally spend it. You can still initiate a transfer back into savings if you need it (or when you travel or make a big purchase you have been saving for) but it requres extra thought which is enough to stop you from using it randomly.
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