I think I agree with the statement that many super-savers might be compulsive. I think I am. I find that stretching my dollar is a good outlet for those tendencies. In some ways, I enjoy it and it adds to the enjoyment of my life rather than detracting, it's like a game.

I send 10% to your mother.

This sampling should be considered in the context of perhaps the most shrewd, stingy, and miser group of ppl ...

GeorgeNYC said:Hello, longtime lurker but not poster. I am curious about what percentage of your pre-tax salary you save? Ive been working for around 6 years now -- I just did a rough calculation based on my earnings and what I have in savings (bank, stocks) as well as what I have in retirement accounts and I come out to saving about 20% of my total pre-tax income. This does not include equity I have in my house -- just liquid assets such as savings, checking, CDs, stocks, 401k, etc.

What percentage of your pre-tax salary do you save each year or each month?

Only save about 10% of after tax salary, but after all, this is California
My house appreciated almost $300,000 in the last 4 years

jlawrence01 said:autologic said:I'm curious to know more about the people who are saving 50% or more of their pay.

1. Why are you saving so much?
Are you in a transition period and saving specifically for something, some kind of life goal to accumulate wealth, desire to retire early?

2. How are you managing to save such a large portion of your pay?
Are you low income but living off mom and dad?
Are you middle income and living well below your means?
Are you well off ($100K+) and living below your means?
Do you have a second job (or fleabay stuff) to make extra money to save?

I understand the need to have a safety net and desire to retire early with a comfortable amount of money. But beyond that I don't see the point of dieing on top of a huge pile of money.

I was going to pass on this question as I don't like to be considered stingy or miserly. We save 40-50% of our income annually. Our goal is to retire by 55 in eight more years. By retire, I don't mean quit working but rather, find a good part time job away from corporate finance.

Why do we live on so little? Our parents and grandparents were children of the Depression. They taught us the value of thrift, the value of putting money aside for a "rainy day", the value of giving generously.

Our parents encouraged us to go to college but were not in a position to assist much in the finances. In hindsight (but not at the time), that was great. While our friends had time to waste, we worked two or three jobs while taking 15-18 credit hours a semester. It was really unpleasant BUT it taught time management.

Once on our own, we lived in some "scenic" neighborhoods until we could finally afford a house in a decent neighborhood.

Why don't we spend more? I buy EVERYTHING I want to. We travel at least one weekend a month. Three week long vacations. We spend too much on travel.

On the other hand, we have no mortgage. We paid that off in 2000. Remember the broker telling me that was stupid and that I should stay fully invested in growth stocks.

January 1986 was the last car payment. Currently drive an 11 year old Oldsmobile. I was planning on getting another car this year BUT my old car never breaks down and cost me a whopping $300 in maintenance last year. It is bad karma to get rid of a reliable car.

My father will slip us a check each year. We stick it in a special account and don't touch it. We don't need to.

I turn down a LOT of part-time jobs ... yet ocaasionally, some find me. I do those that are interesting to me.

As a general rule, we don't buy a lot of comsumer products. I mean that there are only so many clothes, cars, etc, that you can buy.

Will be funding some college educations as the nephews and nieces hit the college age.

Its funny, but I feel like I am quickly approaching such a situation. Just ran a spreadsheet and the wife and I could work for 5 more years at our current savings/salery rate and then retire at our current budgeted spend rate and live to 120. So we don't save because we have to. We won't retire either and will likely continue to make more money. Plus I brough this up to the wife and she said "great, I get to sit around the house with you while you play xbox for 90 years, I don't think so"

I think everyone in their 20s shoud look into spending more. Once you hit your 30s and/or get married, you run quickly out of things to spend on.

A $2000 suit isn't really any better than a well tailored $600 suit (it is better, but it doesn't feel better anymore). A $120 mens warehouse suit will probably get you through 90% of all business meetings without anyone noticing. Plus I don't look as good in my clotes as I used to.

A $10000 watch isn't really any better than a $1000 watch, which tells the time as well as a $50 watch. (Besides, I wear my vintage German pilot watch more than my Swiss chronograph.)

I used to spend $ on shoes. But I have found a good cobbler and get my exisitng shoes resoled for $30 once a year. Its not a money thing. I like my shoes better than new ones.

I rent my video games and movies and music. (GameFly, NetFlix, napster)

Thanks to eBay, I sell all my old toys to fund buying new ones.

I think its a fact of life that once you can really afford an expensive car, you no longer really want one. Some online budgeting tool told me I should spend no more than $2200 a month on a car. Thats funny... I have an old Subaru. Its a great car. It roughly depreciates at $50 a month.

I do spend a ton of cash on our house. But even that isn't fulfilling. And instead of spending money its keeps making money.

We don't eat out as much anymore. We both really enjoy cooking. When we do eat out we spend a lot. But we don't need to budget becasue it isn't every night.

I don't go out to bars and spend $100 on drinks in a noght anymore. I'm lucky to go out and spens $20 once a month. Bars are boring.

We spend a lot on event tickets. But even thats not much. We maybe go to 3-4 events a month. Just no time for more. Tickets max out at ~$300 or so. With an average of more like $150.

We should probably give more to charity.

Wife and I spend a ton on travel too like the last poster. It always seems like a lot of money. But I think its worth it. Suppose you have to spend it on something.

I guess we are saving for kids. looking forward to them. But I won't want them to be spoiled and will probably give them sticks to play with.

Not sure what the point of all this was. To answer the OP, wife and I save ~%50 of Gross Salary. Reinvest 100% of dividends and interest. Unlike last post we don't prepay our motgage (we do save money we would have put toward prepayment into munis which have a higher return than prepaying our mortgage would have)

-----

When I was 26 I spent every dollar I made. I was single, had no apartment (lived with freinds and in hotels) and made a decent 6-figure salary. It was the greatest year of my life. I traveled every other weekend. I stayed in fancy hotels. I rented fast cars. I ate a ton of Sushi. I partied my butt off like a rock star.

I have no regrets about that year. I could have saved some of that money, but now I am saving more and have nothing good to spend it on. In fact, I almost wish I could go back in time and give myself more money then.

mariojm said:MaxRC said:scorched03 said:mariojm said:85%-90% of post-tax ... around 65-70% of pre-tax.

holy moly.
i thought mine was high at 30%ish.. but 65%?

wonder if people that have 6 figure incomes save more or less.

i remember this post way back of a new grad that was a teacher. he said he tried to save 90% of his salary. too much work no play?I guess if you had extremely cheap housing, no car, and and rarely bought anythig other than food, you can get away with that high of a savings rate. Also, six figure income people have a tough time saving that high because taxes alone will take 40%.

I think anything 10% or higher is a healthy savings rate for the long term.

$380/month apartment, cable included, free internet for many years courtesy of AOL (3 month trials), use A/C sparingly, basic phone, prepaid cell phone with close to no use, no fancy electronic toys, cook at home or find deals on frozen lunches, only buy items when they are at best sales price. Most importantly, force myself to live off of the couple hundred bucks I have going to my local checking account every month, while the real dough is accumulating in a HYS account. I constantly feel like I'm broke. Never quite lost the college life style.

I do not want to offend you, but this sounds like a bad way to live. You are basically living like you are on welfare, and why? Someday you will wake up and be 40 and you will realize you have missed out on a lot of great food, a lot of fun experiences, and other nice things.

If you have millions saved up, maybe you will be able to make up for it, but I think you should look at a bit of balance in your life before that.

I do not want to offend you, but this sounds like a bad way to live. You are basically living like you are on welfare, and why? Someday you will wake up and be 40 and you will realize you have missed out on a lot of great food, a lot of fun experiences, and other nice things.

If you have millions saved up, maybe you will be able to make up for it, but I think you should look at a bit of balance in your life before that.

Well, what is a "good way to live" is largely subjective. *You* might think that this person lives like he is on welfare, but it is quite possible he doesn't look at it this way. Maybe he thinks the greatest food on earth is his cooking. Everyone has their own definition of 'nice things' - at then end of the day all that matters is how happy that person is. I am early thirties, have an okay income, and save about 80% of my pre tax income - I do not own a house, but rent in a very expensive apartment complex, but live very very close to work (fill gas once a month) , own an inexpensive and fuel efficient car, do not have cable TV at all, do not eat out at all, buy things that I need, and watch for sales.

I have been through the stage where I ate out all the time, had all the way upto the premium lineup on cable, and would impulse-buy every new gadget on the market. They are all sitting idle in my home, not necessarily adding to my happiness. So instead of spending my money on things that I do not need and that do not make me happy, I like to invest it in making more of it. Earlier in the thread someone asked "why are you saving so much" - my answer is - I never watch my savings - I just watch my spending and the savings takes care of itself. I guess I am saving so much because I have nothing meaningful to spend on. Am I living life to the fullest ? To the extent money could buy - absolutely . I hope I'll be able to soon grow my portfolio to the level that I do not have to worry about losing my job anymore

Morty said:The important point we're missing here is really just how much do you need to live the life you want, and if you increased your income would you automatically increase your spending.



Good point - and related point - I often read on websites and articles , discussions about "How much do you need for retirement" and they all state the amount needed after retirement as a percentage of pre-retirement income. I have never understood the logic behind that. Shouldn't we instead talk about it as a percentage of pre-retirement *expenses* ?

I think i am more worried about saving for a rainy day rather than retirement. Because to me retirement is for people who work too hard and wait till they are old to play- Not a bad strategy.
I think if i reach a point where i cannot support myself then i will be living on peoples mercy- this is true whether you have money or not

lordsegan said:I do not want to offend you, but this sounds like a bad way to live. You are basically living like you are on welfare, and why? Someday you will wake up and be 40 and you will realize you have missed out on a lot of great food, a lot of fun experiences, and other nice things.

If you have millions saved up, maybe you will be able to make up for it, but I think you should look at a bit of balance in your life before that.

I agree with what stl1859 and Morty had to say on this topic. I enjoy the way I live and hate wasting money on things that give me no satisfaction. Honestly, my 400 sq ft apartment is too big for myself. I have two beds and can choose which one to sleep in, and can choose to sit in any one of my 4 corners. It was actually the right size apartment when my gf and I lived together in it (she moved to a different city for school/work). Cable TV I'd never pay for if it weren't included. 70 channels of garbage and constant advertising, and 5 watchable channels, and the best one (National Geographic) was just axed from the lineup leaving even more garbage. Internet I really don't need at home, so free AOL dial-up suffices, not all that useful on the 1998 computer I have (borrowed from gf) and for all my computing satisfaction I have a dual processor workstation with T-1 line at work.

Let's see, what else can I spend money on? Cell phones I hate, because I constantly get interrupted in real-world conversations by them and have to listen to people's conversations in all public places and have near accidents every day with some idiot not paying attention to the road. Just for emergency when gf and I vist each other, we have prepaids, and I managed to spend all of $10 on it in 6 months (mostly so that they don't cancel my service for inactivity). For my home phone, I actually hate that AT&T is charging more than half my bill just for fees and taxes, and I'm not willing to give them a dime beyond what I need to for the most basic phone service. And literally blowing away money on A/C is not something I believe in (live in a hot state), prefer to open windows to get fresh air.

What else? I do have a fairly new car (2003), cost me $17k, gets me reliably from A to B, and has more power than I need. I get scared when I floor it. Is more comfy than my last ride (1993 Ford Festiva), a lot safer, but next time I wouldn't pay 4x as much as I paid for the Festiva. Just to think, if I would have bought the $35k car I once wanted, and some cell phone idiot destroys it, gives me a lot of confidence I've made a good decision in going for a car half the price. My gf and I do go out to eat once a month on our monthly anniversary (65 of them so far), we choose a fancy place every once in a while but usually it's no better than going to Jack in the Box and it reminds us of all the reasons why we don't want to blow away our money on fancy restaurants. The last couple of years I started eating a lot healthier, and stuffing yourself with healthy food like fruits and veggies doesn't cost a fortune (certainly less than unhealthy processed foods, and even less than more unhealthy restaurant foods).

I guess I could go on and on, but spare you the rest, my point is this: I'm happy with the way I live and actually don't want or even hate a lot of the high priced items I could afford. I hate wasting money on things giving me no satisfaction, and my gf feels the same way. What makes us a lot happier and gives us good laughs is when we get a good deal on something. We go do car test drives, laugh about it later, get a fancy restaurant gift certificate, eat there and then laugh some more about how we'd never pay for that kind of food. We go and use coupons and laugh at how we get 5 bags of groceries and the bill comes out negative 30 cents. Every once in a while we get a bad deal, expired rebate or something, and it makes us very unhappy. It's not about forcing ourselves to save for the future. Wasting money just doesn't make us happy.