How much do you save per month?

[Dreamer_D]

We have not been saving anything the last few years beyond the savings we have through our work pensions (which are fairly aggressive IMO). But we are officially "debt free" as of this week** So our hope is to save a little each month from now on. Daycare is a second mortgage worth of money each month, so its hard now.

**Note: I say "debt free" in quotations because we have a mortgage and car payment still. But no other debt!

 

[HollyS]

Well . . . save as in not spending everything one makes???

Or saving in a savings account which gives almost nothing in interest these days, so why bother?

Very little goes in my savings account; it's a worthless and ridiculous place for my money. I have my serious money in IRAs. Where it gets a seriously paltry 3%, which is a high rate these days.

 

[rubybeth]

Well . . . save as in not spending everything one makes???

Or saving in a savings account which gives almost nothing in interest these days, so why bother?

I do put our 'savings' into a money market account, and while it's not a huge rate of return, it's a psychological thing, like what Haven was talking about--if I only leave enough in the checking account to cover the necessities, then that's all we buy. If there's an extra $1k or even $500 in the checking account, we might as well kiss it bye-bye. It's more about setting up the savings plan and following it than it is about a good ROI.

 

[rubybeth]

...and we usually get a decent tax return, plus DH has a retirement account that is automatically contributed to.

I don't want to pick on you, ladypirate, just want to point out that this is something that bugs me a LOT and that you can change: your tax refund is YOUR money that you are getting back, not some kind of gift you're getting each year. I adjust our withholding throughout the year, as needed, in order to avoid getting a tax refund. I can see how this would be more difficult if you have hard-to-estimate taxes like my father does with his business, but most people do not. Ours are a little tricky since my DH gets overtime and bonus pay, which is why I run the calculator every few months to make sure we are on track.

IRS withholding calculator: http://www.irs.gov/individuals/article/0,,id=96196,00.html

I actually helped my sister with this not long ago, since she was taking a standard number of allowances for her contract job, but should barely pay any tax at all because of her deductions for student loan interest, etc. and now her checks are $150 larger, or $600 more per month in her pocket. She may end up owing about $100 for her 2012 taxes, but to me, that makes more sense than getting a $4,000 tax 'refund' of her own money.

 

[mayerling]

Well . . . save as in not spending everything one makes???

Or saving in a savings account which gives almost nothing in interest these days, so why bother?

Very little goes in my savings account; it's a worthless and ridiculous place for my money. I have my serious money in IRAs. Where it gets a seriously paltry 3%, which is a high rate these days.

Yes.

 

[Amys Bling]

Well . . . save as in not spending everything one makes???

Or saving in a savings account which gives almost nothing in interest these days, so why bother?

Very little goes in my savings account; it's a worthless and ridiculous place for my money. I have my serious money in IRAs. Where it gets a seriously paltry 3%, which is a high rate these days.

Seriously, it's terrible.

 

[vc10um]

Well, since you asked about me personally, it's almost nothing right now. But that's because I am paying all our big bills (rent, credit card [on which we charge most of our expenses], my student loans) every month and DH is banking all of his salary (minus our current utilities) in order to save for a down payment on a house! But overall household right now, we're probably saving 50% each month. We'll change that once we actually purchase our house...but this aggressive saving plan has allowed us to save up at least 20% of the expected cost of our future home in just a year.

 

[ladypirate]

...and we usually get a decent tax return, plus DH has a retirement account that is automatically contributed to.

I don't want to pick on you, ladypirate, just want to point out that this is something that bugs me a LOT and that you can change: your tax refund is YOUR money that you are getting back, not some kind of gift you're getting each year. I adjust our withholding throughout the year, as needed, in order to avoid getting a tax refund. I can see how this would be more difficult if you have hard-to-estimate taxes like my father does with his business, but most people do not. Ours are a little tricky since my DH gets overtime and bonus pay, which is why I run the calculator every few months to make sure we are on track.

IRS withholding calculator: http://www.irs.gov/individuals/article/0,,id=96196,00.html

I actually helped my sister with this not long ago, since she was taking a standard number of allowances for her contract job, but should barely pay any tax at all because of her deductions for student loan interest, etc. and now her checks are $150 larger, or $600 more per month in her pocket. She may end up owing about $100 for her 2012 taxes, but to me, that makes more sense than getting a $4,000 tax 'refund' of her own money.

Right--I do understand that it means we've overpaid, but for us it's a nice way to make sure that we're saving throughout the year, if that makes sense. We're not getting the interest on it (not like that would be much with current rates), but it's a good way to encourage us to do that. Also, our taxes have been a little odd the last couple of years what with buying a house, me quitting my job to go back to school then going back to work part time, etc.

 

[Enerchi]

Well, since you asked about me personally, it's almost nothing right now. But that's because I am paying all our big bills (rent, credit card [on which we charge most of our expenses], my student loans) every month and DH is banking all of his salary (minus our current utilities) in order to save for a down payment on a house! But overall household right now, we're probably saving 50% each month. We'll change that once we actually purchase our house...but this aggressive saving plan has allowed us to save up at least 20% of the expected cost of our future home in just a year.

congratulations on that wonderful savings for your house!!! That is aggressive, but it was also very successful! Good one!

 

[vc10um]

...and we usually get a decent tax return, plus DH has a retirement account that is automatically contributed to.

I don't want to pick on you, ladypirate, just want to point out that this is something that bugs me a LOT and that you can change: your tax refund is YOUR money that you are getting back, not some kind of gift you're getting each year. I adjust our withholding throughout the year, as needed, in order to avoid getting a tax refund. I can see how this would be more difficult if you have hard-to-estimate taxes like my father does with his business, but most people do not. Ours are a little tricky since my DH gets overtime and bonus pay, which is why I run the calculator every few months to make sure we are on track.

IRS withholding calculator: http://www.irs.gov/individuals/article/0,,id=96196,00.html

I actually helped my sister with this not long ago, since she was taking a standard number of allowances for her contract job, but should barely pay any tax at all because of her deductions for student loan interest, etc. and now her checks are $150 larger, or $600 more per month in her pocket. She may end up owing about $100 for her 2012 taxes, but to me, that makes more sense than getting a $4,000 tax 'refund' of her own money.

Right--I do understand that it means we've overpaid, but for us it's a nice way to make sure that we're saving throughout the year, if that makes sense. We're not getting the interest on it (not like that would be much with current rates), but it's a good way to encourage us to do that. Also, our taxes have been a little odd the last couple of years what with buying a house, me quitting my job to go back to school then going back to work part time, etc.

LP, you're not alone in this! I know many people who, since savings accounts pay out almost nothing in interest and they are not good savers by any stretch, prefer to pay over on their income taxes so they get that refund check. One of my girlfriends does this and she buys herself something nice with half the money and then puts the other half into her IRA...money she probably wouldn't have set aside in the first place because money burns a hole in her pocket when she has it. While it might not be the BEST way to save money (as you are missing out on a few dollars in interest each year and you don't have that money at hand in case of emergency), it's certainly not a bad idea by any stretch!

Also, thanks, Enerchi! We celebrated hitting our expected 20% mark with a bottle of mid-range champagne. We're still aggressively saving, but that's because we're expecting the move to cost about $5K out of pocket and we've decided that in 2013 we're going on SAFARI.

 

[Enerchi]

Great plan vc10um! A safari - what an adventure!

 

[Clairitek]

I think we save about 30-35% of our take home pay each month.

We are currently doing things the way Haven mentioned-just transferring what isn't spent into savings. But, like her, I think we will save more if I set a specific amount and make sure it is hit each month. When I started working and we moved out to the Bay Area we set a savings goal to hit after 3 years. I think we will hit it but I doubt it will make it into the account at an even rate.

 

[rubybeth]

...and we usually get a decent tax return, plus DH has a retirement account that is automatically contributed to.

I don't want to pick on you, ladypirate, just want to point out that this is something that bugs me a LOT and that you can change: your tax refund is YOUR money that you are getting back, not some kind of gift you're getting each year. I adjust our withholding throughout the year, as needed, in order to avoid getting a tax refund. I can see how this would be more difficult if you have hard-to-estimate taxes like my father does with his business, but most people do not. Ours are a little tricky since my DH gets overtime and bonus pay, which is why I run the calculator every few months to make sure we are on track.

IRS withholding calculator: http://www.irs.gov/individuals/article/0,,id=96196,00.html

I actually helped my sister with this not long ago, since she was taking a standard number of allowances for her contract job, but should barely pay any tax at all because of her deductions for student loan interest, etc. and now her checks are $150 larger, or $600 more per month in her pocket. She may end up owing about $100 for her 2012 taxes, but to me, that makes more sense than getting a $4,000 tax 'refund' of her own money.

Right--I do understand that it means we've overpaid, but for us it's a nice way to make sure that we're saving throughout the year, if that makes sense. We're not getting the interest on it (not like that would be much with current rates), but it's a good way to encourage us to do that. Also, our taxes have been a little odd the last couple of years what with buying a house, me quitting my job to go back to school then going back to work part time, etc.

LP, you're not alone in this! I know many people who, since savings accounts pay out almost nothing in interest and they are not good savers by any stretch, prefer to pay over on their income taxes so they get that refund check. One of my girlfriends does this and she buys herself something nice with half the money and then puts the other half into her IRA...money she probably wouldn't have set aside in the first place because money burns a hole in her pocket when she has it. While it might not be the BEST way to save money (as you are missing out on a few dollars in interest each year and you don't have that money at hand in case of emergency), it's certainly not a bad idea by any stretch!

Also, thanks, Enerchi! We celebrated hitting our expected 20% mark with a bottle of mid-range champagne. We're still aggressively saving, but that's because we're expecting the move to cost about $5K out of pocket and we've decided that in 2013 we're going on SAFARI.

I guess if I were really incapable of saving my own money, I'd set it up to have my paycheck direct deposited to two different accounts, regular checking and savings. Then I'd still have access to that money in an emergency. In the example of the friend who puts half into her IRA, she could be having a portion of her check put into her IRA each paycheck.

 

[vc10um]

...and we usually get a decent tax return, plus DH has a retirement account that is automatically contributed to.

I don't want to pick on you, ladypirate, just want to point out that this is something that bugs me a LOT and that you can change: your tax refund is YOUR money that you are getting back, not some kind of gift you're getting each year. I adjust our withholding throughout the year, as needed, in order to avoid getting a tax refund. I can see how this would be more difficult if you have hard-to-estimate taxes like my father does with his business, but most people do not. Ours are a little tricky since my DH gets overtime and bonus pay, which is why I run the calculator every few months to make sure we are on track.

IRS withholding calculator: http://www.irs.gov/individuals/article/0,,id=96196,00.html

I actually helped my sister with this not long ago, since she was taking a standard number of allowances for her contract job, but should barely pay any tax at all because of her deductions for student loan interest, etc. and now her checks are $150 larger, or $600 more per month in her pocket. She may end up owing about $100 for her 2012 taxes, but to me, that makes more sense than getting a $4,000 tax 'refund' of her own money.

Right--I do understand that it means we've overpaid, but for us it's a nice way to make sure that we're saving throughout the year, if that makes sense. We're not getting the interest on it (not like that would be much with current rates), but it's a good way to encourage us to do that. Also, our taxes have been a little odd the last couple of years what with buying a house, me quitting my job to go back to school then going back to work part time, etc.

LP, you're not alone in this! I know many people who, since savings accounts pay out almost nothing in interest and they are not good savers by any stretch, prefer to pay over on their income taxes so they get that refund check. One of my girlfriends does this and she buys herself something nice with half the money and then puts the other half into her IRA...money she probably wouldn't have set aside in the first place because money burns a hole in her pocket when she has it. While it might not be the BEST way to save money (as you are missing out on a few dollars in interest each year and you don't have that money at hand in case of emergency), it's certainly not a bad idea by any stretch!

Also, thanks, Enerchi! We celebrated hitting our expected 20% mark with a bottle of mid-range champagne. We're still aggressively saving, but that's because we're expecting the move to cost about $5K out of pocket and we've decided that in 2013 we're going on SAFARI.

I guess if I were really incapable of saving my own money, I'd set it up to have my paycheck direct deposited to two different accounts, regular checking and savings. Then I'd still have access to that money in an emergency. In the example of the friend who puts half into her IRA, she could be having a portion of her check put into her IRA each paycheck.

RB, said friend's primary job is as a waitress, so what she receives in her check (wages and credit card tips) is quite paltry, especially after taxes, compared to what she receives in cash tips. Furthermore, she receives a highly irregular amount of money in each check due to the variable nature of her tips and hours. It would be near impossible for her to set up a comprehensive direct deposit scheme like you've described. So while I'm SURE she would appreciate your advice, please kindly remember that nothing, ESPECIALLY when it comes to finances, is one size fits all, and what MAY work for you MAY NOT work for others.