Poll on Savings

[crownjules]

Just a curiosity. I've recently become very consciencious about saving my income. When I was in college, I was very bad about managing my money and ended up with some CC debt. Nothing very serious in comparison to other horror stories, but bad enough that I probably paid 3-4 times what I had originally bought over the course of a year or so to pay it off. Since then, I've set up many rules to ensure that I'm properly saving and putting money into investments for the future. All this at 24 years of age.

1) I automatically save 20% of every paycheck which goes to ING Direct.
2) At the end of every month, I'll transfer all but $1000 from my checking into ING Direct.

I've read enough articles that state the average American family does not save nearly enough. Are you in that boat?

 

[JS80]

whatever is left after food and rent i save.

 

[FoBoT]

its either 4 or 6% that my employer matches in my 401(k), so depending on how you look at it, i save somewhere between 4 and 12% of my annual income

sort of

 

[pontifex]

not enough as i should be saving - i guess

 

[Descartes]

80-90%, usually.

 

[BlueWeasel]

Prior to my wife losing her job about 6 weeks ago, we were saving 17-20% into either our 401k accounts (those % don't reflect company matching) or into a savings account. We're not able to save much with just my income, but we don't need to touch our savings or use credit cards.

We'll go back up to 20-25% once she finds another job.

 

[Rudee]

50% goes into investments after bills, mortgage etc are paid on a monthly basis.

 

[lozina]

I try to invest instead of saving because the way it is now I think inflation will pwn your savings. the current inflation rate is something like 3.5% this is not very accurate though because it does not consider gas prices and food prices, so it should actually be a little higher.

Then on top of that, whatever interest you do manage to gain which was supposed to combat inflation gets taxed as an income, so for me thats like somewhere 25%. So in the end, I think I'm losing money by keeping it even in a "high yield" savings like ING or HSBC online savings accounts.

So, I dont save, all my extra money is invested. No current debt (usually wiser to attack your debts instead of saving money too)

 

[Armitage]

Originally posted by: lozina
I try to invest instead of saving because the way it is now I think inflation will pwn your savings. the current inflation rate is something like 3.5% this is not very accurate though because it does not consider gas prices and food prices, so it should actually be a little higher.

Then on top of that, whatever interest you do manage to gain which was supposed to combat inflation gets taxed as an income, so for me thats like somewhere 25%. So in the end, I think I'm losing money by keeping it even in a "high yield" savings like ING or HSBC online savings accounts.

So, I dont save, all my extra money is invested. No current debt (usually wiser to attack your debts instead of saving money too)

Uhm - I think most people consider that savings. Savings is money that you put away for the future and don't spend immedietly. Doesn't neccesarily mean it sits in a traditional "savings" account.

Anyway, mine is about 7.5% of my gross income - most of it goes into mutual funds and CDs. That'll about double when the kids are out of daycare. Company contributes another 8% into a retirement plan

 

[IGBT]

Originally posted by: crownjules
Just a curiosity. I've recently become very consciencious about saving my income. When I was in college, I was very bad about managing my money and ended up with some CC debt. Nothing very serious in comparison to other horror stories, but bad enough that I probably paid 3-4 times what I had originally bought over the course of a year or so to pay it off. Since then, I've set up many rules to ensure that I'm properly saving and putting money into investments for the future. All this at 24 years of age.

1) I automatically save 20% of every paycheck which goes to ING Direct.
2) At the end of every month, I'll transfer all but $1000 from my checking into ING Direct.

I've read enough articles that state the average American family does not save nearly enough. Are you in that boat?

..fully funded in a 401/457. it's money I would loose in taxes anyway so I'm saving a pyle.. because it comes off before taxes and reduces my tax load. and sets me up with another pyle when I retire.

 

[Gunslinger08]

401k seems pretty dumb to me. I really don't plan to be working until I'm 60 (or older). Yes, it's taken out pre-tax, but it's not money you'll see for 20 to 40 years (for most of us). I'd much rather have the money (after taxes) in something more liquid and accessible, like my own mutual fund/stock blend.

 

[Jikininki]

hmm...I make about $900 every two weeks and I try to save most of it. My paycheck is direct deposited into one checking account..and once a month I take about 800 dollars from that account and transfer it to my other checking account that I use for bill payments and general spending. This way I know that I definitely have money in at least one checking account saved, and it'll keep me from overspending.

Since I've just started working..I don't know how effective this plan of mine will be. But I have hopes that as long as I don't spend money like it grows on trees I should be good.

 

[GeneValgene]

Originally posted by: joshsquall
401k seems pretty dumb to me. I really don't plan to be working until I'm 60 (or older). Yes, it's taken out pre-tax, but it's not money you'll see for 20 to 40 years (for most of us). I'd much rather have the money (after taxes) in something more liquid and accessible, like my own mutual fund/stock blend.

it is not dumb...but it is dumb if you rely solely on your 401K for retirement. definitely need to diversify your retirement wealth...maybe even a good idea to look into real estate

 

[NissanGurl]

Well, there is a 401(r) program I signed up for at work where my employer puts in 10% of my salary and I don't have to put in anything. That's on top of my salary so I don't ever see it "pulled out" of my paycheck. I put another very small amount into the 401(k) but they only match $30/month so I'm only sticking about $50/month into it. Pretty much I forget about that money. Then I have another $200/month going into a savings account that I think of as an Emergency money account/occassional fun money.

I think I'm going to bump up the $200/month to $500/month and put the other $300 into a Roth IRA. Anybody got any advice? Am I doing alright (make under $35,000/year)?

I know there are some ATOTers that are good with money so any comments or constructive suggestions are appreciated.

 

[crownjules]

Originally posted by: GeneValgene

Originally posted by: joshsquall
401k seems pretty dumb to me. I really don't plan to be working until I'm 60 (or older). Yes, it's taken out pre-tax, but it's not money you'll see for 20 to 40 years (for most of us). I'd much rather have the money (after taxes) in something more liquid and accessible, like my own mutual fund/stock blend.

it is not dumb...but it is dumb if you rely solely on your 401K for retirement. definitely need to diversify your retirement wealth...maybe even a good idea to look into real estate

401k plans I believe are most beneficial because companies will match your payments to a certain amount. Basically, it's free money. But most people will tell you, or at least have told me, that if you ever leave that company you should roll your 401K into an IRA account.

 

[crownjules]

Originally posted by: lozina
I try to invest instead of saving because the way it is now I think inflation will pwn your savings. the current inflation rate is something like 3.5% this is not very accurate though because it does not consider gas prices and food prices, so it should actually be a little higher.

Then on top of that, whatever interest you do manage to gain which was supposed to combat inflation gets taxed as an income, so for me thats like somewhere 25%. So in the end, I think I'm losing money by keeping it even in a "high yield" savings like ING or HSBC online savings accounts.

So, I dont save, all my extra money is invested. No current debt (usually wiser to attack your debts instead of saving money too)

Of course you are correct in that savings account very rarely outpace inflation (although I think you exaggerated the inflation number a bit, as I've seen the average inflation over the last decade to be 2.5% or so). The thing is that a savings account is the only "safe" investment vehicle. You can't lose your money like you can if you invest in stocks and bonds.

I don't plan to keep anymore than $5K in INGDirect as an emergency fund. Everything over that will be invested into index funds until I feel confident enough to begin stock speculating/investing.

 

[rufruf44]

1. Wipe out any debt with greater interest rate than your liquid funds, with exception of good debt such as mortgage.
2. 6 month living expense in liquid funds (MM, CD,etc)
3. 401K till you get the max Company match.
4. Max Roth IRA
5. Back to 401K/Roth 401K.

 

[Koing]

Originally posted by: Descartes
80-90%, usually.

I don't spend much of my £££ as all I do is train and hang with my mates.

2nd job FTW.

Koing

 

[DCFife]

Monthly the wife and I save:

$1388 in 401(k)'s
$1400 in money market account (used for vacations and stock purchases)
$1000 in a "retirement" account
$625 extra to the mortgage

After the mortgage, food, gas, utilities, and insurance (no car payments) this leaves us with $2600 to spend as we please. We usually have a positive balance on our spending money and it goes to the money market account (see above).

 

[vi edit]

Originally posted by: joshsquall
401k seems pretty dumb to me. I really don't plan to be working until I'm 60 (or older). Yes, it's taken out pre-tax, but it's not money you'll see for 20 to 40 years (for most of us). I'd much rather have the money (after taxes) in something more liquid and accessible, like my own mutual fund/stock blend.

1) Often times you get "free" money from your employers in the form of a match
2) It's pre-tax and can greatly reduce your taxible income
3) Many plans let you take a loan against your contributions if you need to access it. I paid "interest" back to myself if I took a loan against my 401k.

Obviously the ideal situation is to have your savings spread over multiple vehicles.

1) 401k if offered
2) Additional Roth IRA with post-tax income
3) Money market fund for liquid savings/cash (rainy day fund)
4) Some form of stable but higher interest mid term savings (I-Bonds, Mutual funds, index funds, ect) that you can use for non-retirment based longer term savings.

 

[Azurik]

90% probably.

ROTH IRA
401k
ING Direct
Savings Bonds
Bank Accounts

 

[jlee]

I try for about 15%, but it's tough now..don't really make enough to save much easily.