[ire]

I read this article and it got me thinking (the article isn't really that good)
http://www.msnbc.msn.com/id/20592260/site/newsweek/

Do you save? Retirement or otherwise. If so, what percent of your income? I find it interesting that someone making six figures would find it hard to save. I save (not enough) but its around 20%.

 

[binary visions]

I did a poll in the Lounge about a year ago, might be interested in the results:

http://www.ridemonkey.com/forums/showthread.php?t=160486

 

[LordOpie]

I save (not enough) but its around 20%.

how is 20% not enough?

While some people don't like the "Fair Tax" proposal, a consumption tax would encourage more savings -and- might be the one fix that Social Security needs.

 

[ire]

how is 20% not enough?

While some people don't like the "Fair Tax" proposal, a consumption tax would encourage more savings -and- might be the one fix that Social Security needs.

Ok, maybe its enough....but I waste a lot of money, thats what I should have said

 

[LordOpie]

Ok, maybe its enough....but I waste a lot of money, thats what I should have said

You mean you save 20%, pay your bills and then spend your discretionary income for fun?

Or are you wiping your ass with $20s? ...please say that one

 

[reflux]

God clearly wants to teach Snow a lesson.

 

[ire]

You mean you save 20%, pay your bills and then spend your discretionary income for fun?

Or are you wiping your ass with $20s? ...please say that one

Wow, my hole keeps getting bigger. I'll go with....................wiping my ass with $20s. We only recently started saving that much...finally got our cards paid off

 

[manimal]

i save as much as my meager salary allows w/ three kids and that equals out to about 15%. it's nowhere near enough of what i need but i've almost built up enough of a cushion that i can last about 5months in the event that i lose my job. i have a decent retirement package at work but it's on a 30yr plan so that means i have 25 years to go....and a LOT can change in that amount of time. i don't count on my retirement and 401k to be there when i'm done working but it would be nice. i'm also not saving for my kids college right now either, i paid my way through just fine and so can they when the time comes....if they even decide to go to college right away.
it's scary and frustrating trying to plan for the future but i don't put much trust a government that has never truly balanced the books to handle my golden years.

 

[ire]

i save as much as my meager salary allows w/ three kids and that equals out to about 15%. it's nowhere near enough of what i need but i've almost built up enough of a cushion that i can last about 5months in the event that i lose my job. i have a decent retirement package at work but it's on a 30yr plan so that means i have 25 years to go....and a LOT can change in that amount of time. i don't count on my retirement and 401k to be there when i'm done working but it would be nice. i'm also not saving for my kids college right now either, i paid my way through just fine and so can they when the time comes....if they even decide to go to college right away.
it's scary and frustrating trying to plan for the future but i don't put much trust a government that has never truly balanced the books to handle my golden years.

I agree. Good job on saving so much with a family...I did forget to say that I'm married with no kids. Having a family and saving that much is impressive. I work for the govy and I agree about the pension; if its there when I retire, great, if not I want to have other accounts to fall back on.

 

[urbaindk]

I put 10% pretax into retirement, and about 10% of my take home into a rainy day savings / discretionary savings account. Unfortunately we've been dipping into the rainy day fund since my son was born and my wife is a stay at home Mom. But that's what a rainy day fund is for, right? My wife just got a part-time job working between 10 and 20 hrs a week so we should be back in black soon.

We payed off the CC's last year. That was quite a relief! The only debt we have is from my student loans which have a pretty low interest rate and low monthly.

 

[fluff]

Saving vs paying off your mortgage sooner - discuss.

 

[Westy]

Saving vs paying off your mortgage sooner - discuss.

Depends on interest rates. If your mortgage interest is higher than what you could make in an investment it doesn't make sense to pay off early, especially when you consider the tax break.

 

[urbaindk]

If your mortgage interest is higher .

Lower?

 

[Westy]

Lower?

Something like that.

 

[urbaindk]

Something like that.

Believe it or not,
I'm walking on air.

 

[Westy]

Believe it or not,
I'm walking on air.

Wearing Nikes?

 

[SkaredShtles]

If you're investment horizon is long-term then you are almost always better investing rather than paying off a mortgage early.

Unless, of course, your mortgage is costing you 18%.

 

[SkaredShtles]

I read this article and it got me thinking (the article isn't really that good)
http://www.msnbc.msn.com/id/20592260/site/newsweek/

Do you save? Retirement or otherwise. If so, what percent of your income? I find it interesting that someone making six figures would find it hard to save. I save (not enough) but its around 20%.

It's actually the American way to save jack squat:

 

[Echo]

Every once in a while I'll realize I've accidentally saved a $10 bill, but a quick trip to the beer aisle always fixes that blunder.

 

[jimmydean]

When my wife has a job (about 2 months out of the year average) I tend to save about 15%, I did have 6%+company match 6% 401k at my last job, bu there is no match here.

I did set up a 6% checking account that I am using as my "savings" account now. I need to make a few payments using that account to earn that return, but it's only 12 debit purchases and I use the bill pay feature.

My 401k last year earned a whopping 5%, so my checking account is ahead of the game.

I wished I would have started earlier than 35, but life was good back then. At my going rate, I should have a little more than 1.5M in the bank and if there is something like social security, it would be nice.

 

[SkaredShtles]

When my wife has a job (about 2 months out of the year average) I tend to save about 15%, I did have 6%+company match 6% 401k at my last job, bu there is no match here.

Since my wife started working full time last January we've been saving about 40-50% of our combined incomes. It'll come in handy as we head into that 5 year recession...

 

[jimmydean]

Since my wife started working full time last January we've been saving about 40-50% of our combined incomes. It'll come in handy as we head into that 5 year recession...

My paycheck covers our monthly stuff well, we just don't have a whole lot left. But when she was working 25-30 hours @ $9 an hour, we average about $600 a month that goes mostly to savings.

We are about 5 months out from being debt free (minus my student loans) and we plan to buy a house next year if the housing market stays in the toilet.

Thanks to Manimal I started following the Dave Ramsey method and built up my "emergency" fund and started saving more. We've been "cash only" for nearly 3 years now, but I have a lot of projects. The only thing we have left right now is the car payment and when that's done, we are paid off.

 

[SkaredShtles]

My paycheck covers our monthly stuff well, we just don't have a whole lot left. But when she was working 25-30 hours @ $9 an hour, we average about $600 a month that goes mostly to savings.

We are about 5 months out from being debt free (minus my student loans) and we plan to buy a house next year if the housing market stays in the toilet.

Thanks to Manimal I started following the Dave Ramsey method and built up my "emergency" fund and started saving more. We've been "cash only" for nearly 3 years now, but I have a lot of projects. The only thing we have left right now is the car payment and when that's done, we are paid off.

We were fortunate to get everything in order just before we started having kids & the wife quit her job. Now with her back at work (with a good paying contract gig) and us used to living comfortably on my salary, we're socking the green away.

 

[jimmydean]

We were fortunate to get everything in order just before we started having kids & the wife quit her job. Now with her back at work (with a good paying contract gig) and us used to living comfortably on my salary, we're socking the green away.

That's what was supposed to happen for us last time. Our daughter was born in 2000 when I was making grip, then in 2001 I went to about 50% of what I was making and we hadn't saved jack (lesson learned).

We have done ok with her not working, but with our daughter in school full time now, there is no reason for her not to work (other than she doesn't like to, must be nice).

 

[SkaredShtles]

<snip> (other than she doesn't like to, must be nice).

That's why we're socking it away right now. I'm planning to quit my job in the not to distant future.

 

[urbaindk]

Wearing Nikes?

On a wing and a prayer.


I should add that we have almost learned to live on what I make alone with my wife not working minus the occasional dip into the personal savings. There's a financial term for that, but now it is slipping my mind (something about adjusting to perceived earnings?) Anybody know the term?

So with my wife working we'll be able to pour almost all of her earnings back into savings and live on what I make. Not 50% like SS, because she'll make significantly less than me, but still a good bit.

 

[fluff]

Depends on interest rates. If your mortgage interest is higher than what you could make in an investment it doesn't make sense to pay off early, especially when you consider the tax break.

Glossing over your embarrassing error there is another factor at play here - that is the amount in questio; 5% of $100,000 is a lot more than 10% of $10,000.

I understand (though I've never done the calculation myself) that if you have a 25 year mortgage and decided you could double the payments then it would become a 5 year mortgage. Worth considering as you would then have 20 years worth of mortage payments to invest.

It's about paying off the capital, rather than mainly interest.

 

[jimmydean]

It's about paying off the capital, rather than mainly interest.

But if I get one of those awesome "interest only" loans I could invest $400 a month or more because of my reduced monthly payment, right?

 

[manimal]

Thanks to Manimal I started following the Dave Ramsey method and built up my "emergency" fund and started saving more. We've been "cash only" for nearly 3 years now, but I have a lot of projects. The only thing we have left right now is the car payment and when that's done, we are paid off.

wow! cool, congrats we've been debt free for a while now but my pocketed G.I. Bill money runs out soon which means that my wife's seasonal work-from-home job will have to become a permanent deal somehow for us to make out budget.
even the 17% raise i just got won't cover enough of the gap for us to maintain our current budget (savings included) if my wife doesn't find something more productive. but with 3 kids, it's hard to find something that is either 1. at home or 2. still profitable after putting 3 kids in childcare

 

[jimmydean]

but with 3 kids, it's hard to find something that is either 1. at home or 2. still profitable after putting 3 kids in childcare

That's one reason my wife has only worked part time or not at all and we only have the one. Since Maddie started 1st grade, she is now in school until 2:30, so that makes for a little better schedule. But my wife still doesn't want to work full time and finding part time stuff is tough (unless you want to work warehouse or other manual labor).

She did just start doing a few kids clothing auctions on ebay. We will see if that pays off or not. The idea is to hit yard sales, then sell them of as "lots" on ebay. She has a good method and she even made a few bucks right off the bat, but we will see if she can make a couple hundred a month or not real soon.

 

[SkaredShtles]

That's one reason my wife has only worked part time or not at all and we only have the one.

My wife's earnings would likely have been more than my current earnings had she not decided to quit and stay home for 5 years with the kids.

Now it's time for her to win the bread.

I'm glad she stayed home instead of me - I think I would've made a lousy mom.

 

[jimmydean]

My neighbor did that. He has been home with the kids until earlier this year because his wife made the bucks.

He went and got his real estate license and has been slowly easing into that as a full time gig.

I stayed home for 6 months when I first got laid off in '01 and that damn near killed me. Daytime TV sucks.

 

[SkaredShtles]

<snip>

I stayed home for 6 months when I first got laid off in '01 and that damn near killed me. Daytime TV sucks.

How did you find time for TV?

 

[jimmydean]

How did you find time for TV?

My daughter napped from noon until 2 (she was 18 months old or so at the time). I tried to watch TV a few times and just got pissed off.

 

[SkaredShtles]

My daughter napped from noon until 2 (she was 18 months old or so at the time). I tried to watch TV a few times and just got pissed off.

 

[fluff]

If you're investment horizon is long-term then you are almost always better investing rather than paying off a mortgage early.

Unless, of course, your mortgage is costing you 18%.

So, are you saying that I should mortgage myself to the hilt and invest my borrowings?

 

[Spero]

I'm more or less forced to save. I'm in commercial real estate and the commissions can be few and far between...and the 'between' is going to start getting longer from here on out for the next 2-5 years most likely. I generally put my taxes and 20% on top of that into savings and I haven't run into any issues, although my first priority now is getting rid of all my credit card debt which isn't much, but enough to be annoying.

 

[SkaredShtles]

So, are you saying that I should mortgage myself to the hilt and invest my borrowings?

If you're a gambling man. Usually mortgage companies won't allow you to mortgage yourself to the hilt (the last 10 years non-withstanding ) - as you take on more mortgage debt you get riskier and the rates will rise... until it doesn't make sense to invest but rather pay off your mortgage.

 

[SkaredShtles]

<snip> my first priority now is getting rid of all my credit which isn't much, but enough to be annoying.

Ummm....... do yourself a favor and don't get rid of your *credit* - get rid of your *debt.*

 

[Spero]

Ummm....... do yourself a favor and don't get rid of your *credit* - get rid of your *debt.*