Your income

[sv2007]

Just curious, how much is everyone's income anyway?

I' m hearing cmoplains about saving $2k/month w/ reference to the average US household income. So do you all make $50k/yr? Should we tailor financial projections and assumptions to the lowest common denominator?

[disneysteve]

Should we tailor financial projections and assumptions to the lowest common denominator?

I don't think they need to be tailored to the lowest common denominator but I do think it is far more useful to speak in percentages rather than absolute dollar amounts.

Someone earning 50K isn't going to be able to save 2K/month. For someone earning 250K, 2K/month isn't really enough. But if instead we say you should save 15% of gross income, that works for everyone regardless of how much they earn.

The problem is when you throw out specific numbers rather than percentages.

[HundredK]

I prefer to think of budgeting in terms of percentage of net income rather than gross income. The tax burden for everyone can be wildly different.

[Jluke]

my actual take home pay is probably 50-55% of my gross income.

why?
Taxes
maxing 401k
Healthcare

This really bothers me.

[MonkeyMama]

I have no idea why someone making $50k would not be able to save $2k/month.

I am not a fan of arbitrary rules on what we should or should not post. The $2k/month thing is relevant to someone.

[Jluke]

I have no idea why someone making $50k would not be able to save $2k/month.

do you include 401k as savings?

otherwise, 2k x 12 months = 24000/year.

50k gross: That leaves 26k gross (then minus tax, insurance, etc) for life's expenses.

Is that doable?

[MonkeyMama]

do you include 401k as savings?

otherwise, 2k x 12 months = 24000/year.

50k gross: That leaves 26k gross (then minus tax, insurance, etc) for life's expenses.

Is that doable?

I have no idea why that would not be doable. I imagine most Americans wouldn't want to save that much, but this is hardly in the realm of impossible.

[disneysteve]

I have no idea why someone making $50k would not be able to save $2k/month.

Do you really think it is realistic for people to save 48% of gross income? I think that's pretty extreme by any measure.

[MonkeyMama]

I have many family and friends who have done very well by saving a large percentage of their income for a period of their life. I personally think if we say that this is impossible and should not be discussed, that the bar is being set pretty low as to wealth building. It's kind of the key as to what most every wealthy person I know has done.

I am not going to participate in a conversation about how this is so impossible and out there. I think I just have to leave it at that. (Plus, so far it looks like every SA member has $50k+ income, so there is also that. So far no one here would have to only live on $26k if they followed the $2k/month savings plan).

[disneysteve]

I personally think if we say that this is impossible and should not be discussed, that the bar is being set pretty low as to wealth building

I certainly think it is possible and I absolutely wouldn't say it shouldn't be discussed here. I think all topics are fair game.

I just think talking in percentages instead of dollar amounts is more meaningful to a broader range of readers.

[HundredK]

Well, I earn plenty of money and i can't save $2k for month because all available dollars go toward paying down debt created by past mistakes. I think the point here is that it's more helpful to people when savings advice is tailored to their particular situation. Everyone is different with their own challenges. And anyone brave enough to ask for help here is probably looking for a tailored piece of advice, and not just a blanket "save $2k a month" bit of input.

[disneysteve]

So far no one here would have to only live on $26k if they followed the $2k/month savings plan).

True, but the poll so far also shows 1/3 of people earn more than 200K. They shouldn't be following the "2K/month savings plan" because it isn't enough.

Just throwing out a number is not very useful if it has no context. That's why percentages are better. 20% is 20% whether you earn 50K, 100K, or 250K.

[Singuy]

What is interesting about the polls is that no one here currently makes less than 50k, which is a good 45%+ of the American public. Some may even wonder if a bunch of people making over the average median income is fit to counsel people on budgeting since relatability can be a concern to readers.

[disneysteve]

What is interesting about the polls is that no one here currently makes less than 50k, which is a good 45%+ of the American public. Some may even wonder if a bunch of people making over the average median income is fit to counsel people on budgeting since relatability can be a concern to readers.

I'm sure there are plenty of people here who have earned less in the past. Surely there are plenty here who struggle with budgeting issues regardless of income. I think much of the general advice shared here applies to everyone no matter how much they earn.

[Singuy]

I'm sure there are plenty of people here who have earned less in the past. Surely there are plenty here who struggle with budgeting issues regardless of income. I think much of the general advice shared here applies to everyone no matter how much they earn.

Developing good budgeting skills(especially in a culture that praises spending) is like going on a disgusting diet to lose weight. I'm just afraid people see a bunch of naturally lean people telling people how this disgusting diet is the only way they can lose weight.

Just saying..the excuses for NOT being able to save money is strong. When you make 1.5-2x more than the debt ridden individual looking for advice, it's hard for them to take what you are saying seriously because you are not in their shoes.