How Much Do you Save in a Month?

[JustDave]

We're at 24% of gross, but that should soon be up to 30%. That includes retirement savings as well as the larger bills for which we budget every month (house and car repairs, oil bill, vet bills, increasing the EF, etc.)

The trick is the same as others have said: make it part of your monthly budget and you don't even think about it. Ours is automatically withdrawn every month, so it's treated the same as any other monthly bill. We've also learned to do without things. I think knowing you can afford something but choosing not to buy it helps the withdrawal symptoms for a while.

It doesn't happen automatically - it wasn't until we sat down and did a hard budget that we were able to get serious about saving. The idea of "We are going to save X every month" only worked when X became a hard number. When X was "whatever is left at the end of the month" ... well, I think you can guess how that worked out. I only wish we had done it sooner!

[kork13]

I don't buy that 5% savings rate. Last year a forum member (DisneySteve I think) alerted me to the fact that they don't include 401k contributions if I am remembering correctly.

Valid point. I think they actually don't include ANY sort of investments, whether in taxable or non-taxable accounts. I believe it's strictly based off of deposit accounts (checking/savings).

[disneysteve]

Side note, but seeing all these responses almost makes me wonder how the national savings rate is only around 5% (which is far above what it was 2 years ago)... But then, I also have to remember that most of the people on the boards here are an aberration to the majority of Americans, so.... yea... ::sigh:: it's a shame....

I don't buy that 5% savings rate. Last year a forum member (DisneySteve I think) alerted me to the fact that they don't include 401k contributions if I am remembering correctly.

Still doesn't mean we aren't oddballs though.

Yep. That was me. The "national savings rate" does not include retirement plan contributions. So if you put 20% of income into a 401k and save nothing else, you would be counted as having a 0% savings rate. I think Roths do count since they are funded from after-tax, disposable income.

It also doesn't include home equity, so if you are sending in an extra couple of hundred dollars each month to your mortgage payment, that doesn't count as savings either.

[swanson719]

We save 34% of our net each month living on one income. We could up that by a few hundred if we had to, but I don't find it necessary. There is a balance between living frugal enough to retire young enough to still be able to enjoy retirement and actually enjoying life enough to make it worth living. That extra few hundred a month makes life enjoyable to DW and I. To that end, we are willing to spend a little more now.

[fruitbowlk]

I know how much I save monthly but I don't know the percentage.

[disneysteve]

I know how much I save monthly but I don't know the percentage.

Why not?

The % is important since most advice is to save 15% for retirement and 5% for other needs. If you don't look in terms of %, it is hard to know if you are saving adequately.

[fruitbowlk]

Why not?

The % is important since most advice is to save 15% for retirement and 5% for other needs. If you don't look in terms of %, it is hard to know if you are saving adequately.

I think because I'm not good at math. I know it might come easy to some people but not for me. I will try and figure out the percentage. I would like to know it.

[KTP]

If you discount the past couple months which we went overboard (see my other thread lamenting the fact) we save about 40% of gross counting maxed 401K, rollover roth, and extra toward house payment. No other debt but house, and probably stupid to pay extra on it, but...

Edit, wait that is not right. It is more like 50% of gross if you count the $16,500 401K. Damn, that is pretty good! :-)

[sandrark]

I save 20% of my gross.

Combined with DH, we save ~ 14% of our gross income, including retirement savings.

Sandi

ETA: With the mortgage pre-payment we're doing, it's 15% of our gross income.

[disneysteve]

I think because I'm not good at math. I know it might come easy to some people but not for me. I will try and figure out the percentage. I would like to know it.

Very simple to calculate.

Amount being saved each month divided by total amount earned each month times 100 equals percentage saved.

Example:

Amount saved each month: $800
Amount earned each month: $4,000

$800 ÷ $4,000 = 0.2 x 100 = 20%

[fruitbowlk]

Very simple to calculate.

Amount being saved each month divided by total amount earned each month times 100 equals percentage saved.

Example:

Amount saved each month: $800
Amount earned each month: $4,000

$800 ÷ $4,000 = 0.2 x 100 = 20%

Thanks.

[skruggie]

Why not?

The % is important since most advice is to save 15% for retirement and 5% for other needs. If you don't look in terms of %, it is hard to know if you are saving adequately.

Wow, I just did the math. Starting in February with my new budget I am saving about 35% in liquid savings and investments and 10% in my 401k .

Before that it was about 20% in savings and 10% to my 401k (and fully funding my Roth, I'm not sure what that does to my percentages since I was using my bonus money for the Roth at the start of the year).

My goal this year is to max out my 401k and my Roth, once my liquid savings is fully funded at 6 months expenses - I'm very very close to that liquid savings goal and will be able to start being much more aggressive towards my retirement funds in the next couple of months.

For the first time in my life I'm starting to feel like I'm on a path to financial security.

[LivingAlmostLarge]

30% I think if I'm not mistaken.

[Mike75]

There are some big savers here. I have a car and house mortgage. So after paying off those every month, I get to save around $500 per month. Not big, but once I pay of the car, I will get an extra $450 per month too.

[LivingAlmostLarge]

We're not talking actual numbers. You should ask the question "how much $ do you save a month, not percentages". Thus you'd be able to figure out if $500 is good or not.

It's really dependent on how much you make. 30% sounds good but it could be less than $500/month.