Savings

pointsin2016 · February 2016

I am curious to know how much money everyone is able to save each month in dollars . I have been hearing people say that they save absolutely nothing because their budget is just too tight. I also heard a few people say that they save so much that they have to end up pulling money out of savings because they over saved. I just don't see how people can not have anything at all saved.

pointsin2016 · February 2016

Right now after re-evaluating our budget and re-vamping, we are saving 500.00 per month.

kmurphy2131 · February 2016

I think that there are a lot of reasons you may find variable answers. For one thing, I tend to think of "savings" as different from my retirement, any specific goals we are saving for (car, vacation), and sinking funds (car insurance). Not sure why but I do. Also, there is a difference between not saving anything in a month, and not having a savings. We have a very large savings account, but have not saved much the last few months because my husband took a temporary paycut while training for a new better paying job.

LillibetteV · February 2016

I think people tend to use percentages because it's easier to relate across income brackets. If someone saves $2k/month from their paychecks that doesn't really help the person bringing in $2k total for a month. However that same person saying they save 20% IS a helpful target to try and copy.

AprilZ81 · February 2016

Specific dollars really isn't a good way to compare because everyone has different income and we all live in different areas with different cost of living. Someone making $150,000 a year saving $2,000 a month is going to have a very different effect than someone making $25,000 a year saving $2,000 a month. See what I mean?

Our take home is $7,049 a month (after taxes, 401(k), medical insurance and other benefits). DH contributes 10% to his 401(k) including the match and I contribute 6% with another 3% discretionary match.

We save $2,165 of our take home (30% if my math is correct):

$915/month for ROTHs
$250/month for gifts/Christmas
$250/month for vacation
$700/month for general savings
$50/month for car repair/future down payment

Not counted in that total are some additional sinking funds for clothes, home improvement and annual expenses like our COSTCO and Amazon Prime memberships. That is an additional $349 a month although I'm not sure I would count that as "savings" since some months we use our budgeted amount.

hoffse · February 2016

I agree that bare dollars are not helpful.

H and I each save 17% of our gross incomes outright in ROTH accounts. Our employers match another 3%.

We put about 25% of our take-home toward various savings goals.

lbonga1 · February 2016

The amount that we save per month varies because I work as an independent contractor for three different companies, and the amount of work that I get varies. I'm also in school part-time, and my FI is battling some health issues. I think it also depends on what goals you have at the moment. For example, we hadn't been saving anything the last few months because we were paying off credit card debt. Now that that's done, we're saving for a down payment on a house, so any extra money that we have is going to that fund. After that, we'll probably tackle my student loans, so we won't be saving much again.

cbee817 · February 2016

We save on average 10% of our take home pay each year since 2008 (when I started tracking it). Our 401K/403b/529 plans for the girls are not part of that percentage. We also fully fund our Roths each year- that's taken out of our general savings account. Vacation fund is funded by tax returns, DH gets a health insurance waiver by being on my policy, we get $1,000 from my work as a health incentive to work out/get a yearly exam/etc, and other misc money we get over the year that aren't our normal paychecks.

This % will dramatically change once DD#2 is out of day care- currently that is 11% of our take home pay (Our worst year was 2014- 21% of our take home pay went to day care for 2 kids full time).

kmurphy2131 · February 2016

We saved 19% of our gross income last year, that includes emergency fund savings, car maintenance savings, car insurance savings, retirement for me, car downpayment savings, house fund savings, and vacation savings. That doesn't include whatever my husband saved for retirement which is automatic through his work. We also spent money out of the house fund (currently purchasing), vacation savings, and car maintenance fund.

abrewer5 · February 2016

I actually don't save much per month, but that's because I'm working on paying off my student loan by December.

Currently I save 10% with a 5% match for my TSP (like a 401K). Once school is paid off I'll be saving about $1100 a month for various things (about 30% of my take home) and upping my retirement contribution to 15%.

We do have about 4 months of expenses saved in the event of an emergency, so we aren't completely without savings.

LillibetteV · February 2016

kmurphy2131 said:

I think that there are a lot of reasons you may find variable answers. For one thing, I tend to think of "savings" as different from my retirement, any specific goals we are saving for (car, vacation), and sinking funds (car insurance). Not sure why but I do. Also, there is a difference between not saving anything in a month, and not having a savings. We have a very large savings account, but have not saved much the last few months because my husband took a temporary paycut while training for a new better paying job.

I think the same way and I don't include retirement when I think of "savings" - it's considered a non-negotiable bill just like insurance. Since my husband and I both have occasional overtime and he earns a little bit on the side selling old games and collectibles we have a set minimum that must be put into our sinking, emergency, and home renovation funds based on our base salaries. That minimum is $450/week that is set up as auto transfers, but we often save more than that due to extra earnings or low spending months - for the rest of the savings we pretty much wait until we see our checking account buffer getting bigger than necessary and make a lump transfer every few months (or recently we used that buffer to cash-flow our annual car insurance bill instead of touching the sinking fund).

brij2006 · February 2016

We throw $700/month toward various sinking funds for annual expenses, $459/month toward my Roth, and anywhere from $300-$1,000/month toward H's 401k (depending on overtime).

Then we also have about $1,000-3,000/month that we can play with (again, depending on overtime and commissions). Sometimes that gets put aside for a couple of months so we can cash flow a house project or vacation, other times it gets split out toward extra expenditures that month (new running shoes, vet bills, extra medical visits, etc).

We also have a fully funded emergency fund of 6 months, sitting in our savings account. Plus I have a $5,000 buffer in our checking and additional money in savings because that's what makes me feel comfortable.

labro · February 2016

Percentages definitely put it in better perspective for me.

We're putting about 21% towards different savings goals (vacations, car replacement, major home repairs, general savings, etc.).

We're putting 25% towards our retirement savings (18% of our pre-tax earnings and 7% post-tax) (RothIRAs and our 401ks).

KAdams767 · February 2016

I don't count retirement savings as "savings", per se, because that money is basically off limits for almost 30 years for me at this point. But we contribute 25% of our gross income (not including bonuses) to retirement specific accounts (401k and IRAs). After that, we save $1,000/month into an investment account, and then from there, general save-to-spend savings for things like vacation, home improvement, a new car, etc. That misc. savings is usually another $1,000 or so every month.

jessica490 · February 2016

Aside from retirement savings, we save anywhere from a couple hundred dollars to 1,000K per month...it all depends what we have left after bills and credit cards. The money we save goes towards a general savings account/e-fund, house projects, and vacations

short+sassy · February 2016

kmurphy2131 said:

I think that there are a lot of reasons you may find variable answers. For one thing, I tend to think of "savings" as different from my retirement, any specific goals we are saving for (car, vacation), and sinking funds (car insurance). Not sure why but I do. Also, there is a difference between not saving anything in a month, and not having a savings. We have a very large savings account, but have not saved much the last few months because my husband took a temporary paycut while training for a new better paying job.

I get the impression that most of the folks on this board feel the same way. I know I do. I'd even add on "paying down long term debt" as a savings, in a way. For example, if someone's mortgage is $1,000/month, but they put an additional $500/month toward principal. I'd categorize the $1,000/month as a "bill", but the additional $500/month as a "savings".

I think a great goal for most people is to get to a point where they spend a good bit less than they earn. Someone in that boat can then start making progress toward whatever their financial goals are. But when a person lives paycheck to paycheck, it's a tough road to be on because the smallest things can upset that apple cart and there is no progress yet for the future. I've been there. I know some of the folks on this board are there, but are working on it.

Here is my current financial situation and plan, that is a bit unique:

For example, after paying my bills, I have about an extra $2000-$2500/month (soon to be $3000-$3500/month). About 40% of my income (all sources), soon to be 45-50% . But I put none of it in a savings account. I don't even have a savings account. The only savings I have is a $1,000 e-fund. Instead, I pay down my Home Equity Line of Credit balance. Because why would I want to earn 1/4 percent interest in some savings account when I can save myself from paying 4.5% interest on it? And HELOCs are super flexible banking products. I can take money back out of it whenever I need it.

I also don't save for retirement, another savings vehicle, like most people do. At least not in the same way. Though I've only bought one property this way, so far, I use my HELOC for a down payment on real estate investment properties. Earn more income that way. Pay my HELOC down even faster. Then do it again. Rinse and repeat and rinse and repeat. Until I have enough rental monthly cash flow to have a very comfortable living, even without having a f/t job.

Which goes back full circle why, at least to me, my HELOC is a savings vehicle even though it is a loan product.

julieanne912 · February 2016

Like others, I don't consider retirement savings as part of my monthly savings. Right now I am just contributing to my 401k through work so I never even see that money.

My husband and I have separate expenses, so my situation is a bit different than most because he covers most of the "big" stuff that comes up. For me though, I have $100/month out of my budget going to savings. HOWEVER, whenever I receive bonuses or overtime, most of that goes to savings as well. I also recently received a raise in the form of a flat rate bonus once a month, so that extra amount will be going to savings too. This past month I was able to put $300 into savings. I also just have the one savings, I don't do sinking funds or anything like that. So if I can't cash flow something like say, my car registration that comes in July, or my portion of the car insurance premium that we pay every 6 months, or a medical bill, I take it from this savings account. Other smaller things I pay for like our Costco membership, I can usually figure out a way to cash flow most or all of it.

julieanne912 · February 2016

And BTW, it's more common than you think for people to not have savings. I work with a woman who is 50, and she says they pretty much have no savings other than some small retirement accounts. She makes more than me but I know her H makes quite a bit less than my husband does. What they do have is 2 trucks, a 5th wheel, a boat, quads, a trailer to haul the quads, and a harley. I'd be pretty freaked out at her age to be in that position.... I'm already uncomfortable enough where we're at, and we're in our early/mid 30s.

orangehills · February 2016

We don't consider our retirement as part of our monthly savings. But our savings changes per month, but usually it's about 10% of our take home. We used to put a lot more in savings before daycare and moving (higher mortgage). But as we make more money, our savings will go up since we'll keep our living expenses the same, or as close as we can. We also put bonuses, tax returns, and those extra paychecks that pop up into savings. And for us, savings is our efund and anything else that comes along..

emily1004 · February 2016

SITB: We don't do it in $$$, I do it in %. Mostly because H doesn't get paid the same amount every month. Around 25% goes directly into my 401K. 15% of my H's goes into his CMA. We write two checks every year for $5500, to fund the backdoor Roth. As for our savings account, we have a fully funded e-fund, that could stretch us for at least 9 months if need. We have a separate savings account for our home improvements and "party/fun money" Whatever is left over at the end of each month, goes into that account. Last month we didn't put anything into it. Why? We had some fun. We bought a few cases of wine, paid for new soffits and gutter on our house, and went on vacation.

LillibetteV · February 2016

short+sassy said:

kmurphy2131 said:

I think that there are a lot of reasons you may find variable answers. For one thing, I tend to think of "savings" as different from my retirement, any specific goals we are saving for (car, vacation), and sinking funds (car insurance). Not sure why but I do. Also, there is a difference between not saving anything in a month, and not having a savings. We have a very large savings account, but have not saved much the last few months because my husband took a temporary paycut while training for a new better paying job.

I get the impression that most of the folks on this board feel the same way. I know I do. I'd even add on "paying down long term debt" as a savings, in a way. For example, if someone's mortgage is $1,000/month, but they put an additional $500/month toward principal. I'd categorize the $1,000/month as a "bill", but the additional $500/month as a "savings".
I think a great goal for most people is to get to a point where they spend a good bit less than they earn. Someone in that boat can then start making progress toward whatever their financial goals are. But when a person lives paycheck to paycheck, it's a tough road to be on because the smallest things can upset that apple cart and there is no progress yet for the future. I've been there. I know some of the folks on this board are there, but are working on it.
Here is my current financial situation and plan, that is a bit unique:
For example, after paying my bills, I have about an extra $2000-$2500/month (soon to be $3000-$3500/month). About 40% of my income (all sources), soon to be 45-50% . But I put none of it in a savings account. I don't even have a savings account. The only savings I have is a $1,000 e-fund. Instead, I pay down my Home Equity Line of Credit balance. Because why would I want to earn 1/4 percent interest in some savings account when I can save myself from paying 4.5% interest on it? And HELOCs are super flexible banking products. I can take money back out of it whenever I need it.
I also don't save for retirement, another savings vehicle, like most people do. At least not in the same way. Though I've only bought one property this way, so far, I use my HELOC for a down payment on real estate investment properties. Earn more income that way. Pay my HELOC down even faster. Then do it again. Rinse and repeat and rinse and repeat. Until I have enough rental monthly cash flow to have a very comfortable living, even without having a f/t job.
Which goes back full circle why, at least to me, my HELOC is a savings vehicle even though it is a loan product.

Further proof there are a million ways to calculate "savings" because I don't include our extra loan payments in savings either! By excluding retirement and debt repayment I trick myself into saving more to get to that 20% minimum savings rate.

als1982 · February 2016

We personally DO consider retirement "savings" and are maxing out all available accounts. Additionally, we also put $3,000 or so extra a month towards our student loan balance. Otherwise, we only keep $1,000 emergency fund.

brij2006 · February 2016

julieanne912 said:

And BTW, it's more common than you think for people to not have savings. I work with a woman who is 50, and she says they pretty much have no savings other than some small retirement accounts. She makes more than me but I know her H makes quite a bit less than my husband does. What they do have is 2 trucks, a 5th wheel, a boat, quads, a trailer to haul the quads, and a harley. I'd be pretty freaked out at her age to be in that position.... I'm already uncomfortable enough where we're at, and we're in our early/mid 30s.

*****************************
'Merica

vlagrl29 · February 2016

It varies. All the money I make off of gigs goes towards various savings - IRA, E Fund, Home Improvement Fund. I think last month was around $575 total. It just depend on how many gigs I book a month. When we first started out savings it was as little as $20 a month - better than nothing.

short+sassy · February 2016

LillibetteV said:

short+sassy said:

kmurphy2131 said:

I think that there are a lot of reasons you may find variable answers. For one thing, I tend to think of "savings" as different from my retirement, any specific goals we are saving for (car, vacation), and sinking funds (car insurance). Not sure why but I do. Also, there is a difference between not saving anything in a month, and not having a savings. We have a very large savings account, but have not saved much the last few months because my husband took a temporary paycut while training for a new better paying job.

I get the impression that most of the folks on this board feel the same way. I know I do. I'd even add on "paying down long term debt" as a savings, in a way. For example, if someone's mortgage is $1,000/month, but they put an additional $500/month toward principal. I'd categorize the $1,000/month as a "bill", but the additional $500/month as a "savings".

Further proof there are a million ways to calculate "savings" because I don't include our extra loan payments in savings either! By excluding retirement and debt repayment I trick myself into saving more to get to that 20% minimum savings rate.

Haha! I think of it as savings because, that same money could go into a savings account, but is instead going toward paying down a long term asset. And it eventually becomes savings. Either by paying that house off earlier or having that much more money in equity upon its sale.

But I totally understand why other people wouldn't see it that way.

And the savings I ALWAYS forget about, my HSA account. I sock away the max into that bad boy every year, for the last 3 years. It automatically comes out of my paycheck, so it's already "missing" income that I don't calculate into my monthly income. That's close to an extra $600/month.

csuave · February 2016

brij2006 said:

julieanne912 said:

And BTW, it's more common than you think for people to not have savings. I work with a woman who is 50, and she says they pretty much have no savings other than some small retirement accounts. She makes more than me but I know her H makes quite a bit less than my husband does. What they do have is 2 trucks, a 5th wheel, a boat, quads, a trailer to haul the quads, and a harley. I'd be pretty freaked out at her age to be in that position.... I'm already uncomfortable enough where we're at, and we're in our early/mid 30s.

*****************************
'Merica

This. A lot of people are either Savers or Spenders. If you fall squarely into one of these camps the savings percentage will be very different from the other.

I'm not sure where I am at now given my current situation as a married person and with a partner that doesn't have steady income. But when I was single I probably had around 50% of my gross income for living expenses including a very affordable mortgage and a car payment as my only debts. The other half went to taxes, retirement, charitable giving and general savings and added up to a high savings percentage.

My brother (a spender and a family man) was dumbfounded that I lived without cable, internet, and in general had such low monthly expenses.

short+sassy · February 2016

csuave said:

brij2006 said:

julieanne912 said:

And BTW, it's more common than you think for people to not have savings. I work with a woman who is 50, and she says they pretty much have no savings other than some small retirement accounts. She makes more than me but I know her H makes quite a bit less than my husband does. What they do have is 2 trucks, a 5th wheel, a boat, quads, a trailer to haul the quads, and a harley. I'd be pretty freaked out at her age to be in that position.... I'm already uncomfortable enough where we're at, and we're in our early/mid 30s.

*****************************
'Merica

This. A lot of people are either Savers or Spenders. If you fall squarely into one of these camps the savings percentage will be very different from the other.

I'm not sure where I am at now given my current situation as a married person and with a partner that doesn't have steady income. But when I was single I probably had around 50% of my gross income for living expenses including a very affordable mortgage and a car payment as my only debts. The other half went to taxes, retirement, charitable giving and general savings and added up to a high savings percentage.

My brother (a spender and a family man) was dumbfounded that I lived without cable, internet, and in general had such low monthly expenses.

One of the most eye opening articles I've ever read was about the psychology of this and a study that was done. I don't remember exactly how many people were in the sample, but it was a good sized one. They followed them, their income levels, and their spending habits over a 20-year period. They found that, the people who saved money, always saved money...no matter how little their income and even in cases where they made more money and then it dropped. And the people who lived paycheck to paycheck, always lived paycheck to paycheck, not matter how much money they made.

I have a good friend who is super frugal and definitely a saver. I've known her over 15 years and she has always been like that. Although they are broken up now, she was dating a guy for a year that was completely her polar opposite when it came to money. Serious spender. He made 3x what she did...nice six figure income...yet had to borrow money from her a few times because he "ran a little shy a few days before payday". He did at least always pay her back promptly on payday, but still! But hey, at least she got to ride around in his brand new BMW or Mercedes. Whichever new car flavor he had gotten that year.

jessica490 · February 2016

als1982 said:

We personally DO consider retirement "savings" and are maxing out all available accounts. Additionally, we also put $3,000 or so extra a month towards our student loan balance. Otherwise, we only keep $1,000 emergency fund.

What would you do if you or your H ever lost your job with only $1K in an e-fund? I can't remember if you are mortgage free or not.....but say you had a mortgage and car payments, student loans, cable bill, etc, how would you pay for those things? It would make me nervous with only $1K as a cash fund...or do you have others liquid accounts you can pull from for an emergency?

I always though my job was safe until layoff's were mentioned months ago...since then we've been trying to build our e-fund (currently at almost $12K) and I still feel like I would panic and not have enough....what if our furnace broke? those cost around $5-6K on top of paying all our normal bills while I was unemployed?

Anyone can chime in, but I'm just asking you since you mentioned you only have 1K.

I tend to think of the worst possible scenario lol

hoffse · February 2016

What would you do if you or your H ever lost your job with only $1K in an e-fund? I can't remember if you are mortgage free or not.....but say you had a mortgage and car payments, student loans, cable bill, etc, how would you pay for those things? It would make me nervous with only $1K as a cash fund...or do you have others liquid accounts you can pull from for an emergency?
I always though my job was safe until layoff's were mentioned months ago...since then we've been trying to build our e-fund (currently at almost $12K) and I still feel like I would panic and not have enough....what if our furnace broke? those cost around $5-6K on top of paying all our normal bills while I was unemployed?
Anyone can chime in, but I'm just asking you since you mentioned you only have 1K.
I tend to think of the worst possible scenario lol

I can't speak for @als, but H and I keep a lot less in our e-fund that many would be comfortable with. We keep right around $5K, and we dip into it frequently to help cash-flow large reimbursable expenses while we are waiting for reimbursements to arrive.

I am comfortable with this because we would BOTH have to lose our jobs to be in a really tight spot. Living on a single income would not be comfortable for us, but it would be possible.

I also get cold-calls for jobs once or twice a month. H is starting to get them too. We could find something else if we needed to.

brij2006 · February 2016

jessica490 said:

als1982 said:

We personally DO consider retirement "savings" and are maxing out all available accounts. Additionally, we also put $3,000 or so extra a month towards our student loan balance. Otherwise, we only keep $1,000 emergency fund.

What would you do if you or your H ever lost your job with only $1K in an e-fund? I can't remember if you are mortgage free or not.....but say you had a mortgage and car payments, student loans, cable bill, etc, how would you pay for those things? It would make me nervous with only $1K as a cash fund...or do you have others liquid accounts you can pull from for an emergency?
I always though my job was safe until layoff's were mentioned months ago...since then we've been trying to build our e-fund (currently at almost $12K) and I still feel like I would panic and not have enough....what if our furnace broke? those cost around $5-6K on top of paying all our normal bills while I was unemployed?
Anyone can chime in, but I'm just asking you since you mentioned you only have 1K.
I tend to think of the worst possible scenario lol

We did a $1k emergency fund while we were in debt payoff mode. It was only a temporary situation, but we were comfortable with it because we were putting close to 1 person's income toward debt each month. So if something were to have happened during that 2 years it took us to pay off the non-mortgage debt, we would have stopped paying extra toward it and just lived off that 1 persons' income.

The biggest plus side to this was that as we got closer to the end of paying off the debt, a job loss or an emergency didn't really sting us much because we no longer had those car payments and a majority of the student loan payments. So our cash flow from month to month free'd up very quickly and we could use that to cover as many emergencies as possible. Which we did. $1,200 clutch replacement on H's car, we stopped our snowball for that month. Didn't even need to dip into the emergency fund.

cbee817 · February 2016

jessica490 said:

als1982 said:

We personally DO consider retirement "savings" and are maxing out all available accounts. Additionally, we also put $3,000 or so extra a month towards our student loan balance. Otherwise, we only keep $1,000 emergency fund.

What would you do if you or your H ever lost your job with only $1K in an e-fund? I can't remember if you are mortgage free or not.....but say you had a mortgage and car payments, student loans, cable bill, etc, how would you pay for those things? It would make me nervous with only $1K as a cash fund...or do you have others liquid accounts you can pull from for an emergency?
I always though my job was safe until layoff's were mentioned months ago...since then we've been trying to build our e-fund (currently at almost $12K) and I still feel like I would panic and not have enough....what if our furnace broke? those cost around $5-6K on top of paying all our normal bills while I was unemployed?
Anyone can chime in, but I'm just asking you since you mentioned you only have 1K.
I tend to think of the worst possible scenario lol

I'm this way too- we have about 10 months of expenses available in case anything happens. I don't like when it gets much lower than that.. not sure if it's because we have 2 kids and that DH has been through 2 lay offs since they were born, but I'm definitely someone that keeps a lot of money on hand for an emergency.

Savings

Re: Savings

Choose Another Board

Search Boards