i havent read this thread but i am assuming all TWWers are going to say they save amazingly

9/6/2011 9:45:09 PM

Well of course. It's easy to save all your money when you're living in moms basement.

9/6/2011 9:46:14 PM

^^ better prediction:

The people who save well will post and the others won't post. I don't think too many people care enough to lie about how much they save.

[Edited on September 6, 2011 at 9:47 PM. Reason : ]

9/6/2011 9:47:24 PM

Good months, I can bank my whole salary and live off the commision

Bad months, not so much

9/6/2011 9:49:11 PM

So far the average poster in this thread saves 700% more than american average

9/6/2011 9:52:59 PM

Most of the posters are childless (I think) and have college degrees, which puts us at an advantage when it comes to savings.

9/6/2011 10:00:01 PM

We've had 3 baby announcements in the last week alone.

9/6/2011 10:01:32 PM

How many of those folks posted ITT though. Ken, that's it ... I think.

9/6/2011 10:02:37 PM

babybottom has like 4 or 5 kids....


I have 2...

9/6/2011 10:03:16 PM

I think the 'high amount of savers' posting in this thread is becuase these questions are always skewed. If you suck with finances or see a bunch of people saving like crazy and you dont, you aren't likely to come in here "Yep, I live paycheck to paycheck, have no retirement, and I like buying a lot of dat purple drank with my paychecks' type of posts

Quote :

"Paying extra on a mortgage doesn't make much sense to me right now. You can get a mortgage at 3.5-4% or so. At that interest rate, and with the interest also being tax deductible, I just can't see paying anything extra on it."

You are correct.

If you're financially savvy, it doesn't make any sense.

If you just want to do a smart thing with your money because otherwise you'd just blow it, sure...go for it. In that case, I'd recommend paying off a really low interest mortgage quicker.

[Edited on September 6, 2011 at 10:20 PM. Reason : ]

9/6/2011 10:18:26 PM

Quote :

"babybottom has like 4 or 5 kids.... I have 2..."

lawl

I have 2.

9/6/2011 10:21:21 PM

In order for something to be tax deductible, you must first owe taxes.

Whether you deduct it from taxes or not, you're still losing that 3.5 to 4%. The only way not to pay that is by not having the interest in the first place, which equates to paying off the house

[Edited on September 6, 2011 at 10:29 PM. Reason : .]

9/6/2011 10:28:40 PM

Quote :

"Def a bit cheaper than some hobbies, like jet-skiing and shopping."

haha, you mean like sports cars, roadracing schools, motorcycles, SCUBA diving, flying airplanes, skiing, jet skis, electric guitars, travel, audio recording, etc? Yeah, I can burn a shitload of money in no time if I'm not very careful to get the best bang for my buck.

Quote :

"It depends on why you're saving 50%+ of your income. Pretty sure most folks are saving for a certain goal. Like retirement. Or for a major purchase. Personally, I want to start my own business one day, so I know I need to save a lot now so I can do that sooner rather than later. Also, my monthly income recently doubled unexpectedly while my living expenses decreased. I suppose I could spend more now that my income is higher, but I don't need or want anything. Except to eventually own my own business. Is it really so bad to save a majority of your paycheck?"

Oh, I thought we were talking strictly about retirement savings. I guess that wasn't explicitly stated; I just kind of assumed that was the subject.

I don't think it makes any sense to save THAT much for retirement. If you just want to live like a miser so you can either (a) put together a moderate nest egg and retire very young by continuing to live like a miser for the rest of your life, or (b) die and leave someone a shitload of money that you earned but never enjoyed...well, I don't quite get that.

Now, if you're saving up for a house down payment, or to start a business, or for some other short-term (relatively speaking) goal, that's different. That makes sense. I have almost a year's salary put away for some short-term goals like that (buying an airplane, traveling, buying a speedboat or new sports car, or taking my ex to court however many times I need to secure my place as an equal parent to my daughter). It don't really view it as money that I've saved so much as money that I haven't yet gotten around to spending. That's why I jokingly call it my "hookers & blow" fund--it is wholly segregated from my retirement savings, and I feel no obligation to be responsible with it.

9/6/2011 10:32:02 PM

Quote :

"In order for something to be tax deductible, you must first owe taxes. Whether you deduct it from taxes or not, you're still losing that 3.5 to 4%. The only way not to pay that is by not having the interest in the first place, which equates to paying off the house"

The question is can you do something else with the money that earns you more than 3.5-4%. If the answer is yes, then it makes no sense.

And I'll also add that i'd predict most homeowners also pay taxes.

[Edited on September 6, 2011 at 10:40 PM. Reason : ]

9/6/2011 10:37:54 PM

Quote :

"In order for something to be tax deductible, you must first owe taxes."

If you don't make enough money to be paying income taxes (as half the country doesn't), you're most likely not yet in a position that you should be buying a house.

Quote :

"Whether you deduct it from taxes or not, you're still losing that 3.5 to 4%. The only way not to pay that is by not having the interest in the first place, which equates to paying off the house "

1. No, by the very definition of tax deduction, you are paying less than that. If you have a 25% marginal tax rate, and have a mortgage at 4% interest, you will effectively only be paying 3% interest, for example.

2. Inflation. Historically, it's almost as high as these mortgage interest rates. If inflation is 3.5%, and your loan is at 4%, you are really effectively only paying 0.5% interest. Furthermore, after all of the "quantitative easing", inflation is surely coming eventually.

3. Most of all, opportunity cost. You are losing money by paying down a very low-interest loan (with the interest being tax-deductible, to boot) when you could be investing it elsewhere at FAR higher rates.

9/6/2011 10:41:19 PM

i won't be saving much until house gets rented out

9/6/2011 10:43:11 PM

Basically we are saving my paycheck and living off my husband's salary. I am really working currently for the healthcare because my husband's SUCKS so badly. I would definitely prefer to stay home, but my husband's plan isn't really subsidized while my work pays 50% of the family plan and covers the first 1/2 of the deductible. This is of course huge in planning on having another baby. We are hoping the job market will have some miraculous recovery and he can have more opportunities.

401K- we each contribute 15% and put the max into an IRA each year (we are above the average with our retirement accounts)
We have a 6 month emergency fund we can access (ie more than the 3800)
We have 2 houses....we rent one for profit (we owe much less than 95k ) and live in one that is right above that average (much more than 95k ). With the market downturn, we might technically be under water.
We just put furniture on a credit card at 0% and do not plan on paying that off until that is up which is right around 2200 (we have the money to pay it off, but why?)

Our net worth is positive and is climbing pretty steadily. We are over-saving with the expectation that I will be a stay at home mom (maybe some 3rd shift work) in the next 2 years.

9/6/2011 10:53:18 PM

Quote :

"If you don't make enough money to be paying income taxes (as half the country doesn't), you're most likely not yet in a position that you should be buying a house."

If the government is paying your interest... it's like the government is singlehandedly keeping the banks alive with money that belongs to the government. The government then taxes that same money for a smaller rate from the bank.

For example. Instead of you playing $100 in taxes, the government says you only owe $90 in taxes. Just give the other $10 to the bank. (You're still out $100). The government then taxes the bank on $10 income and only gets $2.

So instead of the government profiting $12 ($10 + $2 bank income tax), govt is screwing themselves out of $10. The $8 goes into the bank's pockets, and the redundant $2 turns into a single $2 which is sent to the government.

So, what they did was making it awash for the homeowner, a profiting adventure for the banks, and the government is shafted of most of its funds.

No wonder why this country is in $14 Trillion debt. They need to keep it simple, stupid.
Oh... don't forget the deductions banks get to make....

[Edited on September 6, 2011 at 11:16 PM. Reason : .]

9/6/2011 11:13:32 PM

Historical savings trend...



Ref: http://research.stlouisfed.org/fred2/categories/112

[Edited on September 7, 2011 at 11:31 AM. Reason : !]

9/7/2011 11:30:47 AM

we save just over 8% in a savings account each month. this is after 401k for both of us, college fund and allowance (which for me has turned into personal savings)

9/8/2011 3:47:15 PM

I put 8% into 401k with a 5% match and usually try to keep 3 months salary in savings. Not nearly as good as others here.

I'm starting to think that buying a house when I was single was a bad idea. I'm just going to move whenever my GF graduates and gets a job. I'm probably gonna have to pay around $1000 to fix my AC in a few weeks. Shit sucks. And I'll probably make little money when I sell it (if at all). It is just zapping away money I could save but everyone told me you gotta buy a fucking house. It's a great investment blah blah blah

9/8/2011 4:27:41 PM

^ditto on the house deal. i dont think i'll be here long enough to have made money in the buy low, sell high scheme- but at least the $8,000 credit makes for a small cushion on that inevitable blow...

max out the roth/year, 8% into 401K with 6% company match. little less then 3 months salary in the savings account, but i steadily add to that every month, along with the small investment account i have on the side that hasnt really done much for me lately... (about even through the wins/losses this year..)

i probably should save more, but i feel a bit ahead of the game on the savings goal. i think that as we all get a bit older, the discipline becomes a bit easier.

9/8/2011 8:33:55 PM

Yeah, no reason to buy a house if you are single. You have no reason to settle down and the extra money you spend on a mortgage kills investment returns.

9/8/2011 9:00:24 PM

Yeah, no reason to buy a house if you are single. You have no reason to settle down and the extra money you spend on a mortgage kills investment returns.

9/8/2011 9:04:01 PM

Roth for about 8 years now, 401K max it, some mutual funds, and some stocks, plan on retiring at 59....MIGHT stay until 61 depending on if I need the little extra in my pension for staying those 2 years, if not, after my 30 I am out!

About 82K in the bank right now. I also go out to lunch each day and sometimes it is late so I it is sorta a early dinner.

[Edited on September 8, 2011 at 9:11 PM. Reason : m]

9/8/2011 9:07:04 PM

All of you people putting 8-9% into your 401(k)'s with no IRA need to consider opening one.

Take your company match, and put everything else into an IRA (Roth, preferably). Roth IRA's are much better retirement vehicles than your 401(k) for an abundance of reasons and every dollar you contribute to retirement beyond your company match should go there first.

If you max that out, then by all means, bump up your 401(k) contribution amount. The ONLY reason to contribute to a 401(k) before an IRA is to get the company match


[Edited on September 8, 2011 at 9:26 PM. Reason : ]

9/8/2011 9:24:11 PM

not always true.

Many companies offer a Roth 401k.

Additionally a growing number of companies offer a 401k with an SDA option whereby you can invest your 401k funds in anything, including options trading.

but yeah, if you have the typical 401k with a limited group of mediocre to shitty funds to choose from, a Roth IRA is better once you max out the company match.

9/8/2011 9:28:14 PM

Never heard of a 401k without the typical shitty selection of mutual funds, but I guess that would be nice.

Another factor that makes IRA's better is that you can withdraw contributions if you ever need it. Not so for a 401k without being taxed ridiculously or having to pay it back. (I think there are some circumstances where you can, but it's much much more limited)

With an IRA, you can save for retirement, but heaven forbid hell breaks loose, it's also a 'last resort' emergency fund

My company offers a Roth 401k, but I only use the traditional one to balance the unknown tax situation (I max out a Roth IRA). With all of these Roth investment vehicles, I can honestly see the government getting rid of the income tax and just having a flat tax....thus I want some to be untaxed. The government will always get theirs


[Edited on September 8, 2011 at 9:36 PM. Reason : ]

9/8/2011 9:32:08 PM

yeah, my 401k is one that i can invest in whatever I want.

I have a mix of funds, individual stocks, bond funds, and cashmoney in a MMA, and change shit up often.

9/8/2011 9:34:36 PM

My issue with Roth accounts -- There's nothing keeping the government from saying "You know what? We need more tax revenue, so we're going to tax you...again."

With a standard IRA or 401k you haven't paid the taxes yet. Then again I suppose the government could always just jack up the tax rate exorbitantly when you do pull money out, but whatever.


Best solution? Get both.

9/8/2011 9:37:32 PM

^ My thoughts exactly.

Thus
Roth IRA max-out
9% to a 401k (6% me, 3% company)

I do believe tax laws will be changed in the future to possibly get revenue off of the untaxed portion of Roth accounts. Hope not...but you never know. In that case, we're all gonna be regretting those Roth accounts They likely will get rid of income tax and just charge on purchases or whatnot.

There would likely be a bunch of Roth folks rioting in the streets if that happens


[Edited on September 8, 2011 at 9:41 PM. Reason : ]

9/8/2011 9:38:36 PM

-10% (joys of being a student)

9/8/2011 9:43:16 PM

The graphic in the OP blows my mind.

9/8/2011 9:43:23 PM

Quote :

"Best solution? Get both."

9/8/2011 9:48:29 PM

^^I see it every day.

A lack of basic financial knowledge combined with parents and people who should be adults not actually acting like adults, and you end up with a massive debt situation like this combined with no one saving for retirement. No financial knowledge combined with no financial discipline...


The current zero-interest rate policies are not helping, either. You used to be able to get a safe, solid return on CDs and such (think: retirees) but with interest rates so low, they can't. The Fed's policies have absolutely destroyed savers in this country. Inflation combined with low interest rates? Yuck.

[Edited on September 8, 2011 at 9:54 PM. Reason : ]

9/8/2011 9:53:32 PM

Quote :

"Yeah, no reason to buy a house if you are single. You have no reason to settle down and the extra money you spend on a mortgage kills investment returns."

Man, I'm not so sure...I spend about $1000/month on my mortage, property tax, and insurance for a $180k house, and then the interest is tax deductable, so that probably ultimately saves me another couple hundred bucks per month or pretty close to it. I pretty much need a garage, and I need detached housing (hard to play electric guitars in an apt or condo), and I don't think I could rent much of a house for $800/month or less.

Now, if I only had one car, and no motorcycle, jet ski, riding lawn mower, or tools...and I didn't have the electric guitar factor, then yeah, as a single dude, I'd probably rent a nice apartment and save some money (or spend the same amount and live in a kick-ass location)...but yeah, I bought a 1900 sq ft, 3BR/2.5 bath house for just me and sometimes my 4 year old. There were rooms that stayed empty with the doors shut, hahaha. I didn't really see a better option, though.

I ended up keeping my New Bern house to rent out...should make a few hundred bucks per month on it (minus whatever tenants fuck up beyond their security deposit, or simply normal wear and tear). Just moved to FL and am looking to buy another house here.

[Edited on September 8, 2011 at 10:49 PM. Reason : ]

9/8/2011 10:47:18 PM

^ I don't quite understand that logic, either. Heaven forbid you actually build equity in something.


If you rent a nice apartment, most of the time you can buy a decent sized house for the same monthly payment...especially with such low interest rates. When I bought my house, I was spending $850 a month on my own apartment (no roomates) and I bought a $160,000 house for $1,000 per month. After taxes, I might pay $50-$100 more per month to actually own something. (But I build more than $50-$100 in equity per month also)

Sure, there's a good bit of upkeep costs, but unless you're dating and will be married in a year or two, I think it's always a good idea to buy a house if you have a steady job (Especially at such low interest)

(Edit: Assuming you are disciplined enough to keep a rainy day fund for when the HVAC or something goes out, for instance)

[Edited on September 8, 2011 at 11:42 PM. Reason : ]

9/8/2011 11:39:54 PM

What cracks me up about our 401k options is it is managed by Fidelity and they offer us mostly a small selection of Vanguard Funds. But at least my companies matching is good enough to get us a top rating on http://www.brightscope.com/

9/9/2011 12:03:27 AM

Quote :

"I don't quite understand that logic, either. Heaven forbid you actually build equity in something. "

Well, it's a question of opportunity cost. That $150/month, plus the upkeep costs of the house, plus big-ticket stuff like that HVAC replacement, could be invested elsewhere.

...and how much equity are you actually building per month at this point on the amortization table?


I'm not really arguing against home ownership if you're financially in a position to responsibly do it. I own one house, am looking for another, and have thought about buying a condo strictly as rental property in the future. i'm just saying that there are a variety of angles to consider.

9/9/2011 12:30:33 AM

^^ My 401k is also managed through fidelity, but ours is like BobbyDigitals, having a huge amount of flexibility and options where we put our money.

I'll fess up and admit that I have been horrible at saving until recently.

Put 3% into the 401k.
Have 0 dollars in savings.
Have a pretty absurd amount of credit card debt (getting engaged, relocating the fiancee, taking a month long trip to Africa, and several huge unexpected expenses in the past year).
Have about $24k in student loans left

All that said, over the past 3 years I have reduced my overall debt by 2/3 (car is now 90% paid off, 1 of my 2 student loans paid off, massive reduction in CC debt).

For the good (responsible) news:

-In 6 more days I'll finally be free of all that absurd CC debt (thank you bonus!).
-In 6 more days the car will be paid off!
-Even though I dont have savings, I do get company stock awards. We've got enough in stock for a 1yr emergency fund.
-Our rent is ~1100 a month (all up) and total monthly living expenses are less than 25% of my net income.
-My fiancee's income is 100% into savings
-Moving to maxing out my 401k this year and beyond


By this time next year, the student loan should be paid off completely and we should have enough saved to make a 20-30% down payment on a house here in Seattle (and still have a real emergency fund). Fingers crossed that I can keep from buying anything stupid (exotic car, pick up truck, boat, motorcycle etc) or starting another company before then

[Edited on September 9, 2011 at 3:49 AM. Reason : .]

9/9/2011 3:47:31 AM

Quote :

"I pretty much need a garage, and I need detached housing (hard to play electric guitars in an apt or condo)"

I own a townhouse so I have neither luxury. I got decent at guitar but lost interest because I couldn't play it loud. My neighbors are lame too. And the paint is chipping on my car.

I feel like I spent a lot on not much. I could make due in a single bedroom apartment but that wouldn't impress the ladies now would it. Whatever, hopefully I'll be out in 2 years when my GF graduates. I can't afford a real house right now. I could get something better but we would just move again anyway.

9/9/2011 1:55:02 PM

a REAL house

is your townhouse a toy model?

9/9/2011 2:06:14 PM

Took a loan from my 401k to pay for a half priced (foreclosed) condo near ncsu.

Paid 30k for a 60k condo, my total personal contribution was 17k, as my 401k is a company match.

Paying myself back and making money on the condo as a rental (700/month).


And for stock trading, theres nothing like a Roth ... no tax mess to deal with at the end of the year, and I can still use an online(scottrade) broker to manage it all simply.

9/9/2011 2:13:13 PM

Not nearly as much as I should be.
But...I have zero debt aside from a reasonable mortgage. I have decent assets and a nice nest egg.
I do need to start thinking more about long term investments though.

I inherited a banjo and a end table from my grandparents, so I'm pretty well set.

[Edited on September 9, 2011 at 2:56 PM. Reason : s]

9/9/2011 2:55:53 PM

I'll be one of the few that has come in here and say we don't have anything in savings. I've been laid off three times already and it has taken me a while to find a job each time. This has caused us to rack up some credit card debt several times (though its basically back down to zero now). We rent a modest townhouse and don't have any car payments or fun money either. Having three kids is expensive between daycare, groceries, buying new clothes every fall/spring, etc.

Though the only debt we currently have is about $7500 in student loans

[Edited on September 9, 2011 at 4:14 PM. Reason : c]

9/9/2011 4:12:37 PM

Quote :

"Paid 30k for a 60k condo"

What does a 60K condo look like? Especially one that you can get for 30k? Sounds like you're slumlording it.

9/9/2011 4:18:43 PM

spent $500 more than i took in last month....

9/9/2011 4:23:23 PM

Quote :

"Buy house with 20% down on a house and a 15 year loan. Pay twice as much each month and have it paid off in 7.5 years. "

Facepalm

Quote :

"I max my roth 401k and roth IRA so ~$21,500 a year in after tax dollars. The remainder is spent mostly on booze and the rest I just blow."

9/9/2011 5:04:10 PM