What is Your Personal Savings Rate?

[Judique]

Well, I max out my 401K. So less of my money goes to the IRS. I also don't have children, and I think that has a lot to do with it.
Over the years, every time I have received a raise, I have never increased my discretionary spending. I also never incurred any debt. I paid my way through college with no student loans. I'm not saying everything was easy, but the only debt I have is my home. But, I wonder how financially secure I would be if I did have children.

It looks like you had a good handle on how to manage your money, so I'm sure that even with children, you would have done your best with your income.

I'm just always amazed how much life costs! (Doing fine with savings though.)

 

[nalajms]

After deductions I barely have 60% left!

I'd change that to "after taxes". Since it's tax season, I'm always floored by how much we have to pay!!! My parents are always nagging us about saving. After taxes, daycare, healthcare, we're lucky to have any money left.

We max out 401k contributions. The rest goes to mortgage and basic bills. Anything left goes to Disney. We don't purposely save, but we also do not live beyond our means.

 

[lvillotta1]

As it stands now I am barely making ends meet. Single raising 2 girls and their activities every dollar is accounted for. I put 6% into my retirement acct and they match another3%. I have about $10,000 in a Roth. I have another $225,000 from a previous employer making 8-9%. I am 43 with another 27years to work. I have $2500 in my emer fund. All is all I feel like I am doing well.

 

[kathy884]

I'm confused by this whole personal spending rate thing.

Is your personal savings rate supposed to be calculated on gross or net income? Money that goes to Uncle Sam and the state is by far our biggest expense and risk financially and money we can't touch, so I do all my budgeting based on net.

And what is personal savings? I put monthly money aside to buy a car every 10 year, but I will spend all of that, not more than that, but most of it. I put monthly money aside to go on vacation, but I will spend all of that too or forward it toward the next vacation. I put monthly money aside to pay for taxes and insurance, but I will spend all of that (I only put aside what I need). I put monthly money aside for my son for college, but I will spend all of that too most likely. I also put money aside for home repairs and improvements that I feel I can spend whenever I need that. I put money aside monthly for charitable contributions too, but will by the end of the year write checks that use this all up. So all this money that might look like a high savings rate is really just budgeting on my part, and I would think not part of my personal savings rate. Would you agree?

And even retirement money is money that you will probably eventually spend, but I guess since that won't be touched for about 10 year or so, that would be personal savings. For that though I prefer the term retirement savings. I put 15% in a 401K, so I think I have to say my retirement saving rate is 15% and I don't have any personal savings.

I guess money you'd put in an emergency fund would be personal savings as you have no specific spending in mind for it. But my emergency fund is funded, and extra money that I have beyond my budgeted items above I tend to put in my son's college education fund. And I saw that I was ahead on that and could still be on target with college funding sending my son and a friend of his to study abroad in Italy this summer (something I thought would be really cool for them to do and I am paying for both of them to do this.)

So I think I'm a good budgeter, and I don't live paycheck to paycheck. Buy my personal savings rate is 0% because almost every dollar that I put aside is allocated to future spending.

 

[kathy884]

So from looking up a few definitions online it sounds like personal savings is wealth accumulation / investment not deferred spending. Would you say personal savings is money invested in things like real estate or the stock market that you aren't just planning to take back out and use for future spending? Just thinking about it, maybe I should cut back on my future spending accounts and devote certain monies to have no other purpose than wealth accumulation. // Kind of late for me to start this, as I'm already in my mid 50s, but I suppose I could do a little of this. // It probably ends of being an retirement savings / emergency fund backup that would most likely just grow and never be used. // Economists talk about this being important for us to all do as a group, so the government, etc. doesn't have to borrow as much from overseas and we aren't so dependent on other countries as a debtor nation. Yet on the other hand, Economists talk about our being a consumer driven economy and businesses hurting when we don't spend.

Sad, but this personal savings concept is a foreign concept to me. I've just worked to get an emergency fund, fund retirement, fund college, pay for my next car with cash while giving a certain percentage to charity, etc. And above and beyond that I think of the money being available for cool experiences (e.g. DS getting to experience Europe and study abroad -- a college experience add on).

I balance my budget, but I don't specifically work on wealth accumulation. Sure, I invest for long term things but interest and principal go into a specific fund too. And if I'm over funded, there is some wealth accumulation to some degree, but that's about the extent of it.

What do you guys think? Do you put money aside for the sole purpose of wealth accumulation? It almost sounds greedy, but economists make it sound like that's what's really needed to keep capital costs low and help our country as a whole. And that as many of us doing this as possible would help out society as a whole?? // So maybe I should start really having personal savings??

 

[Cormoran]

So from looking up a few definitions online it sounds like personal savings is wealth accumulation / investment not deferred spending. Would you say personal savings is money invested in things like real estate or the stock market that you aren't just planning to take back out and use for future spending? Just thinking about it, maybe I should cut back on my future spending accounts and devote certain monies to have no other purpose than wealth accumulation. // Kind of late for me to start this, as I'm already in my mid 50s, but I suppose I could do a little of this. // It probably ends of being an retirement savings / emergency fund backup that would most likely just grow and never be used. // Economists talk about this being important for us to all do as a group, so the government, etc. doesn't have to borrow as much from overseas and we aren't so dependent on other countries as a debtor nation. Yet on the other hand, Economists talk about our being a consumer driven economy and businesses hurting when we don't spend.

Sad, but this personal savings concept is a foreign concept to me. I've just worked to get an emergency fund, fund retirement, fund college, pay for my next car with cash while giving a certain percentage to charity, etc. And above and beyond that I think of the money being available for cool experiences (e.g. DS getting to experience Europe and study abroad -- a college experience add on).

I balance my budget, but I don't specifically work on wealth accumulation. Sure, I invest for long term things but interest and principal go into a specific fund too. And if I'm over funded, there is some wealth accumulation to some degree, but that's about the extent of it.

What do you guys think? Do you put money aside for the sole purpose of wealth accumulation? It almost sounds greedy, but economists make it sound like that's what's really needed to keep capital costs low and help our country as a whole. And that as many of us doing this as possible would help out society as a whole?? // So maybe I should start really having personal savings??

All I want to do is have enough money to enjoy my retirement. I don't care about accumulating wealth, I care about being able to maintain my current lifestyle in retirement with additional time and money for traveling. So yes, my goal is saving. I max my 401K, max my Roth IRA, and have a 1 year salary in an emergency fund.

I don't know if this is wiser than spending money and enjoying life in the moment, but I don't think I would be comfortable living like that. Debt makes me uncomfortable.

 

[eliza61]

I don't know if this is wiser than spending money and enjoying life in the moment, but I don't think I would be comfortable living like that. Debt makes me uncomfortable.

Having debt doesn't necessarily mean you aren't savings. I was never on the "debt free" bandwagon. I grew up in an early time where folks didn't have credit cards so I never caught onto charging a lot of stuff, for my family the goal has always been to increase our net wealth, which for us means making sure our dollars work as hard as humanely possible. some times that means savings and investing, other times it makes more sense to pay off whatever debt.

For example, NJ suffers from horrendously high property taxes, what's happening to a lot of our seniors is that even though their houses are paid for they can't afford the taxes and live. my property taxes were 12,000 bucks a year before I moved. Every spring in my old township we had sheriff sales from seniors who simply could not keep up with the property taxes. So for many being debt free didn't help them much.

In my retirement I want to be a snowbird, which means in reality I will always have some type of "rent", because I'm probably not going to buy whatever housing I have in the south. So having a mortgage when I retire doesn't make me uncomfortable. I think the better question than do you save is probably do you have a plan.

 

[Cormoran]

Having debt doesn't necessarily mean you aren't savings. I was never on the "debt free" bandwagon. I grew up in an early time where folks didn't have credit cards so I never caught onto charging a lot of stuff, for my family the goal has always been to increase our net wealth, which for us means making sure our dollars work as hard as humanely possible. some times that means savings and investing, other times it makes more sense to pay off whatever debt.

For example, NJ suffers from horrendously high property taxes, what's happening to a lot of our seniors is that even though their houses are paid for they can't afford the taxes and live. my property taxes were 12,000 bucks a year before I moved. Every spring in my old township we had sheriff sales from seniors who simply could not keep up with the property taxes. So for many being debt free didn't help them much.

In my retirement I want to be a snowbird, which means in reality I will always have some type of "rent", because I'm probably not going to buy whatever housing I have in the south. So having a mortgage when I retire doesn't make me uncomfortable. I think the better question than do you save is probably do you have a plan.

I'm sorry, I guess I should have clarified. Having credit card debt and car payment debt makes me uncomfortable. I do have a mortgage, but it will be paid off when I retire. However, I may decide to live somewhere else. Who knows?

 

[barkley]

if we're speaking of all savings-68% of our net income. deduct what's really deferred spending savings (Christmas/birthday gifts, car and home insurance/property taxes, twice yearly propane refill, pest/weed treatments...-stuff that's not paid on a monthly basis) and it drops to 55% of our net.

 

[ZephyrHawk]

Well, I'm not really sure if you count retirement plans. DH and I have had a variety of plans from various jobs. Currently, with employer contributions, DH contributes 10% and I do about 14%. We also have a couple life insurance policies we recently started up, which is another way we're saving. Then we have a college fund for DD, which doesn't have a ton in it yet (she's 2), but we contribute about 5% of our take home pay to that monthly. So, I guess a total of about 25%, give or take. What I don't have is a comfortable "savings" account. I did, but then we bought some property last year and pretty much depleted it. Now I'm in the process of determining whether it's more economically sensible to build up that emergency cushion more, or to pay down our student loans more.

 

[kkmcan]

We save about 18% of Dh's salary every month. Plus another $10,000 a year towards our disposable savings account for misc stuff- vacations, kids school fees, car repairs, new tires, home upgrades, etc. We already have 6 months fully funded emergency savings account.

 

[NeverlandClub23]

I'm not really sure what our savings rate is. We're in our mid 30's without kids and we make pretty good money, but all money goes to savings besides our three mortgage payments. I have about 20 Capitalone360 savings accounts that my entire paycheck gets divided up into and they include car insurance (we pay in full because it's cheaper), car maintenance, gifts, vacations, retirement, dog "insurance", cell phones (we pay once a year because it's cheaper), work expenses, etc. The only thing that isn't saved out of our paychecks/rental income is gas, mortgage payments, food, and utilities. We pay in cash for those things. We had major credit card debt in our early 20's and definitely learned from our mistakes (thank goodness we were never late or anything; just wasted a lot of money on interest!). We live pretty frugally too. We want to retire at 50 so we always keep that at the forefront of any decision we make about spending money (besides vacations lol. I think we would go without heat/AC to still be able to take several vacations every year).

 

[ilovemk76]

for me, I inly count money as saved it is never spent the entire year.

We might "save" for a vacation that wa are taking later this year, but it is spent this year, so it is not part of our savings rate.

We are not concerned by % but by the amount in our plan that gets us to retirement at the age and spending amount we want.

DH and I both max out our 401K each year and then save $X more per year. Some years even more than $X and some year we fall short.

We are on tack for our plan and that is all we really are concerned with.

 

[3CW]

We save about 25%, with the goal of paying off student loans and the mortgage on the house we were underwater on when we needed to move out of state. After that, 401ks will be fully funded (putting some in now but not the limit) and we'll plan for other savings goals, like when the cars eventually need to be replaced, etc.

 

[3CW]

That's a very hard question to answer and I think the ole "instant gratification" reply is just a pat answer so we don't have to exam some serious social problems.
For example, if you are living in abject poverty, how much are you saving? Does the survey take into account different tax situations? for example, my late dh's family was from a country that paid for kids college tuition and health care. do you know how much I could save if I didn't have to pay for college tuition for 2 kids, lol.
What about life changing situations? when my dh passed away his salary was 70% of our household income. now we lived below our salaries but basically my income dived, yes we had our ducks in a row but if we didn't????

This survey doesn't say much and if you read on you'll see that from 1959 until today our savings rate averaged about 6.5% so in reality we've hung in there.

LoL, after saving for all our lives, my dh died from cancer at 55. I've crossed over to the dark side, I'm retiring early and spending.

I agree with this; our family is saving more than we ever did in the past precisely because we're making more than we ever did in the past. During the years we were below the poverty line, every penny went to keeping the lights on and the bills paid. You prayed you didn't get sick and need to pay the doctor, that the car didn't need repairs, that your thread-bare work clothes would hold out a little longer, etc, simply because there weren't any extra dollars to spare.

 

[NY Pirate Princess]

Our only debt is the mortgage. We purchased last year to get our child into an acceptable school district (the one we left had a 49% graduation rate and substantial deficiencies). It is a 15 year note at 3.25%. I hope to retire at 55 but won't go until the house is paid off. Making prepayments. As this long winter unfolded (that still is not over, it's supposed to snow here all weekend) I have deferred my dream of early retirement to "until we have the house paid off AND a snowbird plan in place and paid for". I save 10% in our 401K type investment and we will both qualify for pensions which will replace about 30% of our income. $30 a pay period goes into 529 for only child, $100 a pay goes into emergency fund, also have pretax deductions for child care. I am trying to shave my income down to the exact amount we need to live on while saving in a variety, mostly pretax, vehicles.

However, while I go to my government job in suits I bought at walmart and shoes I bought at Kmart, we put almost no limit on the money we spend on experiences. I have watched a lot of death and severe sickness over the last year in my personal life. I am also a hospice volunteer. Life is short. I save for a rainy day, save for my freedom, but spend our money loving life with both arms and eyes wide open.

 

[crisi]

All I want to do is have enough money to enjoy my retirement. I don't care about accumulating wealth, I care about being able to maintain my current lifestyle in retirement with additional time and money for traveling. So yes, my goal is saving. I max my 401K, max my Roth IRA, and have a 1 year salary in an emergency fund.

I don't know if this is wiser than spending money and enjoying life in the moment, but I don't think I would be comfortable living like that. Debt makes me uncomfortable.

For me, even spending down savings makes me uncomfortable, I have a hard time enjoying myself if I think I might run out of money. So I need to get to the point for retirement that I'm accumulating wealth, that every year I have as much set aside - or more - than the previous year. I won't spend it all before I die, and that's the point. And I do this with a spendthrift husband.

 

[Mrs. Ciz]

I save 15% of my income for retirement (employer puts in an additional 3%)
DH saves 6% of his income for retirement (employer puts in an additional 3%)

5% for kids college

3% for HSA account

Emergency fund - savings rate is inconsistent. When we have it we put it in, when we don't have it we don't put it in. DH is 100% commission.

I need to start a new savings pot for a newer car. My 2002 is getting old and will need to be replaced in the next couple of years.

 

[HeyIt'sMe]

401(k)
Mine - Total contribution is 11% of my income (8% + company match: 3%)
DH - Total contribution is 20% of his income (8% + company match: 3% + company safe harbor: 9%)

Roth IRAs
DH & I both contribute the maximum allowed each year

Savings
Emergency Fund: $500/month (we try not to touch this account and save i
General Fund: $500/month (for car repairs, house repairs, etc)
Vacation Fund: $500/month
Plus, if we have extra funds we'll add them to our savings accounts.

College Savings
We don't contribute to DD's 529 Plan anymore. She starts college this Fall and got a great scholarship at a local college and what we already have in her 529 account should cover anything the scholarship doesn't. It helps that's she'll be living at home and we don't have to pay room & board!

DH & I would like to start investing outside of our retirement accounts so that's the next thing we'll be looking in to.

Debbie

 

[dreamin_disney]

bumping to the top. I'm getting serious about saving for retirement. Trying to learn as much as possible and I love reading how everyone is daving for the future. Is there a threat about tips and advice or success stories on how DIS members have made it? I'm 43 and starting late