How much are you now saving?

[Phoenix]

I notice on our visit to the US this time (specifically, in Chicago and California) that the shops and restaurants are definitely less crowded than before (when I visited some 4-5yrs ago). The shop assistants seem to be more much eager to serve you; and I gather from talking to DH's siblings that the US economy (despite what the Dow Jones says) is still mired in a de facto recession, or at least not yet fully recovered.

Contrast this to the economies of Singapore, Hong Kong or even China (yes, China, despite the large rich-poor gap). Shops are packed most of the time. Restaurants are busy. Real estate prices are shooting through the roof.

Being in the US this time has really reinforced my belief that apparent good times in Asia are just that, apparent and not real. DH and I are now stepping up our efforts to save more, put more towards our mortgage (with the intention of paying it off within the next 10-15 years), spending less on discretionaries (sp?) inclg even bling (yes, bling

) etc. Our plan is to save 25% of our take-home pay (ie. after tax), 25% on rent/ mortgage, with the remaining 50% allocated towards general things like necessities (food, utilities, transportation etc), discretionary spending (going out, holiday), but hopefully we'lll still have approx 20-30% left from that general budget at the end of the day to put towards paying off / reducing our mortgage principal).

So what proportion of your take-home pay are you saving? Let's assume that your take-home pay is only after tax (though I know that in the US, take-home is usually also after contributions towards pension schemes such as IRA etc; but for this purpose let's just assume that your-take home pay is after tax only, and "savings" include contributions towards such pension schemes. I'd really like to know if DH and I are doing enough for our future, compared to other people. Are you saving more now compared to before the recession? Are you more wary of the need to save more, to have an adequate emergency fund and putting more into your pension plan(s)? Are you hoping to pay off your mortgage within a certain timeframe and if so, what kind of timeframe?

I also heard on TV that more and more Americans are downsizing their homes or at least are having more realistic expectations of what their "dream house" should be like. So instead of having a home of some 5-6 bedroom of 4-500 sq ft, more and more folks are looking at 3-bed 2-3000 sq ft. Are you guys having to adjust your expectations too?

Oh, incidentally, I am planning to go back to work soon and practically all of my take-home income will be put into our savings. So, this would increase our savings rate quite considerably, though I don't know what it'd be yet, as it'd depend on my salary amount. We may also even sell our current house in Singapore and downsize to a condo.

 

[Dancing Fire]

what saving??? lost my BUTT in the stock market.

 

[Mrs Mitchell]

Well, I gave up my job to go back to school, so I''m saving nothing at all. In fact, I''m living on my savings. I had a few years worth of salary put away before I resigned, but it''s scary to see how fast it''s dwindling - big dental work bills, roof repairs, and having a baby have put a huge dent in that money.

I''m not a particularly frugal or thrifty person, but when I get back to work, I will try very hard to save as much as I can to get a bit of a safety net back again. We did pay off our mortgage as a priority, but with hindsight, maybe we could have done more with that money to get a return on it. Do you have a financial advisor? I just took a course in financial services as part of my degree and while I hated it (bored to tears) I did learn a lot of things that were almost counter-intuitive but very effective when it comes to managing personal funds. Maybe worth talking to a professional?

 

[that_someone_special]

Someone started a similar thread to this not that long ago and I THINK my answer was close to 0. After that thread, I re-did our budget and have been trying soooo hard not to buy everything that I want (not need) so we can put money in savings. While I have things to do with that money (yay.. house stuff), I feel like I am now actually capable of saving!! So I''m still working on that. I think my goal is about 15% of FI take home pay.

Saving is really hard for me to do. My mom always said that money burns a hole in my pocket.

 

[NOYFB]

We put approximately 17% of our take-home pay into a money market account.

 

[rhbgirl24]

I would say, right now we put about 15% into savings. And yes that number has gone up since the decline of the economy. I feel much safer putting money away than not, especially right now.

 

[radiantquest]

I work on commission/bonus so I do not have a percent that I save. I have my account set up that every other Monday a certain amount is transfered into a savings account. If I do well that month then I transfer more. I can tell you that I contributed to my 401K at my job before the recession, but really didnt save. Once I lost all the money in my 401K due to the economy I am more apt to save now. I had the mindset when times were good that I could always make more money, and I was younger and more immature not thinking as much about my future. I am now married and want to have a house and pay down student loans and all that. Saving has become very important to me. That said I will still buy stuff that I do not need, I just wont splurge on a $300 shopping day. I now shop at Burlington Coat Factory and Ross to keep clothes and shoes down on cost and I will treat myself to one or two things per week that are inexpensive.

 

[PumpkinPie]

a 3 bedroom house that''s 2500 or 30000 square feet is enormous! I hope that''s not the average person''s plan. Here in Alberta that would cost on average between 650,000-850,000$! I don''t know many people who can float that type of mortgage

My husband and I currently save about 60% of our take-home income in an average month.
This month it will be a tiny bit less because we just booked flights for a summer vacation to visit my parents!

 

[PumpkinPie]

oh and our percent has increased a bit lately but not because of the economy - when we first got married in July 2008, we drew up some specific financial plans (a 3 year plan) in terms of the amount of money we would like to have saved in cash.

Our deadline is next summer but we are almost definitely going to make the deadline well before this Christmas- thanks to me no longer being a student/working part-time, but getting my first grown up job (starting salary almost equal to what my husband makes after 12 years in his field - I guess my many years of university paid off a bit..

 

[PumpkinPie]

Date: 4/9/2010 10:13:04 AM
Author: Maevie
a 3 bedroom house that''s 2500 or 30000 square feet is enormous! I hope that''s not the average person''s plan. Here in Alberta that would cost on average between 650,000-850,000$! I don''t know many people who can float that type of mortgage

I hope this didn''t sound nasty - the real estate market in Alberta just really frustrates me!

My parents live in a 5 bedroom, 3300 square foot house on the east coast of Canada on a 3/4 acre lot, and their house is valued at 100,000$ less than the house my husband and I live in here (a 3 bedroom, 1500 square foot house on a tiny lot).

 

[janinegirly]

I'd say we save about 30-40% of take home (if we combine), but we are aggressive savers. It's hard to gauge precisely as we have a large house project that is underway right now.

It's difficult to save significantly around here (NYC area) due to high property taxes and cost of living in general. This is why I get annoyed with tax brackets--they should adjust them for the cost of living of where you are!

 

[purselover]

Right now with DH in school hardly anything. Once he''s done and working though we plan to put about 20% of our take home plus any bonus he receives into paying off student loans, this will enable us to pay everything off in under 4 years. After loans are paid off we will put my entire salary into savings as well as any bonus he receives. My salary will make up about 20% of our total take home and his bonus could make up another 20% on top of that. We also plan to start contributing the maximum amount to my 401K next year when he graduates.

 

[NewEnglandLady]

We currently save over half of our take-home pay, which has been our goal over the past several years. Our rent is only 7% of our take-home pay, which allows us to save. After we buy a house, we will likely save only 25 - 30% of our take-home pay.

 

[winelover23]

The whole housing thing just irks me off. Who needs a 4,000 square foot house unless they''re the Dugar Family? Who needs a formal dining and a formal living? If everyone started buying only what they NEED we''d be far better off economically. Our house is just under 1,700 square feet and we still have a lot of space we don''t necessarily NEED. Thanks to the real estate market going T/U we just recently purchased our home for about 80k less than what it was listed for a year ago. We currently save about $800 per month but we''re also paying for our wedding ourselves (September) so hopefully after that is over we''ll save more. We like to have 9 months salary in savings, I watch too much Suzy Orman

 

[missy]

We are saving about 25% of our pretax dollars which is pretty good considering we have 2 mortgages and lots of other expenses related to maintaining 2 homes.

 

[dragonfly411]

I usually start by putting 10% of my check away. If I save at the grocery store, I put the amount I saved into savings. I also get a reward back for using my debit card... and put that away.

 

[missy]

Date: 4/9/2010 10:54:08 AM
Author: winelover23
The whole housing thing just irks me off. Who needs a 4,000 square foot house unless they''re the Dugar Family? Who needs a formal dining and a formal living? If everyone started buying only what they NEED we''d be far better off economically. Our house is just under 1,700 square feet and we still have a lot of space we don''t necessarily NEED. Thanks to the real estate market going T/U we just recently purchased our home for about 80k less than what it was listed for a year ago. We currently save about $800 per month but we''re also paying for our wedding ourselves (September) so hopefully after that is over we''ll save more. We like to have 9 months salary in savings, I watch too much Suzy Orman

My dad always told us you want just enough space where you live in every room. That makes good sense to us!!

We have about 18 months of living expenses in savings because last year was such a tough one and so unpredictable re our jobs. My dh was changing careers and we were taking a bit cut in salaries so we just started putting everything we could into savings (as most everyone was doing at that time) for a just in case scenario. We are still maintaining that generous cushion just to be on the safe side as uncertainty about the job market is still high.

 

[winelover23]

Date: 4/9/2010 11:07:15 AM
Author: missy

Date: 4/9/2010 10:54:08 AM
Author: winelover23
The whole housing thing just irks me off. Who needs a 4,000 square foot house unless they''re the Dugar Family? Who needs a formal dining and a formal living? If everyone started buying only what they NEED we''d be far better off economically. Our house is just under 1,700 square feet and we still have a lot of space we don''t necessarily NEED. Thanks to the real estate market going T/U we just recently purchased our home for about 80k less than what it was listed for a year ago. We currently save about $800 per month but we''re also paying for our wedding ourselves (September) so hopefully after that is over we''ll save more. We like to have 9 months salary in savings, I watch too much Suzy Orman

My dad always told us you want just enough space where you live in every room. That makes good sense to us!!

We have about 18 months of living expenses in savings because last year was such a tough one and so unpredictable re our jobs. My dh was changing careers and we were taking a bit cut in salaries so we just started putting everything we could into savings (as most everyone was doing at that time) for a just in case scenario. We are still maintaining that generous cushion just to be on the safe side as uncertainty about the job market is still high.

Too funny, I also got my philosophy on living space from MY Dad! Gotta love Dad''s!

 

[lilyfoot]

Currently we are in the 10% - 15% range.

However, in a few months, we are moving in with my future IL''s in order to maximize our saving ability (to buy a house

). We should be at a 25% - 30%+ range then.

 

[packrat]

Zero into savings accounts. He has some that comes out of his check for his 401K or whatever at work but I can''t recall how much it is. Whatever percentage the company matches, and then whatever percentage the company matches 1/2. I have a wee bit in an annuity from a job before we got married and a little in one at my current job. When we''re older we could cash in our life insurance I guess. Every time we get the slightest bit ahead, something happens-car breaks down, something breaks in the house.

 

[zoebartlett]

This thread is depressing me. We don''t put as much into savings as we''d like. I totally agree with Packrat -- every time we put what we think is a healthy amount away, something happens and we need it.

Part of the problem is that we own a condo that we''re renting out. Our tenant is good overall, but she''s pretty high maintainance. She may want to buy our condo someday, so we''re trying to be as accommoding as possible. When she first moved in, she wanted to do a lot to the place. We decided to allow her to get the work done and we''d split the cost. That''s fine, I know it will pay off eventually if she does buy our condo, but it''s such a pain to shell out $ for something that we''re not even living in anymore. A lot of it is tax deductiable, which is good, but it''s just a PITA to deal with.

 

[RaiKai]

Sadly, right now I am not saving any of it.

I am currently the sole income provider in the house, as DH is back in school, and almost ALL of my salary goes to fixed expenses and debt repayment (large student loans for the most part). I am not making a significant salary right now so early into my second..or third?...career so it is pretty tight! There really is no flexibility at all right now. My luxury is my daily Tim Horton's coffee....I had some pension savings and retirement savings, however, cashed them in to help pay for my return to school.

It is a bit strange, as we are both in our thirties, I am a former financial adviser who used to help people save, and we each previously owned our own homes (not with each other...this was before we met) but many life changes including previous separations from common-law partners, DH leaving the military, me going back to get my law degree, moves, and so forth since then have us back to renting (a basement apartment yet - a lovely one but still!). We are very happy with our current lifestyle, however, it would be nice to have some extra cash and not have such a tight budget.

However, we do have a healthy retirement savings account that DH received when he took his early retirement from the military. It is locked in until we hit 65 but it is a comfort knowing it is there and that it is alright if there are a few years yet before I can start saving away money again. It is in stocks and other investments right now but we have a good many years before we will be taking any of it. DH also has a small cushion of registered retirement savings plans to use for tuition if need be or living expenses if things get tight.

 

[NewEnglandLady]

What we did a long time ago was set up an emergency fund with 6 months worth of our expenses. That account is definitely not considered "savings". Savings has a goal--travel, a house, future vehicles, kids' college funds, etc. When something pops up (and several things have recently), it comes out of our emergency fund. Then we refill our emergency fund before going back to savings. I absolutely love having our accounts set up like this because when something does come up, we don't lose our momentum to save. I would highly recommend having an emergency fund first, that way it doesn't feel like the wind has been taken out of your sails when something pops up.

ETA: Zoe, if I were you I'd sell your condo here in NE in a flash (so long as you don't owe more than it's worth). Think of it like this: if you didn't alread own your condo, would you buy one up here? You still have to pay the taxes, you still have to make repairs if something goes wrong. In my mind I would see it more of a risk than an asset. And I think it would make you feel relieved to sell it. If you do owe more than it's worth, then nevermind!

 

[RaiKai]

Date: 4/9/2010 10:13:04 AM
Author: Maevie
a 3 bedroom house that''s 2500 or 30000 square feet is enormous! I hope that''s not the average person''s plan. Here in Alberta that would cost on average between 650,000-850,000$! I don''t know many people who can float that type of mortgage


My husband and I currently save about 60% of our take-home income in an average month.

This month it will be a tiny bit less because we just booked flights for a summer vacation to visit my parents!

I did not know you lived in Alberta! Us too. I am however a fairly recent transplant (lived in Winnipeg where the cost of living is super affordable compared to here!). DH is originally from Alberta, up near Edmonton, but he has lived out of province for many years due to work (postings on the West Coast, the East Coast, and all in the middle). We moved here just last year - down South - and absolutely love it. But the cost of living IS higher for sure!

 

[RaiKai]

Date: 4/9/2010 10:54:08 AM
Author: winelover23
The whole housing thing just irks me off. Who needs a 4,000 square foot house unless they're the Dugar Family? Who needs a formal dining and a formal living? If everyone started buying only what they NEED we'd be far better off economically. Our house is just under 1,700 square feet and we still have a lot of space we don't necessarily NEED. Thanks to the real estate market going T/U we just recently purchased our home for about 80k less than what it was listed for a year ago. We currently save about $800 per month but we're also paying for our wedding ourselves (September) so hopefully after that is over we'll save more. We like to have 9 months salary in savings, I watch too much Suzy Orman

It's all about keeping up with the Jones'....this can be worse depending where you live.

I don't get it either. DH and I are former home owners living in a small basement apartment (see post above for reasons why....) and find it is more than enough! One of the first homes I lived in growing up (a 900sq ft house with 2 adults, 4 kids...we later moved to an 1800sq ft one). My mother growing up lived in a smaller house than that first one with her 5 siblings and 2 parents and however many dogs or cats.

I do like a nice comfortable home...but that for me does not mean I need a whole lot of unused space. However, I also like to do a lot of stuff outside the home - for total home bodies sometimes more space is liked.

However, I know people who have a constant "chasing the dream" mentality even if that dream is not comfortably affordable. That is what got so many people into all the trouble with the sub-prime mortgage lenders in the first place! Through my work, I see foreclosures all the time on people who went house-poor when they realized housing costs more than the mortgage payment, or the interest rates went up.

I do know some people in DHs family who are constantly trying to one-up someone else with "stuff"....buying a new car every year as the other one is just not "safe" anymore for the kids (they just want a new car, nothing to do with safety!), or wanting a bigger house even the other one is only a couple years old and they only have one or two kids....one woman I know is just ridiculous as she constantly expects more stuff and her husband to work harder to afford it (she is a SAHM) and does not get why he can't just "make more money" so she can get a new travel trailer (she has one already that is about 2 yrs old)! We are grateful we live far away from them and don't get caught up in the drama!

I know a couple who lived in an 1800 sq ft home and when they had their new baby they decided two weeks later they no longer had "room" and had a house built double that size. I mean they had healthy incomes, but it still made no sense to me. It was not the baby taking up the space, it was the overkill on baby *stuff* that was! It would have made more sense to get rid of some of the stuff!

My SIL and her boyfriend recently had a new baby. They live in a condo (good sized - about 1000 sq ft) and her mortgage is something like $400,000. She is on mat leave for a few months and he is not making a whole lot so there has been a MASSIVE take-home income cut for the time being. When her boyfriends aunt came to see the new baby while DH and I were there she immediately started harping on how "this is just not enough room for the baby", "it just won't do", "you need a bigger space", "where will the playpen fit?". I was aghast! To buy a "bigger place" in Calgary would cost them significantly more...and they have a limited income right now! She does not live in Calgary, but I still thought it was totally clueless and tactless. Way to add the pressure to these new parents who did not exactly plan to be in this situation and are trying the best they can!

One of my favourite shows is "Til Debt Do Us Part" as the host takes a harsh line on this sort of mentality (that seems to be, as I said, common).

 

[missy]

Date: 4/9/2010 11:15:29 AM
Author: winelover23

Date: 4/9/2010 11:07:15 AM

Author: missy

Date: 4/9/2010 10:54:08 AM

Author: winelover23

The whole housing thing just irks me off. Who needs a 4,000 square foot house unless they're the Dugar Family? Who needs a formal dining and a formal living? If everyone started buying only what they NEED we'd be far better off economically. Our house is just under 1,700 square feet and we still have a lot of space we don't necessarily NEED. Thanks to the real estate market going T/U we just recently purchased our home for about 80k less than what it was listed for a year ago. We currently save about $800 per month but we're also paying for our wedding ourselves (September) so hopefully after that is over we'll save more. We like to have 9 months salary in savings, I watch too much Suzy Orman

My dad always told us you want just enough space where you live in every room. That makes good sense to us!!


We have about 18 months of living expenses in savings because last year was such a tough one and so unpredictable re our jobs. My dh was changing careers and we were taking a bit cut in salaries so we just started putting everything we could into savings (as most everyone was doing at that time) for a just in case scenario. We are still maintaining that generous cushion just to be on the safe side as uncertainty about the job market is still high.

Too funny, I also got my philosophy on living space from MY Dad! Gotta love Dad's!

Most definitely we love our dads!! Many of my life philosophies come from him and I find myself quoting his "dad wisdoms" quite often...my dh loves to joke about this LOL but he is just like my dad in many ways! My dad and my dh are two of the wisest people I know...

 

[Dreamer_D]

Date: 4/9/2010 10:22:15 AM
Author: Maevie

Date: 4/9/2010 10:13:04 AM
Author: Maevie
a 3 bedroom house that''s 2500 or 30000 square feet is enormous! I hope that''s not the average person''s plan. Here in Alberta that would cost on average between 650,000-850,000$! I don''t know many people who can float that type of mortgage

I hope this didn''t sound nasty - the real estate market in Alberta just really frustrates me!

My parents live in a 5 bedroom, 3300 square foot house on the east coast of Canada on a 3/4 acre lot, and their house is valued at 100,000$ less than the house my husband and I live in here (a 3 bedroom, 1500 square foot house on a tiny lot).

Try coming to the west coast of BC

 

[zoebartlett]

Date: 4/9/2010 12:16:12 PM
Author: NewEnglandLady
What we did a long time ago was set up an emergency fund with 6 months worth of our expenses. That account is definitely not considered ''savings''. Savings has a goal--travel, a house, future vehicles, kids'' college funds, etc. When something pops up (and several things have recently), it comes out of our emergency fund. Then we refill our emergency fund before going back to savings. I absolutely love having our accounts set up like this because when something does come up, we don''t lose our momentum to save. I would highly recommend having an emergency fund first, that way it doesn''t feel like the wind has been taken out of your sails when something pops up.

ETA: Zoe, if I were you I''d sell your condo here in NE in a flash (so long as you don''t owe more than it''s worth). Think of it like this: if you didn''t alread own your condo, would you buy one up here? You still have to pay the taxes, you still have to make repairs if something goes wrong. In my mind I would see it more of a risk than an asset. And I think it would make you feel relieved to sell it. If you do owe more than it''s worth, then nevermind!

Thanks for the tips NEL! We tried to sell it before we moved but we couldn''t. We also owe way more than it''s worth. We haven''t gotten the condo appraised in a while, and it''s something we''re considering doing over the summer. To make it worse, we couldn''t even rent it out for what we believed to be a fair amount. So now we''re paying basically a third of our monthly mortgage payment to make up the difference between what we owe each month and what rent it out for. That''s on top of the rent we pay down here for the condo we do live in. Oh yeah, and we pay a property management company to collect the rent and deal with the tenant. Believe me, I''d love to get rid of it!

 

[NewEnglandLady]

Aww, Zoe, I''m so sorry

I know you''ve posted about your condo before, I just forgot that you owed more than it''s worth. At the very least you have a great tenant...and if she wants to buy it in the future, that would be fabulous!

 

[zoebartlett]

Thanks again NEL! We could definitely be in much worse shape, and I guess I need to look on the bright side of things more often. You''re right, thanks to the work she did, she now lives in an even more fabulous place, and she may even buy it someday. Yay!