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Aside from our 401k's, we're not saving anything at the moment. We have built up a small cushion, and now we're aggressively paying down all the debt we incurred when we were "young and foolish". It should be all paid off early in 2011, and as it goes down we'll be saving what we can.
Aside from our 401k's, we're not saving anything at the moment. We have built up a small cushion, and now we're aggressively paying down all the debt we incurred when we were "young and foolish". It should be all paid off early in 2011, and as it goes down we'll be saving what we can.
Paying off debt can be considered as saving. For example, if you currently pay down a 5-yr 6% loan, then it has the same (or better considering tax implication) effect as investing in a 5-yr 6% CD.
Thanks to all of you for posting. I just like seeing what others are doing. I'm glad to see I'm not the only one living below my means. . . Although sometimes it feels like it
A 15 is preferable if one can afford it, I never could in the early years of my life while saving for college expenses for the munchkins. Saving for the kids's college costs was a fundamental priority and the difference in 15 versus 30 was significant for college account funding. I'm an accountant by trade (retired) and understand the numbers. The 30 year fixed rate term gives one the best cost/benefit position, IMHO. You can always refi if the market changes, which I did many times. My goal was to have my kids educated and launched with no debts and cash in the bank when they graduated, (both with master degrees in their selected field). Too many young folks start life in terrible financial positions and suffer from the debt burden of their education. My view is that if you breed them, you need to assure that they get an appropriate education to give them a fair shot in life without starting out under water financially. JMO.
Last edited by Pilgrim21784; 04-09-2009 at 12:14 AM..
What's really impressive to me are those people who are able to save such a large percentage of their gross income when they don't make a whole lot to begin with. Throw in someone who doesn't make alot, saves alot, and lives in a high cost of living area, and I'm even more impressed.
To answer the OP's question... we're in our prime earning years. I work PT, DH works FT. We save over 50% of our gross income (if by savings you count extra principal payments on mortage and monthly college savings, in addition to 401k and other investments).
My goal is 10% of net income. Unfortunately I'm paying of a bunch of medical bills so I'm lucky if I get near to that. We also just moved (3 weeks ago) and I'm paying a bit more in rent (about $150 more a month, plus increased utility cost) but it's well worth it to be living with less people (in my old place I was living with 4 other people in a 3 bedroom house). Since we've only been there a month or so, I'm in the process of re-doing the budget to compensate for the new living arrangements. Plus, we had to pay money for the trailer/gas to move our stuff, the deposit on the new place, utility hookups etc. which basically got rid of the savings I did have
It's getting easier though.. I did manage to put $800 in my savings over the past month
Let's see, if I was single without kids and had a $300/month mortgage, I could save a large chunck of change every month. However, since that is not the case and we happen to live in an area of the country with high property values/taxes/insurnace rates, we are able to squeak out 10-15% per month.
I'm retired; house, cars, college costs, weddings (have 2 daughters) are all paid off. I'm basically saving 50% of my net income. My expenses are fairly low and I try to keep things simple. I grew up dirt poor and don't like debt or being financially stressed. It is important for younger folks to understand that credit cards and related debt should be used wisely and never incur an obligation you can't pay. Cash in the bank is, in my opinion, a good way to go for most people. The talking heads and financial advisors will disagree, but debt free is my advice. A 30 year fixed rate mortgage is the only debt one should have. JMHO.
People who manage money well are the good advisors. I trust that more than a finance degree. It sounds like you've managed your money well. Thanks for the advice.
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