From the wealth distribution From the wealth distribution thread, it seams like saving $4k/month for those making $150k/yr.sos unrealistic. So, how much do Piggs save? Include IRA, 401k, 529, etc.
scaredyclassic
May 22, 2010 @
6:24 PM
i think actually i save too i think actually i save too much. i earn mid six figures, never go on vacation, iron my own shirts, drive old cars, never borrow on credit cards. I am cheap about all kinds of little things — wear suits a bunch before dry cleaning, split an entree with my wife (hey, they’re big!) drink cheap booze. It adds up. But sometimes I think I probably don’t consume enough. I may have a glut of savings.
larrylujack
May 22, 2010 @
7:55 PM
scaredycat wrote:i think [quote=scaredycat]i think actually i save too much. i earn mid six figures, .[/quote]
By mid 6 figures, you mean 500k/yr? You should be livin’ large!!
bearishgurl
May 22, 2010 @
8:11 PM
scaredycat wrote:i think [quote=scaredycat]i think actually i save too much. i earn mid six figures, never go on vacation, iron my own shirts, drive old cars, never borrow on credit cards. I am cheap about all kinds of little things — wear suits a bunch before dry cleaning, split an entree with my wife (hey, they’re big!) drink cheap booze. It adds up. But sometimes I think I probably don’t consume enough. I may have a glut of savings.[/quote]
Scaredycat, there’s nothing wrong with any of that. Credit cards are nice to earn Rewards Pts. off of (earned [and used] 3 RT flights in the last yr) and “float somebody else’s money” for 3-4 weeks. That’s about it. Never in my life have I carried a balance. He!!, I even reuse alum. foil and napkins if they didn’t get used and put plastic “silverware” in my DW!! Even though I am a highly trained wine steward from way back when and grew up near the “wine country” (can `taste’ with the best of them) – I still drink boxed wine. Guess you could call me a “cheap date” – LOL! Yes, restaurant meals have gotten crazy exp. over the years and also “huge.” There’s nothing wrong with splitting an entree.
Ever heard of Dryel?? I use it b/c all my business clothes are dry-clean. It works well using it in place of skipping at least one dry-cleaning.
All the above exp. you mentioned that you are frugal on are a complete waste of money, anyway, IMO.
UCGal
May 22, 2010 @
8:15 PM
Just shy of 20%. Just shy of 20%. 401k/IRA/529 taking the bulk of it. This does not include other measures that are ‘like money in the bank’ – like extra principal payments to pay off the house sooner.
I’m not quite as frugal as scaredy – but we’re pretty darn cheap. No housekeeper or gardener – unless you consider paying the kids to pull weeds). We eat at home, brown bag it for lunch at work, etc. (Fortunately, both my hubby and I enjoy cooking – so we’re not suffering from lack of good food.) We have cars that we paid cash for… living with out servicing debt saves a LOT of money – allowing for more savings.
meadandale
May 22, 2010 @
8:33 PM
Not sure how to calculate Not sure how to calculate this since I’m self employed and contribute to a 401k and also pay a profit sharing bonus to myself out of the company equal to my 401k contribution(that also goes into 401k)–actually it’s a Keogh…but same difference.
Total between the two is about 15% of my gross.
I save 1% of the cost of my house annually for ongoing maintenance. This means: need new roof, washer dies and need a new one, toilet breaks and needs to be fixed. It is ONLY used for unexpected or ongoing maintenance of the property not for decorating, remodeling or anything else.
In addition to this I save about 1% of my net income into a savings account on a monthly basis. This is used for random stuff: vacations, new tv, etc.
I’ve also been fortunate to have excess ‘profit’ from my business over the last 5 years. The amount per year varies considerably but is generally 10% of my gross. This all goes into a money market account (more saving). It’s this money that I’m using to pay for my current home remodel.
I consider myself a pretty good saver, especially in comparison to the vast majority of the people in this country. I could cut alot of waste from my spending (eating out alot) if I needed to but considering how much I already save I don’t beat myself up too much over it.
I’m all cash, all the time. If I can’t pay for it with cash I don’t buy it. My only debt now is my mortgage; paid the car off this year. In fact, I’m now socking away the payment I had on the car into another savings account so when the time comes to replace my current vehicle I’ll be able to pay for it in cash.
Ricechex
May 22, 2010 @
8:33 PM
It is not “cheap” to me…it It is not “cheap” to me…it is about utiizing what we have and being conservative. I re-use old jars, aluminum foil, gift wrap, coffee cans, plastic silverware. At restaurants when the server brings an excess of napkins and little plastic packets of condiments, I always take them home or put them back for concern they will get thrown away. (not a hoarder….it is just hard to trash things without good reason.)
Cheap is when you go to a restaurant with others and you short your part of the bill, and/or the server.
Unfortunately, our society has given us the message that we must consume endlessly, otherwise that is cheap.
bearishgurl
May 22, 2010 @
9:04 PM
Oh, and Scaredy, you say you Oh, and Scaredy, you say you never go on vacation. That’s just . . . sad. I do – at least 4x per yr. I stay at friend’s/relative’s homes, volunteer to buy groceries and/or contribute to their potluck and help with setup/cleanup, etc. Sometimes I stay in 6-8 homes on one road trip. If I have to end up staying in a BW Motel “in-transit” somewhere, I’m sure da*n-well going to get some points for that AND a free breakfast.
The only time I pay real money for lodging is to ski. I book ONLY thru craigslist from a private owner. I do NOT pay the typical 13% “room-tax.” I usually make a deal to use the owner’s “time-share week” by relieving them of their annual HOA fee and taxes for their 1/52 “fractional interest.” That is ALL because they are UNABLE TO USE IT THIS YEAR so I am doing them a FAVOR!!
Scaredy, if you plan ahead, you would be shocked at how cheap a great vacation can really be. I’m sure you must be aware that there is more than one way to skin a cat – LOL!
CA renter
May 22, 2010 @
10:54 PM
bearishgurl wrote:
The only [quote=bearishgurl]
The only time I pay real money for lodging is to ski. I book ONLY thru craigslist from a private owner. I do NOT pay the typical 13% “room-tax.” I usually make a deal to use the owner’s “time-share week” by relieving them of their annual HOA fee and taxes for their 1/52 “fractional interest.” That is ALL because they are UNABLE TO USE IT THIS YEAR so I am doing them a FAVOR!!
[/quote]
Great idea on the timeshare, bearishgurl!
scaredyclassic
May 23, 2010 @
12:26 AM
i meant mid 100’s, not mid i meant mid 100’s, not mid six figures. i don’t go on vacation because
(i) it costs income i could have earned if I stuck around and
(2) i don’t have fun
(3) i cannot relax away from home
(4) i take a break at the end of the week during the weekend and
(5) there’s nowhere to go, really, since i believe everywhere is essentially the same and
(6) I have a certain routine which would be interrupted and
(7) i need to eat specific things which wont be available elsewhere maybe so it’s all very risky and
(8) it gives me a headache to transport children far from home and
(9) we pay a lot of money to rent this place, so we might as well stay here and
(10) I just don’t feel like it.
but if i earned 500,000 a year, that would be 10k a week? no way i’d take a week off! probably don’t want to die with too uch cash int he bank. but frankly, what is worth consuming? not much. good dental floss, for one. that’s well worth it. also, fresh limes for cheap mixed drinks. very worth it. i tried dryel and i’d rather wear the suit 5-10 more times and spring for the cleaning.
scaredyclassic
May 23, 2010 @
1:09 AM
budgeting is so boring and budgeting is so boring and deadening. i think it’s better to just plan to spend virtually nothing.
an
May 23, 2010 @
7:08 AM
Seems to be pretty evenly Seems to be pretty evenly divided between the different break down. Savers are definitely not atypical among Piggs.
8bitnintendo
May 23, 2010 @
8:47 AM
AN wrote:Seems to be pretty [quote=AN]Seems to be pretty evenly divided between the different break down. Savers are definitely not atypical among Piggs.[/quote]
I’m actually surprised by how many <10%ers there are on this forum, I was expecting the majority to be in the 20-30% or 30-40% range.
an
May 23, 2010 @
8:57 AM
8bitnintendo wrote:AN [quote=8bitnintendo][quote=AN]Seems to be pretty evenly divided between the different break down. Savers are definitely not atypical among Piggs.[/quote]
I’m actually surprised by how many <10%ers there are on this forum, I was expecting the majority to be in the 20-30% or 30-40% range.[/quote]
I'm actually surprised by that number too. Because of the conversation we had in the wealth distribution thread, I wasn't expecting this many 30%+ either. I thought the bulk would be between 10-30%.
bearishgurl
May 23, 2010 @
12:32 PM
8bitnintendo wrote:I’m [quote=8bitnintendo]I’m actually surprised by how many <10%ers there are on this forum, I was expecting the majority to be in the 20-30% or 30-40% range.[/quote]
I have not been able to save much in recent years because I am HH w/one still-minor child, which I must maintain a home for so I did not vote.
This takes us back to the income/wealth arguments. One cannot typically withdraw tax-free savings (without great penalty) until age 59.5. I'm not quite there yet. When I get there, I have no worries. That's all I can say here.
bearishgurl
May 23, 2010 @
1:07 PM
scaredycat wrote:i meant mid [quote=scaredycat]i meant mid 100’s, not mid six figures. i don’t go on vacation because
(i) it costs income i could have earned if I stuck around and
(2) i don’t have fun
(3) i cannot relax away from home
(4) i take a break at the end of the week during the weekend and
(5) there’s nowhere to go, really, since i believe everywhere is essentially the same and
(6) I have a certain routine which would be interrupted and
(7) i need to eat specific things which wont be available elsewhere maybe so it’s all very risky and
(8) it gives me a headache to transport children far from home and
(9) we pay a lot of money to rent this place, so we might as well stay here and
(10) I just don’t feel like it.
but if i earned 500,000 a year, that would be 10k a week? no way i’d take a week off! probably don’t want to die with too uch cash int he bank. but frankly, what is worth consuming? not much. . . . [/quote]
Scaredy, I’m sensing signs of depression from your post. As someone who has been to 16 family funerals since 1992 (decedents aged 38-73), I have undergone a change in philosophy over the years. I used to be very career-oriented and did not want to miss work just in case I missed out on the latest event, gossip, etc. After losing a younger sibling suddenly at the age of 46 (a multimillionaire, workaholic and consummate planner who did everything right), I realized we all have little control over our futures.
You can bring your own food and eat it wherever you go. Have you considered driving up to Napa or Mendocino County for a few days and boarding the Skunk Train??
Life can be short, Scaredy. Take time to smell the roses. You can do this for free across from the zoo or walking in Coronado.
Don’t worry about the economy in SD. It will all be here waiting when you get back :]
an
May 23, 2010 @
1:13 PM
bearishgurl, I agree with you bearishgurl, I agree with you that life can be short. It just seems to me like what’s scardy is doing actually make him happy. It’s just not what would make you or me happy. I do like to travel, just like you, so I know exactly what you’re saying.
sdcellar
May 23, 2010 @
1:33 PM
I find this poll interesting, I find this poll interesting, but mostly useless without context.
I have to say, I expected the Pigg faithful to be better than average savers, but I’m surprised how many are saving so much.
I maybe have this wrong, but the national average is around 5%?
an
May 23, 2010 @
1:46 PM
sdcellar wrote:I find this [quote=sdcellar]I find this poll interesting, but mostly useless without context.
I have to say, I expected the Pigg faithful to be better than average savers, but I’m surprised how many are saving so much.
I maybe have this wrong, but the national average is around 5%?[/quote]
Isn’t the national saving rate negative?
sdcellar
May 23, 2010 @
2:24 PM
I actually mean the personal I actually mean the personal savings rate, nationally. The national savings rate is something else and yes, last I heard, it was negative.
DWCAP
May 23, 2010 @
2:49 PM
AN wrote:sdcellar wrote:I [quote=AN][quote=sdcellar]I find this poll interesting, but mostly useless without context.
I have to say, I expected the Pigg faithful to be better than average savers, but I’m surprised how many are saving so much.
I maybe have this wrong, but the national average is around 5%?[/quote]
Isn’t the national saving rate negative?[/quote]
Q1 savings rate is just over 3%. It was up at ~5.5% in sept 09, but is falling pretty steady now.
I am not supprised at the <10% savers here. With kids and houses and everything else in todays life, a 10% savings rate isnt bad. If all Americans could pull that off we wouldnt be in the mess we are in today.
Rather the number of >50% savers caught my eye. Something unusual is going on there. Either they are the top 1% of households income wise, they make very little and are getting the $$$ from somewhere unusual (like gifts or inheritances or divendens… etc) or are somehow able to shift expenses onto someone else (kids living at home….).
Let me break my surpise down this way. Let say you made 100k year (just a nice number; married filing jointly; adjusted income), by my calculations you would be taking home ~70k year after income taxes and SS and medicare and state taxes and everything else. To be saving over 50% of net income, someone in these shoes would have to be saving >35k/year, and living on <35k. Sure, you can live on 3k a month after taxes. I dont doubt it. But I am suprised how many people with incomes of over 100k/year (adjusted) want to.
Also, are people including their employer 401k match and bonus's in the savings rate, but not in the income? We can do that, but it may be a point of discrepency that I am missing. (I caught myself doing this)
Just to clarify, I am a 40% saver. I am not saying it isnt happening. I am just supprised at the numbers of people who are ahead of me. What a freaky subset of the population this site is.
scaredyclassic
May 23, 2010 @
3:00 PM
oh yes, i’m depressed, many oh yes, i’m depressed, many years on zoloft, but i stopped. I just am this way. taking a vacation isn’t going to help. I am just this way; my people have been this way for generations back.
some people are just depressed. like eeyore. you think a vacation’s going to help eeyore? please.
. you just have to embrace who you are and stumble along.
exercise is the only things that lifts my spirits, but “vacations” interfere with that terribly (travel time, maneuvering. best to be home if youw ant to get your regular hour run in….a change in scenery can be achieved by running that same loop in the other direction…
an
May 23, 2010 @
3:38 PM
DWCAP, is tax for $100k that DWCAP, is tax for $100k that high?
DWCAP
May 23, 2010 @
3:59 PM
It isnt just income tax, add It isnt just income tax, add in Social security, Unemployment, Medicare, CA income taxes. It all adds up.
an
May 23, 2010 @
4:03 PM
I see. That makes sense. I see. That makes sense.
bearishgurl
May 23, 2010 @
4:55 PM
DWCAP wrote:It isnt just [quote=DWCAP]It isnt just income tax, add in Social security, Unemployment, Medicare, CA income taxes. It all adds up.[/quote]
DWCAP, not to be singling you out, but Medicare tax is only charged against the wages of workers who are over the age of 45.
Any HR Piggs here?? Correct me if I’m wrong.
waiting for bottom
May 23, 2010 @
6:55 PM
bearishgurl wrote:DWCAP [quote=bearishgurl][quote=DWCAP]It isnt just income tax, add in Social security, Unemployment, Medicare, CA income taxes. It all adds up.[/quote]
DWCAP, not to be singling you out, but Medicare tax is only charged against the wages of workers who are over the age of 45.
Any HR Piggs here?? Correct me if I’m wrong.[/quote]
You just lost all credibility with that comment. 100% false. Where did you even come up with that? Medicare tax of 1.45% is charged on all wages – it’s part of the 7.65% FICA.
bearishgurl
May 23, 2010 @
7:19 PM
waiting for bottom [quote=waiting for bottom][quote=bearishgurl]Any HR Piggs here?? Correct me if I’m wrong.[/quote]
You just lost all credibility with that comment. 100% false. Where did you even come up with that? Medicare tax of 1.45% is charged on all wages – it’s part of the 7.65% FICA.[/quote]
waiting for bottom, this is why I was asking for clarification from a qualified HR person. I had a stint in the ’80’s for a year as a payroll clerk. I am fairly certain that Medicare tax did not kick in until the employee reached the age of 45, at that time. I have not been a W-2 employee for quite some time.
Perhaps the law was changed and this deduction was merged in with the FICA ded?? It used to be separate. I do not know when this change occurred.
bearishgurl
May 23, 2010 @
5:06 PM
DWCAP wrote: . . . Sure, you [quote=DWCAP] . . . Sure, you can live on 3k a month after taxes. I dont doubt it. But I am suprised how many people with incomes of over 100k/year (adjusted) want to. . . [/quote]
Like sdcellar, my BS meter starts to go thru the roof when I read stuff like this . . . LOL.
DWCAP, IMHO, you can’t “live on 3K a month after taxes” as a homeowner in this county unless you can meet all of these criteria:
1) You purchased your home more than ten years ago for no more than $330K and did not take out a purchase $ loan of more than about $230K (prime/NOT sub-prime), fully amortized, made all payments and did not borrow anymore $$ from the property;
2) You DO NOT have any expenses for children;
3) You have xeriscape/dirt/rocks/weeds and have turned off your sprinkler system;
4) Your veh(s) are pd. for and you do NOT have any credit card debt or other consumer loan debt;
5) You do NOT have any student loan debt;
6) Your mo. gasoline bill does not exceed $200;
7) You don’t subscribe to any movie channels, DVR, etc. in your cable pkg;
8) If living out of City of SD, you have the 40 gal. only trash p/u service (90 gal. can is 3x the cost);
9) Your avg. SDGE bill year/round is $55 or less (read: blanket, sweater and fan usage);
10) You use coupons for groceries whenever possible;
11) Your water bill qualifies you for a baseline sewer rate (abt. $44 bimonthly);
12) You bum clothes for free from friends, etc., buy used clothing, or only shop clearance sales w/coupons (occasionally);
13) You never eat out, unless you have a coupon for Subway and someone to split the bill with;
14) You cut your own hair and dry clean your own clothes;
15) An employer or union/retirement assn. is paying all or the bulk of your health/life prems;
16) You never travel, unless its in someone else’s car (and they don’t want any gas $$) and you stay at someone else’s home;
17) You don’t give gifts on holidays or b-days;
18) No unexpected major car repairs befall you;
19) No unexpected major home repairs befall you;
20) Your property is not in a fire/flood zone, (neccesitating higher ins. prems.) and you have a $1000 + ded.;
21) Everyone in your family is over 25 and has a good driving record so you can get a good auto ins. prem. with $1000+ ded.;
22) You check all books/DVDs out of the library instead of renting/buying;
23) You have a “voice-only” cellphone;
24) You have NO MR on your property to pay or HOA/street bonds to pay every month, etc. . .
Sound Harsh??? Remember, as a homeowner, you “get” to pay PROPERTY TAXES, due April and December and your Homeowner Ins. Prem., due once per yr. Take that chunk out of your $36K net and carefully examine what you’re left with to live on!!!
If you are living in a free and clear property with Prop. 13 tax treatment, this is entirely possible, IMO.
I try to use the mil. commissary for groceries as often as I can and NO WAY could I live off a 36K annual net income . . . and I’m as frugal as they come – LOL 🙂
DWCAP
May 23, 2010 @
5:13 PM
bearishgurl,
I am not sure bearishgurl,
I am not sure what you are getting at here. I never talked about either 1) the fact that I do that or 2) that someone who is living this way will own a house.
If anything your post only adds to my argument, most people making high income wont want to live that way.
an
May 23, 2010 @
6:22 PM
bearishgurl wrote: . . . and [quote=bearishgurl] . . . and I’m as frugal as they come – LOL :)[/quote]
That’s a very big claim. I call BS.
DWCAP
May 23, 2010 @
6:51 PM
bearishgurl wrote:DWCAP [quote=bearishgurl][quote=DWCAP] . . . Sure, you can live on 3k a month after taxes. I dont doubt it. But I am suprised how many people with incomes of over 100k/year (adjusted) want to. . . [/quote]
Like sdcellar, my BS meter starts to go thru the roof when I read stuff like this . . . LOL.
DWCAP, IMHO, you can’t “live on 3K a month after taxes” as a homeowner in this county unless you can meet all of these criteria:
………………….
:)[/quote]
The mistake you are making here is you are putting yourself into the situtation, and not seeing how you could do it. I use to live on far less than 3k a month here in SD, in 2006. And I managed to save money doing it. Not alot but I did. Here is how.
1) I have no debt. No college loans. Car is paid off. No credit card debt.
2) I am single. I AM NOT A HOMEOWNER I had roommates to defray the costs. I didnt share a room, but it was 4 guys in a 4 bed duplex. $650/month room/utilities/cable.
3) I got a signing bonus. This paid for all the little stuff to get me started.
4) 100% employer paid health care.
5) Jeans and polo shirt work place.
6) <15 mile commute.
7) Dinner out was pizza, then the bar.
etc etc etc.
In 2006, the year I moved to SD, I made just north of 45k PRETAX, and managed to save 5k cash and 4K in my 401k. My paychecks were running about 2500/month, and my expenses were ~2000/month. So, yes, you can live in San Diego for less than 3k month pretax. I did it. You cant raise a family and own a house and such, but at 24 who cares? That wasnt the point.
Sorry to set off your BS meter, I think it needs to be calibrated to what I actually said.
bearishgurl
May 23, 2010 @
7:26 PM
DWCAP wrote:Sorry to set off [quote=DWCAP]Sorry to set off your BS meter, I think it needs to be calibrated to what I actually said.[/quote]
DWCAP, I was only thinking in the context of most of the Piggs posting on this thread and the “wealth distribution” thread it started on, who were trying to pay all of the above-mentioned monthly bills and THEN some, while presumably raising a family.
Of course a tenant would be able to live off $3K a month – maybe even a “frugal” parent 🙂
bearishgurl
May 23, 2010 @
7:45 PM
Correction, my mistake. Correction, my mistake. Medicare tax of 1.45% of gross pay was a separate deduction (found checkstubs from back when I was under the age of 45).
The deduction that took place starting at the age of 45 was the biweekly EMPLOYEE CONTRIBUTION of the defined benefit plan.
This does not apply to employers which do not offer a defined benefit retirement plan.
Sorry for any confusion.
CA renter
May 24, 2010 @
12:24 AM
deleted deleted
(former)FormerSanDiegan
May 24, 2010 @
9:27 AM
I think I am in the 30-40% I think I am in the 30-40% range, but since the question was percentage of NET income, I’d have to review tax records and such to be sure.
UCGal
May 24, 2010 @
10:00 AM
FormerSanDiegan wrote:I think [quote=FormerSanDiegan]I think I am in the 30-40% range, but since the question was percentage of NET income, I’d have to review tax records and such to be sure.[/quote]
Doh – I just noticed it said NET income.
My percentage just went up .
The bulk of my savings is in 401k (pre-tax) and IRA (hubby doesn’t have 401k but is old so he can do pretty big IRAs) I also do annual infusions to the kids 529’s. All of that is savings. Some of it is pre-tax, though.
It’s a higher percentage as NET income… I’ll have to check my turbo tax summary and do some calcs.
an
May 23, 2010 @
7:35 PM
DWCAP wrote:
Rather the [quote=DWCAP]
Rather the number of >50% savers caught my eye. Something unusual is going on there. Either they are the top 1% of households income wise, they make very little and are getting the $$$ from somewhere unusual (like gifts or inheritances or divendens… etc) or are somehow able to shift expenses onto someone else (kids living at home….).
Let me break my surpise down this way. Let say you made 100k year (just a nice number; married filing jointly; adjusted income), by my calculations you would be taking home ~70k year after income taxes and SS and medicare and state taxes and everything else. To be saving over 50% of net income, someone in these shoes would have to be saving >35k/year, and living on <35k. Sure, you can live on 3k a month after taxes. I dont doubt it. But I am suprised how many people with incomes of over 100k/year (adjusted) want to.
Also, are people including their employer 401k match and bonus's in the savings rate, but not in the income? We can do that, but it may be a point of discrepency that I am missing. (I caught myself doing this)
Just to clarify, I am a 40% saver. I am not saying it isnt happening. I am just supprised at the numbers of people who are ahead of me. What a freaky subset of the population this site is.[/quote]
I think it really comes down to the mindset. If you're a natural saver, I don't think it would be much of a problem, but if you're not, it's quite hard, if not impossible. I myself don't want to live under $35k/yr. However, I know two couples who are (by my guess) living under $35k/yr and they make north of $200k/yr. They seem perfect happy living their current life style. They don't have cable, they don't have cellphone bill, one wear hand me down from their kids, while the other keep only one light source on at a time and turn off water heater when they leave for work. So, by their standard, I'm not even close to being frugal. I admire their ability to live that life style while making that much money. They on the other hand can't see themselves spending anymore money.
UCGal
May 24, 2010 @
10:03 AM
DWCAP wrote:
I am not [quote=DWCAP]
I am not supprised at the <10% savers here.
[/quote]
Color me confused... wouldn't most Piggs be the type to max out their 401k - at least 10% right there.
Am I the only one considering retirement savings part of the overall savings?
meadandale
May 24, 2010 @
10:08 AM
UCGal wrote:
Am I the only [quote=UCGal]
Am I the only one considering retirement savings part of the overall savings?[/quote]
No, I considered ALL my saving..retirement and everything else.
an
May 24, 2010 @
10:40 AM
UCGal wrote:
Color me [quote=UCGal]
Color me confused… wouldn’t most Piggs be the type to max out their 401k – at least 10% right there.
Am I the only one considering retirement savings part of the overall savings?[/quote]
I would assume most Piggs are very conservative with their money. This poll shows it. But according to some poster, those who are in the >50% are either BSing or are super wealthy. Piggs are definitely not your average American with regards to saving.
You are not the only one considering retirement. I consider everything that’s not expense as savings. For those who make around $150k+, I assume their net take home should be around $9k-10k/month. So, how hard is it to live under $4500-5000/month?
BTW, I don’t intend this poll to be exact. An estimate should be good enough. I’m sure you have months where you save less due to housing remodel, Christmas, Birthday, etc. The there are months where you save more due to no big expense.
Last year, 401k limit is $16500. If a couple making $150k both max out their 401k, they really only need to save an extra $1000-1500/month to break the 50% mark.
sdcellar
May 24, 2010 @
11:26 AM
AN, I guess I haven’t made AN, I guess I haven’t made myself clear, but I believe a number of folks can save significant amounts (and a number who cant).
With regard to net take home for someone at $150K it’s generally between $8K to $9K depending on their tax situation. Not to nit pick, but a grand a month makes a big difference.
I agree that a goal for most people is to max out their 401(k), but that is a lot of work for a lot of people and anything beyond that is even harder, so it’s not entirely uncommon for it to pretty much stop there. Some may contribute additionally to college funds, but that’s also one of the tougher demographics to pull that off, so that is often limited to something lip service-y like a few grand a year.
Also, even though the limit might currently be $16.5K per individual, most plans have contribution limits at a percentage level. 15% is the highest I’ve ever been allowed to contribute, so in your couple example, you’re really capped at $11,250. So that’s just under $2K per month, a much more achievable (and believable) number.
Also, I said I was going to let you off the hook, but since you want to call me out again, BS on you, not so much on others.
an
May 24, 2010 @
11:39 AM
sdcellar, I assume you’re sdcellar, I assume you’re around $150k mark, so your number is probably much more accurate than mine. I just took my number and add a % on top of my net, the % would equal the % my gross would need to increase by to get to $150k.
I agree, it’s not easy to save/max out retirement. Hence our national savings rate is 0-5%. So, only a small group of people can do this. It just seem that Piggs have a very different demographic break down. I don’t know about you, but to me, I don’t even noticed about my retirement money. I.E. I don’t count that as income. I learn to live with what I get per paycheck. It might be different for you, but I have always been maxing out my 401k, from the very first day I start working full time. Back then, I was putting away 30%+. So, I’m quite surprise you experience a cap in %. I guess every company is different.
BTW, I wasn’t calling BS on you. Anyways, I already admitted that I was BSing about my saving and that I have huge credit card debt. I’m your typical American.
sdcellar
May 24, 2010 @
12:08 PM
Yep, I think that’s the Yep, I think that’s the easiest way to do it. Start early, max out, and you’ll never “miss” the income. Another good strategy for people who just can’t start at full contribution levels is to do the best they can and as they get raises, put as much of that as they can into their retirement, ideally all of it.
Also, just so I’m sure I’m understanding what you’re saying on a specific point, you worked for a company that had a 401k plan that let you contribute 30% of your gross salary?
an
May 24, 2010 @
12:36 PM
sdcellar wrote:Yep, I think [quote=sdcellar]Yep, I think that’s the easiest way to do it. Start early, max out, and you’ll never “miss” the income. Another good strategy for people who just can’t start at full contribution levels is to do the best they can and as they get raises, put as much of that as they can into their retirement, ideally all of it.
Also, just so I’m sure I’m understanding what you’re saying on a specific point, you worked for a company that had a 401k plan that let you contribute 30% of your gross salary?[/quote]
Yep, money that you don’t see, you won’t count on it. So if your company won’t let you max out your 401k, then you can max our your IRA as well.
You got that right sdcellar. At the time, I made $45k/yr. and the let me max out at $13k, iirc.
sdcellar
May 24, 2010 @
3:01 PM
What percentage are you What percentage are you allowed to contribute now?
8bitnintendo
May 24, 2010 @
3:30 PM
sdcellar wrote:What [quote=sdcellar]What percentage are you allowed to contribute now?[/quote]The 2010 limit for elective deferrals to a 401k (for employees under the age of 50) is $16,500, which is the same as it was for 2009. Plus $5,000 maximum to an IRA.
an
May 24, 2010 @
3:39 PM
sdcellar wrote:What [quote=sdcellar]What percentage are you allowed to contribute now?[/quote]
Right now, I’m at over 15% but less than 20%. I know other coworker who are more junior putting in over 20%.
UCGal
May 24, 2010 @
4:14 PM
401k has a cap of 16.5k/year. 401k has a cap of 16.5k/year. If you’re over 50 you can do more because of “catch up” contributions – current catch up limits are $5.5k on top of the 16.5k.
Percentage allowed to be contributed can vary by employer.
And there are extra rules for “highly compensated employees”. (I’m not in that category, so I don’t know them all.)
If you’re contributing the max federal – your actual percentage will be based on your salary… which will vary.
If you make 100k, you’d hit the max at 16.5% contributions
If you make 50k, you’d hit the max at 33% – probably higher than your plan allows.
nla
May 24, 2010 @
4:56 PM
AN wrote:I want to keep it [quote=AN]I want to keep it simple, so just take your biweekly paycheck, multiply by 26 and divide by 12. I’d consider that as your net income. Again, this is not supposed to be that detailed. Just a general idea. [/quote]
AN. I think you need to properly define what “net” is.
The first time I post, I thought it was gross not net, so my saving rate came up for this year (up to end of April) to 33%.
If net = gross – tax, then my saving rate goes up to 41%.
By your definition above which is:
Net = Gross – (tax + health insurance premium + 401 K + Flex acccount + Other deductions),
then my savings rate will go as high as 57%.
an
May 24, 2010 @
4:58 PM
nla wrote:
Net = Gross – (tax [quote=nla]
Net = Gross – (tax + health insurance premium + 401 K + Flex acccount + Other deductions),
then my savings rate will go as high as 57%.[/quote]
Sorry for the confusion. When I say net, I mean this definition of net I quoted you on.
DWCAP
May 24, 2010 @
3:42 PM
sdcellar wrote:
With regard [quote=sdcellar]
With regard to net take home for someone at $150K it’s generally between $8K to $9K depending on their tax situation.[/quote]
Assuming the high number there, we are talking about a net income of 9k/month for a family of 2 people, more likley 3-4. At 50% savings, these people are saving $4500/month.
Now, assume just normal expenses of 3k a month for food, transportation, clothing, health care, utilites, kids school stuff, vacation, etc etc etc. Just the basic necessities of living, outside of shelter. (Does anyone disagree with that number? I dont think that seems too high for a HH of >2, but let me know.)
That leaves $1500 for shelter. Totally doable, even in SD. But that isnt gonna be much. A condo, maybe a small rental house in older areas. Now again I ask, how many people, making a HH income of greater than 150k, WELL into the top 10% of households in the county, are gonna wanna live in a place for $1500/month?
I am not saying this isnt impossible, or even that it isnt happening. We have proof right here that it is. I am just saying that it is a total outlier in our general population. So often we like to think piggington is a microcosem of the larger world, and yet this would show that we are anything but when 18% of us fall in this group.
carlsbadworker
May 24, 2010 @
4:03 PM
DWCAP wrote:
Assuming the [quote=DWCAP]
Assuming the high number there, we are talking about a net income of 9k/month for a family of 2 people, more likley 3-4. At 50% savings, these people are saving $4500/month.
Now, assume just normal expenses of 3k a month for food, transportation, clothing, health care, utilites, kids school stuff, vacation, etc etc etc. Just the basic necessities of living, outside of shelter. (Does anyone disagree with that number? I dont think that seems too high for a HH of >2, but let me know.)
That leaves $1500 for shelter. Totally doable, even in SD. But that isnt gonna be much. A condo, maybe a small rental house in older areas. Now again I ask, how many people, making a HH income of greater than 150k, WELL into the top 10% of households in the county, are gonna wanna live in a place for $1500/month?
I am not saying this isnt impossible, or even that it isnt happening. We have proof right here that it is. I am just saying that it is a total outlier in our general population. So often we like to think piggington is a microcosem of the larger world, and yet this would show that we are anything but when 18% of us fall in this group.[/quote]
I would imagine that we just don’t have the right assumption about how much piggs make. Just use your example, if one spent $3K per month on expenses (which I think is reasonable) and $1.5K on shelter (which is completely reasonable in Temecula valley, and also reasonable for renters), one just needs to earn more than $9K per month after tax.
Less than 20% of the people saved 50% more of their net income, but could these 20% of the people simply making more than $9K per month after tax? I don’t think it is a far stretch, given that that would be the level of income I’d expect if people are considering buying houses in San Diego.
P.S. I haven’t read the forum for a while, and I just noticed this thread is the daughter of wealth distribution thread. I am definitely not trying to make the arguments go into cycle. 🙂
sreeb
May 24, 2010 @
8:15 PM
DWCAP wrote:sdcellar [quote=DWCAP][quote=sdcellar]
With regard to net take home for someone at $150K it’s generally between $8K to $9K depending on their tax situation.[/quote]
Assuming the high number there, we are talking about a net income of 9k/month for a family of 2 people, more likley 3-4. At 50% savings, these people are saving $4500/month.
Now, assume just normal expenses of 3k a month for food, transportation, clothing, health care, utilites, kids school stuff, vacation, etc etc etc. Just the basic necessities of living, outside of shelter. (Does anyone disagree with that number? I dont think that seems too high for a HH of >2, but let me know.)
That leaves $1500 for shelter. Totally doable, even in SD. But that isnt gonna be much. A condo, maybe a small rental house in older areas. Now again I ask, how many people, making a HH income of greater than 150k, WELL into the top 10% of households in the county, are gonna wanna live in a place for $1500/month?
I am not saying this isnt impossible, or even that it isnt happening. We have proof right here that it is. I am just saying that it is a total outlier in our general population. So often we like to think piggington is a microcosem of the larger world, and yet this would show that we are anything but when 18% of us fall in this group.[/quote]
You can live pretty much anywhere in San Diego and pay less than $1500 a month for housing if you bought 15+ years ago and didn’t take money out of your house. Having paid mine off with taxes capped by prop 13, I’m well below. In established older neighborhoods, this is pretty common.
bearishgurl
May 24, 2010 @
10:30 PM
sreeb wrote:You can live [quote=sreeb]You can live pretty much anywhere in San Diego and pay less than $1500 a month for housing if you bought 15+ years ago and didn’t take money out of your house. Having paid mine off with taxes capped by prop 13, I’m well below. In established older neighborhoods, this is pretty common.[/quote]
sreeb, you just bolstered what I have been trying to say here for the last week. I maintain that there are MANY TENS OF THOUSANDS of homeowners just like you in SD County as well as ALL counties in the state. This particular subset of owners needs far less income to enjoy a comfortable life and may actually HAVE less income but are the truly WEALTHY:)
All of this bubble-borrowing is a fairly recent phenomenon (6-7 yrs). Using one’s home as their personal ATM has been going on for a while longer, perhaps 20 yrs., but the amounts withdrawn grew so much larger during the last “bubble” period, due to loose lending stds.
A homeowner who “stayed out of the fray” while the world around them was refinancing and HELOCing and perhaps even accelerated principal or paid the loan off, such as yourself, seem to be the only ones still standing now with their heads above water, IMHO.
DWCAP
May 24, 2010 @
3:20 PM
There is no screening There is no screening criteria for Pigg other than the interest to be around and read. So I fully expect a significant percentage of posters to more fully reflect the ‘average’ american HH and save <10%. Especially with many piggs being young parents and new homeowners, I dont doubt that many would have trouble putting much away for retirment or a rainy day.
No you are not the only one counting retirment. 401k is retirment savings, and a major saving vehicle for most. I kinda wonder how many people are saving $ outside of the retirment programs. No 401k. No Roths or 529's. Cause every time I hear some poor FB trying to save their house, they talk about raiding the 401k. Usually they have pretty sizeable balances there, but little other liquid cash.
Also, are people counting returns on investment as savings? I dont, because usually that money is reinvested and could disappear right away if stock prices fall. Same as house appreciation. How many people thought they were getting rich cause their house was appreciating really really fast in 2001-2005? How did that turn out? The question in this thread is a yearly question IMO. How much is your net worth adjusting as a percentage of your income is totally different.
UCGal
May 23, 2010 @
7:02 AM
CA renter wrote:bearishgurl [quote=CA renter][quote=bearishgurl]
The only time I pay real money for lodging is to ski. I book ONLY thru craigslist from a private owner. I do NOT pay the typical 13% “room-tax.” I usually make a deal to use the owner’s “time-share week” by relieving them of their annual HOA fee and taxes for their 1/52 “fractional interest.” That is ALL because they are UNABLE TO USE IT THIS YEAR so I am doing them a FAVOR!!
[/quote]
Great idea on the timeshare, bearishgurl![/quote]
We’ve been doing this for years… Not always timeshares, but doing weekly vacation apartment/house rentals. It’s a MUCH better way to travel if you have kids – less per night with more space. And who wants to take kids to a restaurant for breakfast for every day of a vacation… We spent half what my sister paid on Kauai 2 years ago – they were in a non-ocean front room, we had a 2 bedroom ocean front condo. Our trips to Cabo – we always rent someone elses timeshare. Way cheaper, same resort.
The only time I pay real money for lodging is to ski. I book ONLY thru craigslist from a private owner. I do NOT pay the typical 13% “room-tax.” I usually make a deal to use the owner’s “time-share week” by relieving them of their annual HOA fee and taxes for their 1/52 “fractional interest.” That is ALL because they are UNABLE TO USE IT THIS YEAR so I am doing them a FAVOR!!
[/quote]
Great idea on the timeshare, bearishgurl![/quote]
We’ve been doing this for years… Not always timeshares, but doing weekly vacation apartment/house rentals. It’s a MUCH better way to travel if you have kids – less per night with more space. And who wants to take kids to a restaurant for breakfast for every day of a vacation… We spent half what my sister paid on Kauai 2 years ago – they were in a non-ocean front room, we had a 2 bedroom ocean front condo. Our trips to Cabo – we always rent someone elses timeshare. Way cheaper, same resort.[/quote]
How do you know that people on Craigslist are on the up and up? have you ever been “taken”??
danielwis
May 24, 2010 @
6:58 PM
Haha, I’m a cheapskate too! Haha, I’m a cheapskate too! I also reuse aluminum foil! I also reuse ziplock bags, plastic wear, etc. I am in the greater than 50 % group, just starting this year. House, car….paid off. No credit card or other debt. Life is good, but then health issues pop up….. sucks. Enjoy life responsibly folks!
bearishgurl
May 24, 2010 @
10:08 PM
danielwis wrote:How do you [quote=danielwis]How do you know that people on Craigslist are on the up and up? have you ever been “taken”??[/quote]
Hijack: No, I have never been taken, danielwis. I have been selling and buying on the internet for over six years.
For use of another’s timeshare, I typically deal with SF Bay area ads. This region is extremely familiar and comfortable with craigslist (even the sr. citizens). The calibur of sellers of resort timeshares is very high . . . highly educated, successful and usually owners of many timeshares and other properties. The bulk of them are just trying to “roll along” thru the year if they cannot use this particular unit – basically “break even.”
If I am interested in someone’s advertised week, I contact them and verify their annual expenses. I then contact the timeshare itself and verify the owner’s size of unit and annual expenses. This info is all public because the TS mgmt. forever trying to “sell” timeshares, even peddle “resales.” I would not paypal the $$ to an advertiser whose name and phone number did not match that of the named owners by the timeshare mgmt. office.
One year I even “sublet” 3 days of a San Jose family’s timeshare to another family in Palo Alto (on SF Craigslist), cleaning and restocking the unit myself after 4 days because I couldn’t stay the whole week. The P.A. family was happy to get it and there was even better snow for them than for me . . . LOL. They called mgmt to verify that I had given them THEIR names to be checking in on a certain date. LOTS OF PEOPLE DO THIS — THE PARENTS OF THIS FAMILY BOTH POSSESSED DOCTORATES AND WERE BUS. OWNERS.
IMO, even people who can presumably AFFORD to pay exorbitant ski-lodging prices are reluctant to . . . and have a Paypal acct. and search Craigslist for a better deal.
Oftentimes the TS mgmt. will try to get the “guest” to devote a day or a few hours to their “timeshare spiel.” I always have pre-purchased lift tickets and decline their offer.
I can usually get the TS for one week for the same price it would cost to rent the unit directly form TS mgmt for 2.5 – 3 days. In addition, the “13.5% room-tax” is eliminated.
When purchasing an owner’s 1/52 usage, you as a buyer have to be willing to take the whole week. Also, the owner themselves has to call the timeshare and tell them the names of their “guests” and when they will be checking in.
Which begs the question. Why would anyone spend $15-20K on a ski area timeshare when they can just pay someone else’s annual HOA and taxes and use theirs without ANY initial investment??
I also favor renting private cabins or small houses off craigslist. I don’t care about dated decor as long as it’s warm, has enough beds, a hot tub and I can cook in it. These will usually have the room tax added, however, if they’re managed professionally.
nla
May 23, 2010 @
9:42 AM
Last Year – It’s about Last Year – It’s about 31%
This year up to end of April – 33%
We’re frugal but not cheap. Me and my wife both drive luxury cars (both paid off) and shop designer stuff once in a while.
sdcellar
May 24, 2010 @
11:02 AM
DWCAP, I think you’re right DWCAP, I think you’re right on the money and again, it’s all in the context. Your context is one of several that seem entirely plausible to me.
If I read you correctly, we also agree that there are a number of other contexts where high percentage savings rates seem much less plausible.
sdduuuude
May 24, 2010 @
3:20 PM
How do you define “net How do you define “net income” ? What expenses do I subtract from my gross income to determine this? Should I subtract taxes? Too much accounting for me. I’ll abstain.
an
May 24, 2010 @
3:58 PM
sdduuuude wrote:How do you [quote=sdduuuude]How do you define “net income” ? What expenses do I subtract from my gross income to determine this? Should I subtract taxes? Too much accounting for me. I’ll abstain.[/quote]
I want to keep it simple, so just take your biweekly paycheck, multiply by 26 and divide by 12. I’d consider that as your net income. Again, this is not supposed to be that detailed. Just a general idea.
[quote=DWCAP]Now, assume just normal expenses of 3k a month for food, transportation, clothing, health care, utilites, kids school stuff, vacation, etc etc etc. Just the basic necessities of living, outside of shelter. (Does anyone disagree with that number? I dont think that seems too high for a HH of >2, but let me know.)[/quote]
Wow, $3k is actually quite a lot in my eye. My range is $1k-3k, with the average being around $1800-2000, depending on how much (one time expense) I have that month. I haven’t bought clothes in a few years and when I do, I only buy stuff that’s at least 50% off. My jeans are all under $25 with a lot being under $10, my polos are under $15. I don’t go on vacation until my vacation fund is filled up (i.e. set a side money every month for vacation and when that reach a certain amount to go on vacation, then I go).
$1500 for shelter is low for me too. But $2000 for shelter should give you a decent house in decent areas. If you can reduce your $3000 expense down to $2500/month, then you can get a $2000/month house payment.
I do agree that a lot of Piggs (at least one one that voted) are not your average American who don’t save.
CA renter
May 24, 2010 @
4:32 PM
Just wanted to respond with Just wanted to respond with some other possible reasons for the under 10% savings rate.
If a couple has a defined benefit pension plan (or two) and had saved up much more before kids, then they wouldn’t need to save as much when their kids are little. Also, things like inheritance, investment/passive income, etc. can all throw the numbers off a bit.
BTW, I also missed the NET income part, so we’re probably in the 15-20% savings rate as well.
scaredyclassic
May 24, 2010 @
4:48 PM
combined my wife and i make combined my wife and i make over 200k, (I’m most of the income), and we live ina rental for $1,700/month. And that’s the most we’ve ever paid for a rental.
UCGal
May 24, 2010 @
7:31 PM
AN wrote:
I want to keep it [quote=AN]
I want to keep it simple, so just take your biweekly paycheck, multiply by 26 and divide by 12. I’d consider that as your net income. Again, this is not supposed to be that detailed. Just a general idea.
[/quote]
By that definition my “net” is way out of wack. My 401k is part of my savings but not included in that “net”.
I also do a dependant care account that covers after school programs and summer daycare on a pre-tax basis… but by your definition that’s not part of the calculation?
And I have an employee stock purchase plan – that’s 10% taken out of my paycheck up front, for a chance to buy stock at a discount twice a year… How is that NET?
So – just with this stuff, and taxes – my “net” is under half of my gross… but I get some of it back during the year (DCA and stock purchase).
I guess I don’t see the validity of the poll if it’s based on net… Gross would be much more telling.
carlsbadworker
May 24, 2010 @
8:39 PM
I agree with UCGal that this I agree with UCGal that this is a flawed poll, that’s why I never casted my vote.
Ricechex
May 25, 2010 @
12:32 AM
How I came up with my How I came up with my numbers:
14% to retirement, automatically deducted from check, pre tax (get 5% matching, but did not calculate this in, because it is not “me” saving it, it is the employer)
Took net pay, and calculated dollars saved per month. Added the 14% + what percent was savings per month based on net and came up with final number, around 30-40%. (admittedly it should be 50%, but it is nice to be able to do stuff when one wants too…)
Note: Live in a rental house for 10 years and rent has never been raised. Live with BF who also pays 1/2 rent/bills.
Of course, when this gravy train runs out..things could change drastically.
May 22, 2010 @ 3:55 PM
From the wealth distribution
From the wealth distribution thread, it seams like saving $4k/month for those making $150k/yr.sos unrealistic. So, how much do Piggs save? Include IRA, 401k, 529, etc.
May 22, 2010 @ 6:24 PM
i think actually i save too
i think actually i save too much. i earn mid six figures, never go on vacation, iron my own shirts, drive old cars, never borrow on credit cards. I am cheap about all kinds of little things — wear suits a bunch before dry cleaning, split an entree with my wife (hey, they’re big!) drink cheap booze. It adds up. But sometimes I think I probably don’t consume enough. I may have a glut of savings.
May 22, 2010 @ 7:55 PM
scaredycat wrote:i think
[quote=scaredycat]i think actually i save too much. i earn mid six figures, .[/quote]
By mid 6 figures, you mean 500k/yr? You should be livin’ large!!
May 22, 2010 @ 8:11 PM
scaredycat wrote:i think
[quote=scaredycat]i think actually i save too much. i earn mid six figures, never go on vacation, iron my own shirts, drive old cars, never borrow on credit cards. I am cheap about all kinds of little things — wear suits a bunch before dry cleaning, split an entree with my wife (hey, they’re big!) drink cheap booze. It adds up. But sometimes I think I probably don’t consume enough. I may have a glut of savings.[/quote]
Scaredycat, there’s nothing wrong with any of that. Credit cards are nice to earn Rewards Pts. off of (earned [and used] 3 RT flights in the last yr) and “float somebody else’s money” for 3-4 weeks. That’s about it. Never in my life have I carried a balance. He!!, I even reuse alum. foil and napkins if they didn’t get used and put plastic “silverware” in my DW!! Even though I am a highly trained wine steward from way back when and grew up near the “wine country” (can `taste’ with the best of them) – I still drink boxed wine. Guess you could call me a “cheap date” – LOL! Yes, restaurant meals have gotten crazy exp. over the years and also “huge.” There’s nothing wrong with splitting an entree.
Ever heard of Dryel?? I use it b/c all my business clothes are dry-clean. It works well using it in place of skipping at least one dry-cleaning.
All the above exp. you mentioned that you are frugal on are a complete waste of money, anyway, IMO.
May 22, 2010 @ 8:15 PM
Just shy of 20%.
Just shy of 20%. 401k/IRA/529 taking the bulk of it. This does not include other measures that are ‘like money in the bank’ – like extra principal payments to pay off the house sooner.
I’m not quite as frugal as scaredy – but we’re pretty darn cheap. No housekeeper or gardener – unless you consider paying the kids to pull weeds). We eat at home, brown bag it for lunch at work, etc. (Fortunately, both my hubby and I enjoy cooking – so we’re not suffering from lack of good food.) We have cars that we paid cash for… living with out servicing debt saves a LOT of money – allowing for more savings.
May 22, 2010 @ 8:33 PM
Not sure how to calculate
Not sure how to calculate this since I’m self employed and contribute to a 401k and also pay a profit sharing bonus to myself out of the company equal to my 401k contribution(that also goes into 401k)–actually it’s a Keogh…but same difference.
Total between the two is about 15% of my gross.
I save 1% of the cost of my house annually for ongoing maintenance. This means: need new roof, washer dies and need a new one, toilet breaks and needs to be fixed. It is ONLY used for unexpected or ongoing maintenance of the property not for decorating, remodeling or anything else.
In addition to this I save about 1% of my net income into a savings account on a monthly basis. This is used for random stuff: vacations, new tv, etc.
I’ve also been fortunate to have excess ‘profit’ from my business over the last 5 years. The amount per year varies considerably but is generally 10% of my gross. This all goes into a money market account (more saving). It’s this money that I’m using to pay for my current home remodel.
I consider myself a pretty good saver, especially in comparison to the vast majority of the people in this country. I could cut alot of waste from my spending (eating out alot) if I needed to but considering how much I already save I don’t beat myself up too much over it.
I’m all cash, all the time. If I can’t pay for it with cash I don’t buy it. My only debt now is my mortgage; paid the car off this year. In fact, I’m now socking away the payment I had on the car into another savings account so when the time comes to replace my current vehicle I’ll be able to pay for it in cash.
May 22, 2010 @ 8:33 PM
It is not “cheap” to me…it
It is not “cheap” to me…it is about utiizing what we have and being conservative. I re-use old jars, aluminum foil, gift wrap, coffee cans, plastic silverware. At restaurants when the server brings an excess of napkins and little plastic packets of condiments, I always take them home or put them back for concern they will get thrown away. (not a hoarder….it is just hard to trash things without good reason.)
Cheap is when you go to a restaurant with others and you short your part of the bill, and/or the server.
Unfortunately, our society has given us the message that we must consume endlessly, otherwise that is cheap.
May 22, 2010 @ 9:04 PM
Oh, and Scaredy, you say you
Oh, and Scaredy, you say you never go on vacation. That’s just . . . sad. I do – at least 4x per yr. I stay at friend’s/relative’s homes, volunteer to buy groceries and/or contribute to their potluck and help with setup/cleanup, etc. Sometimes I stay in 6-8 homes on one road trip. If I have to end up staying in a BW Motel “in-transit” somewhere, I’m sure da*n-well going to get some points for that AND a free breakfast.
The only time I pay real money for lodging is to ski. I book ONLY thru craigslist from a private owner. I do NOT pay the typical 13% “room-tax.” I usually make a deal to use the owner’s “time-share week” by relieving them of their annual HOA fee and taxes for their 1/52 “fractional interest.” That is ALL because they are UNABLE TO USE IT THIS YEAR so I am doing them a FAVOR!!
Scaredy, if you plan ahead, you would be shocked at how cheap a great vacation can really be. I’m sure you must be aware that there is more than one way to skin a cat – LOL!
May 22, 2010 @ 10:54 PM
bearishgurl wrote:
The only
[quote=bearishgurl]
The only time I pay real money for lodging is to ski. I book ONLY thru craigslist from a private owner. I do NOT pay the typical 13% “room-tax.” I usually make a deal to use the owner’s “time-share week” by relieving them of their annual HOA fee and taxes for their 1/52 “fractional interest.” That is ALL because they are UNABLE TO USE IT THIS YEAR so I am doing them a FAVOR!!
[/quote]
Great idea on the timeshare, bearishgurl!
May 23, 2010 @ 12:26 AM
i meant mid 100’s, not mid
i meant mid 100’s, not mid six figures. i don’t go on vacation because
(i) it costs income i could have earned if I stuck around and
(2) i don’t have fun
(3) i cannot relax away from home
(4) i take a break at the end of the week during the weekend and
(5) there’s nowhere to go, really, since i believe everywhere is essentially the same and
(6) I have a certain routine which would be interrupted and
(7) i need to eat specific things which wont be available elsewhere maybe so it’s all very risky and
(8) it gives me a headache to transport children far from home and
(9) we pay a lot of money to rent this place, so we might as well stay here and
(10) I just don’t feel like it.
but if i earned 500,000 a year, that would be 10k a week? no way i’d take a week off! probably don’t want to die with too uch cash int he bank. but frankly, what is worth consuming? not much. good dental floss, for one. that’s well worth it. also, fresh limes for cheap mixed drinks. very worth it. i tried dryel and i’d rather wear the suit 5-10 more times and spring for the cleaning.
May 23, 2010 @ 1:09 AM
budgeting is so boring and
budgeting is so boring and deadening. i think it’s better to just plan to spend virtually nothing.
May 23, 2010 @ 7:08 AM
Seems to be pretty evenly
Seems to be pretty evenly divided between the different break down. Savers are definitely not atypical among Piggs.
May 23, 2010 @ 8:47 AM
AN wrote:Seems to be pretty
[quote=AN]Seems to be pretty evenly divided between the different break down. Savers are definitely not atypical among Piggs.[/quote]
I’m actually surprised by how many <10%ers there are on this forum, I was expecting the majority to be in the 20-30% or 30-40% range.
May 23, 2010 @ 8:57 AM
8bitnintendo wrote:AN
[quote=8bitnintendo][quote=AN]Seems to be pretty evenly divided between the different break down. Savers are definitely not atypical among Piggs.[/quote]
I’m actually surprised by how many <10%ers there are on this forum, I was expecting the majority to be in the 20-30% or 30-40% range.[/quote]
I'm actually surprised by that number too. Because of the conversation we had in the wealth distribution thread, I wasn't expecting this many 30%+ either. I thought the bulk would be between 10-30%.
May 23, 2010 @ 12:32 PM
8bitnintendo wrote:I’m
[quote=8bitnintendo]I’m actually surprised by how many <10%ers there are on this forum, I was expecting the majority to be in the 20-30% or 30-40% range.[/quote]
I have not been able to save much in recent years because I am HH w/one still-minor child, which I must maintain a home for so I did not vote.
This takes us back to the income/wealth arguments. One cannot typically withdraw tax-free savings (without great penalty) until age 59.5. I'm not quite there yet. When I get there, I have no worries. That's all I can say here.
May 23, 2010 @ 1:07 PM
scaredycat wrote:i meant mid
[quote=scaredycat]i meant mid 100’s, not mid six figures. i don’t go on vacation because
(i) it costs income i could have earned if I stuck around and
(2) i don’t have fun
(3) i cannot relax away from home
(4) i take a break at the end of the week during the weekend and
(5) there’s nowhere to go, really, since i believe everywhere is essentially the same and
(6) I have a certain routine which would be interrupted and
(7) i need to eat specific things which wont be available elsewhere maybe so it’s all very risky and
(8) it gives me a headache to transport children far from home and
(9) we pay a lot of money to rent this place, so we might as well stay here and
(10) I just don’t feel like it.
but if i earned 500,000 a year, that would be 10k a week? no way i’d take a week off! probably don’t want to die with too uch cash int he bank. but frankly, what is worth consuming? not much. . . . [/quote]
Scaredy, I’m sensing signs of depression from your post. As someone who has been to 16 family funerals since 1992 (decedents aged 38-73), I have undergone a change in philosophy over the years. I used to be very career-oriented and did not want to miss work just in case I missed out on the latest event, gossip, etc. After losing a younger sibling suddenly at the age of 46 (a multimillionaire, workaholic and consummate planner who did everything right), I realized we all have little control over our futures.
You can bring your own food and eat it wherever you go. Have you considered driving up to Napa or Mendocino County for a few days and boarding the Skunk Train??
http://www.skunktrain.com/choose-a-trip-june-sept.html
Put a bike carrier on your car and take your bikes with you – the trails are awesome!!
Or how about a retreat near Mt. Shasta? If you have kids, find a relative to dump them on and go with your spouse.
http://www.mtshastagatehouseretreat.com/
http://www.healingretreat.com/
http://www.shastamountinn.com/
Life can be short, Scaredy. Take time to smell the roses. You can do this for free across from the zoo or walking in Coronado.
Don’t worry about the economy in SD. It will all be here waiting when you get back :]
May 23, 2010 @ 1:13 PM
bearishgurl, I agree with you
bearishgurl, I agree with you that life can be short. It just seems to me like what’s scardy is doing actually make him happy. It’s just not what would make you or me happy. I do like to travel, just like you, so I know exactly what you’re saying.
May 23, 2010 @ 1:33 PM
I find this poll interesting,
I find this poll interesting, but mostly useless without context.
I have to say, I expected the Pigg faithful to be better than average savers, but I’m surprised how many are saving so much.
I maybe have this wrong, but the national average is around 5%?
May 23, 2010 @ 1:46 PM
sdcellar wrote:I find this
[quote=sdcellar]I find this poll interesting, but mostly useless without context.
I have to say, I expected the Pigg faithful to be better than average savers, but I’m surprised how many are saving so much.
I maybe have this wrong, but the national average is around 5%?[/quote]
Isn’t the national saving rate negative?
May 23, 2010 @ 2:24 PM
I actually mean the personal
I actually mean the personal savings rate, nationally. The national savings rate is something else and yes, last I heard, it was negative.
May 23, 2010 @ 2:49 PM
AN wrote:sdcellar wrote:I
[quote=AN][quote=sdcellar]I find this poll interesting, but mostly useless without context.
I have to say, I expected the Pigg faithful to be better than average savers, but I’m surprised how many are saving so much.
I maybe have this wrong, but the national average is around 5%?[/quote]
Isn’t the national saving rate negative?[/quote]
Q1 savings rate is just over 3%. It was up at ~5.5% in sept 09, but is falling pretty steady now.
I am not supprised at the <10% savers here. With kids and houses and everything else in todays life, a 10% savings rate isnt bad. If all Americans could pull that off we wouldnt be in the mess we are in today.
Rather the number of >50% savers caught my eye. Something unusual is going on there. Either they are the top 1% of households income wise, they make very little and are getting the $$$ from somewhere unusual (like gifts or inheritances or divendens… etc) or are somehow able to shift expenses onto someone else (kids living at home….).
Let me break my surpise down this way. Let say you made 100k year (just a nice number; married filing jointly; adjusted income), by my calculations you would be taking home ~70k year after income taxes and SS and medicare and state taxes and everything else. To be saving over 50% of net income, someone in these shoes would have to be saving >35k/year, and living on <35k. Sure, you can live on 3k a month after taxes. I dont doubt it. But I am suprised how many people with incomes of over 100k/year (adjusted) want to.
Also, are people including their employer 401k match and bonus's in the savings rate, but not in the income? We can do that, but it may be a point of discrepency that I am missing. (I caught myself doing this)
Just to clarify, I am a 40% saver. I am not saying it isnt happening. I am just supprised at the numbers of people who are ahead of me. What a freaky subset of the population this site is.
May 23, 2010 @ 3:00 PM
oh yes, i’m depressed, many
oh yes, i’m depressed, many years on zoloft, but i stopped. I just am this way. taking a vacation isn’t going to help. I am just this way; my people have been this way for generations back.
some people are just depressed. like eeyore. you think a vacation’s going to help eeyore? please.
. you just have to embrace who you are and stumble along.
exercise is the only things that lifts my spirits, but “vacations” interfere with that terribly (travel time, maneuvering. best to be home if youw ant to get your regular hour run in….a change in scenery can be achieved by running that same loop in the other direction…
May 23, 2010 @ 3:38 PM
DWCAP, is tax for $100k that
DWCAP, is tax for $100k that high?
May 23, 2010 @ 3:59 PM
It isnt just income tax, add
It isnt just income tax, add in Social security, Unemployment, Medicare, CA income taxes. It all adds up.
May 23, 2010 @ 4:03 PM
I see. That makes sense.
I see. That makes sense.
May 23, 2010 @ 4:55 PM
DWCAP wrote:It isnt just
[quote=DWCAP]It isnt just income tax, add in Social security, Unemployment, Medicare, CA income taxes. It all adds up.[/quote]
DWCAP, not to be singling you out, but Medicare tax is only charged against the wages of workers who are over the age of 45.
Any HR Piggs here?? Correct me if I’m wrong.
May 23, 2010 @ 6:55 PM
bearishgurl wrote:DWCAP
[quote=bearishgurl][quote=DWCAP]It isnt just income tax, add in Social security, Unemployment, Medicare, CA income taxes. It all adds up.[/quote]
DWCAP, not to be singling you out, but Medicare tax is only charged against the wages of workers who are over the age of 45.
Any HR Piggs here?? Correct me if I’m wrong.[/quote]
You just lost all credibility with that comment. 100% false. Where did you even come up with that? Medicare tax of 1.45% is charged on all wages – it’s part of the 7.65% FICA.
May 23, 2010 @ 7:19 PM
waiting for bottom
[quote=waiting for bottom][quote=bearishgurl]Any HR Piggs here?? Correct me if I’m wrong.[/quote]
You just lost all credibility with that comment. 100% false. Where did you even come up with that? Medicare tax of 1.45% is charged on all wages – it’s part of the 7.65% FICA.[/quote]
waiting for bottom, this is why I was asking for clarification from a qualified HR person. I had a stint in the ’80’s for a year as a payroll clerk. I am fairly certain that Medicare tax did not kick in until the employee reached the age of 45, at that time. I have not been a W-2 employee for quite some time.
Perhaps the law was changed and this deduction was merged in with the FICA ded?? It used to be separate. I do not know when this change occurred.
May 23, 2010 @ 5:06 PM
DWCAP wrote: . . . Sure, you
[quote=DWCAP] . . . Sure, you can live on 3k a month after taxes. I dont doubt it. But I am suprised how many people with incomes of over 100k/year (adjusted) want to. . . [/quote]
Like sdcellar, my BS meter starts to go thru the roof when I read stuff like this . . . LOL.
DWCAP, IMHO, you can’t “live on 3K a month after taxes” as a homeowner in this county unless you can meet all of these criteria:
1) You purchased your home more than ten years ago for no more than $330K and did not take out a purchase $ loan of more than about $230K (prime/NOT sub-prime), fully amortized, made all payments and did not borrow anymore $$ from the property;
2) You DO NOT have any expenses for children;
3) You have xeriscape/dirt/rocks/weeds and have turned off your sprinkler system;
4) Your veh(s) are pd. for and you do NOT have any credit card debt or other consumer loan debt;
5) You do NOT have any student loan debt;
6) Your mo. gasoline bill does not exceed $200;
7) You don’t subscribe to any movie channels, DVR, etc. in your cable pkg;
8) If living out of City of SD, you have the 40 gal. only trash p/u service (90 gal. can is 3x the cost);
9) Your avg. SDGE bill year/round is $55 or less (read: blanket, sweater and fan usage);
10) You use coupons for groceries whenever possible;
11) Your water bill qualifies you for a baseline sewer rate (abt. $44 bimonthly);
12) You bum clothes for free from friends, etc., buy used clothing, or only shop clearance sales w/coupons (occasionally);
13) You never eat out, unless you have a coupon for Subway and someone to split the bill with;
14) You cut your own hair and dry clean your own clothes;
15) An employer or union/retirement assn. is paying all or the bulk of your health/life prems;
16) You never travel, unless its in someone else’s car (and they don’t want any gas $$) and you stay at someone else’s home;
17) You don’t give gifts on holidays or b-days;
18) No unexpected major car repairs befall you;
19) No unexpected major home repairs befall you;
20) Your property is not in a fire/flood zone, (neccesitating higher ins. prems.) and you have a $1000 + ded.;
21) Everyone in your family is over 25 and has a good driving record so you can get a good auto ins. prem. with $1000+ ded.;
22) You check all books/DVDs out of the library instead of renting/buying;
23) You have a “voice-only” cellphone;
24) You have NO MR on your property to pay or HOA/street bonds to pay every month, etc. . .
Sound Harsh??? Remember, as a homeowner, you “get” to pay PROPERTY TAXES, due April and December and your Homeowner Ins. Prem., due once per yr. Take that chunk out of your $36K net and carefully examine what you’re left with to live on!!!
If you are living in a free and clear property with Prop. 13 tax treatment, this is entirely possible, IMO.
I try to use the mil. commissary for groceries as often as I can and NO WAY could I live off a 36K annual net income . . . and I’m as frugal as they come – LOL 🙂
May 23, 2010 @ 5:13 PM
bearishgurl,
I am not sure
bearishgurl,
I am not sure what you are getting at here. I never talked about either 1) the fact that I do that or 2) that someone who is living this way will own a house.
If anything your post only adds to my argument, most people making high income wont want to live that way.
May 23, 2010 @ 6:22 PM
bearishgurl wrote: . . . and
[quote=bearishgurl] . . . and I’m as frugal as they come – LOL :)[/quote]
That’s a very big claim. I call BS.
May 23, 2010 @ 6:51 PM
bearishgurl wrote:DWCAP
[quote=bearishgurl][quote=DWCAP] . . . Sure, you can live on 3k a month after taxes. I dont doubt it. But I am suprised how many people with incomes of over 100k/year (adjusted) want to. . . [/quote]
Like sdcellar, my BS meter starts to go thru the roof when I read stuff like this . . . LOL.
DWCAP, IMHO, you can’t “live on 3K a month after taxes” as a homeowner in this county unless you can meet all of these criteria:
………………….
:)[/quote]
The mistake you are making here is you are putting yourself into the situtation, and not seeing how you could do it. I use to live on far less than 3k a month here in SD, in 2006. And I managed to save money doing it. Not alot but I did. Here is how.
1) I have no debt. No college loans. Car is paid off. No credit card debt.
2) I am single. I AM NOT A HOMEOWNER I had roommates to defray the costs. I didnt share a room, but it was 4 guys in a 4 bed duplex. $650/month room/utilities/cable.
3) I got a signing bonus. This paid for all the little stuff to get me started.
4) 100% employer paid health care.
5) Jeans and polo shirt work place.
6) <15 mile commute.
7) Dinner out was pizza, then the bar.
etc etc etc.
In 2006, the year I moved to SD, I made just north of 45k PRETAX, and managed to save 5k cash and 4K in my 401k. My paychecks were running about 2500/month, and my expenses were ~2000/month. So, yes, you can live in San Diego for less than 3k month pretax. I did it. You cant raise a family and own a house and such, but at 24 who cares? That wasnt the point.
Sorry to set off your BS meter, I think it needs to be calibrated to what I actually said.
May 23, 2010 @ 7:26 PM
DWCAP wrote:Sorry to set off
[quote=DWCAP]Sorry to set off your BS meter, I think it needs to be calibrated to what I actually said.[/quote]
DWCAP, I was only thinking in the context of most of the Piggs posting on this thread and the “wealth distribution” thread it started on, who were trying to pay all of the above-mentioned monthly bills and THEN some, while presumably raising a family.
Of course a tenant would be able to live off $3K a month – maybe even a “frugal” parent 🙂
May 23, 2010 @ 7:45 PM
Correction, my mistake.
Correction, my mistake. Medicare tax of 1.45% of gross pay was a separate deduction (found checkstubs from back when I was under the age of 45).
The deduction that took place starting at the age of 45 was the biweekly EMPLOYEE CONTRIBUTION of the defined benefit plan.
This does not apply to employers which do not offer a defined benefit retirement plan.
Sorry for any confusion.
May 24, 2010 @ 12:24 AM
deleted
deleted
May 24, 2010 @ 9:27 AM
I think I am in the 30-40%
I think I am in the 30-40% range, but since the question was percentage of NET income, I’d have to review tax records and such to be sure.
May 24, 2010 @ 10:00 AM
FormerSanDiegan wrote:I think
[quote=FormerSanDiegan]I think I am in the 30-40% range, but since the question was percentage of NET income, I’d have to review tax records and such to be sure.[/quote]
Doh – I just noticed it said NET income.
My percentage just went up .
The bulk of my savings is in 401k (pre-tax) and IRA (hubby doesn’t have 401k but is old so he can do pretty big IRAs) I also do annual infusions to the kids 529’s. All of that is savings. Some of it is pre-tax, though.
It’s a higher percentage as NET income… I’ll have to check my turbo tax summary and do some calcs.
May 23, 2010 @ 7:35 PM
DWCAP wrote:
Rather the
[quote=DWCAP]
Rather the number of >50% savers caught my eye. Something unusual is going on there. Either they are the top 1% of households income wise, they make very little and are getting the $$$ from somewhere unusual (like gifts or inheritances or divendens… etc) or are somehow able to shift expenses onto someone else (kids living at home….).
Let me break my surpise down this way. Let say you made 100k year (just a nice number; married filing jointly; adjusted income), by my calculations you would be taking home ~70k year after income taxes and SS and medicare and state taxes and everything else. To be saving over 50% of net income, someone in these shoes would have to be saving >35k/year, and living on <35k. Sure, you can live on 3k a month after taxes. I dont doubt it. But I am suprised how many people with incomes of over 100k/year (adjusted) want to.
Also, are people including their employer 401k match and bonus's in the savings rate, but not in the income? We can do that, but it may be a point of discrepency that I am missing. (I caught myself doing this)
Just to clarify, I am a 40% saver. I am not saying it isnt happening. I am just supprised at the numbers of people who are ahead of me. What a freaky subset of the population this site is.[/quote]
I think it really comes down to the mindset. If you're a natural saver, I don't think it would be much of a problem, but if you're not, it's quite hard, if not impossible. I myself don't want to live under $35k/yr. However, I know two couples who are (by my guess) living under $35k/yr and they make north of $200k/yr. They seem perfect happy living their current life style. They don't have cable, they don't have cellphone bill, one wear hand me down from their kids, while the other keep only one light source on at a time and turn off water heater when they leave for work. So, by their standard, I'm not even close to being frugal. I admire their ability to live that life style while making that much money. They on the other hand can't see themselves spending anymore money.
May 24, 2010 @ 10:03 AM
DWCAP wrote:
I am not
[quote=DWCAP]
I am not supprised at the <10% savers here.
[/quote]
Color me confused... wouldn't most Piggs be the type to max out their 401k - at least 10% right there.
Am I the only one considering retirement savings part of the overall savings?
May 24, 2010 @ 10:08 AM
UCGal wrote:
Am I the only
[quote=UCGal]
Am I the only one considering retirement savings part of the overall savings?[/quote]
No, I considered ALL my saving..retirement and everything else.
May 24, 2010 @ 10:40 AM
UCGal wrote:
Color me
[quote=UCGal]
Color me confused… wouldn’t most Piggs be the type to max out their 401k – at least 10% right there.
Am I the only one considering retirement savings part of the overall savings?[/quote]
I would assume most Piggs are very conservative with their money. This poll shows it. But according to some poster, those who are in the >50% are either BSing or are super wealthy. Piggs are definitely not your average American with regards to saving.
You are not the only one considering retirement. I consider everything that’s not expense as savings. For those who make around $150k+, I assume their net take home should be around $9k-10k/month. So, how hard is it to live under $4500-5000/month?
BTW, I don’t intend this poll to be exact. An estimate should be good enough. I’m sure you have months where you save less due to housing remodel, Christmas, Birthday, etc. The there are months where you save more due to no big expense.
Last year, 401k limit is $16500. If a couple making $150k both max out their 401k, they really only need to save an extra $1000-1500/month to break the 50% mark.
May 24, 2010 @ 11:26 AM
AN, I guess I haven’t made
AN, I guess I haven’t made myself clear, but I believe a number of folks can save significant amounts (and a number who cant).
With regard to net take home for someone at $150K it’s generally between $8K to $9K depending on their tax situation. Not to nit pick, but a grand a month makes a big difference.
I agree that a goal for most people is to max out their 401(k), but that is a lot of work for a lot of people and anything beyond that is even harder, so it’s not entirely uncommon for it to pretty much stop there. Some may contribute additionally to college funds, but that’s also one of the tougher demographics to pull that off, so that is often limited to something lip service-y like a few grand a year.
Also, even though the limit might currently be $16.5K per individual, most plans have contribution limits at a percentage level. 15% is the highest I’ve ever been allowed to contribute, so in your couple example, you’re really capped at $11,250. So that’s just under $2K per month, a much more achievable (and believable) number.
Also, I said I was going to let you off the hook, but since you want to call me out again, BS on you, not so much on others.
May 24, 2010 @ 11:39 AM
sdcellar, I assume you’re
sdcellar, I assume you’re around $150k mark, so your number is probably much more accurate than mine. I just took my number and add a % on top of my net, the % would equal the % my gross would need to increase by to get to $150k.
I agree, it’s not easy to save/max out retirement. Hence our national savings rate is 0-5%. So, only a small group of people can do this. It just seem that Piggs have a very different demographic break down. I don’t know about you, but to me, I don’t even noticed about my retirement money. I.E. I don’t count that as income. I learn to live with what I get per paycheck. It might be different for you, but I have always been maxing out my 401k, from the very first day I start working full time. Back then, I was putting away 30%+. So, I’m quite surprise you experience a cap in %. I guess every company is different.
BTW, I wasn’t calling BS on you. Anyways, I already admitted that I was BSing about my saving and that I have huge credit card debt. I’m your typical American.
May 24, 2010 @ 12:08 PM
Yep, I think that’s the
Yep, I think that’s the easiest way to do it. Start early, max out, and you’ll never “miss” the income. Another good strategy for people who just can’t start at full contribution levels is to do the best they can and as they get raises, put as much of that as they can into their retirement, ideally all of it.
Also, just so I’m sure I’m understanding what you’re saying on a specific point, you worked for a company that had a 401k plan that let you contribute 30% of your gross salary?
May 24, 2010 @ 12:36 PM
sdcellar wrote:Yep, I think
[quote=sdcellar]Yep, I think that’s the easiest way to do it. Start early, max out, and you’ll never “miss” the income. Another good strategy for people who just can’t start at full contribution levels is to do the best they can and as they get raises, put as much of that as they can into their retirement, ideally all of it.
Also, just so I’m sure I’m understanding what you’re saying on a specific point, you worked for a company that had a 401k plan that let you contribute 30% of your gross salary?[/quote]
Yep, money that you don’t see, you won’t count on it. So if your company won’t let you max out your 401k, then you can max our your IRA as well.
You got that right sdcellar. At the time, I made $45k/yr. and the let me max out at $13k, iirc.
May 24, 2010 @ 3:01 PM
What percentage are you
What percentage are you allowed to contribute now?
May 24, 2010 @ 3:30 PM
sdcellar wrote:What
[quote=sdcellar]What percentage are you allowed to contribute now?[/quote]The 2010 limit for elective deferrals to a 401k (for employees under the age of 50) is $16,500, which is the same as it was for 2009. Plus $5,000 maximum to an IRA.
May 24, 2010 @ 3:39 PM
sdcellar wrote:What
[quote=sdcellar]What percentage are you allowed to contribute now?[/quote]
Right now, I’m at over 15% but less than 20%. I know other coworker who are more junior putting in over 20%.
May 24, 2010 @ 4:14 PM
401k has a cap of 16.5k/year.
401k has a cap of 16.5k/year. If you’re over 50 you can do more because of “catch up” contributions – current catch up limits are $5.5k on top of the 16.5k.
Percentage allowed to be contributed can vary by employer.
And there are extra rules for “highly compensated employees”. (I’m not in that category, so I don’t know them all.)
If you’re contributing the max federal – your actual percentage will be based on your salary… which will vary.
If you make 100k, you’d hit the max at 16.5% contributions
If you make 50k, you’d hit the max at 33% – probably higher than your plan allows.
May 24, 2010 @ 4:56 PM
AN wrote:I want to keep it
[quote=AN]I want to keep it simple, so just take your biweekly paycheck, multiply by 26 and divide by 12. I’d consider that as your net income. Again, this is not supposed to be that detailed. Just a general idea. [/quote]
AN. I think you need to properly define what “net” is.
The first time I post, I thought it was gross not net, so my saving rate came up for this year (up to end of April) to 33%.
If net = gross – tax, then my saving rate goes up to 41%.
By your definition above which is:
Net = Gross – (tax + health insurance premium + 401 K + Flex acccount + Other deductions),
then my savings rate will go as high as 57%.
May 24, 2010 @ 4:58 PM
nla wrote:
Net = Gross – (tax
[quote=nla]
Net = Gross – (tax + health insurance premium + 401 K + Flex acccount + Other deductions),
then my savings rate will go as high as 57%.[/quote]
Sorry for the confusion. When I say net, I mean this definition of net I quoted you on.
May 24, 2010 @ 3:42 PM
sdcellar wrote:
With regard
[quote=sdcellar]
With regard to net take home for someone at $150K it’s generally between $8K to $9K depending on their tax situation.[/quote]
Assuming the high number there, we are talking about a net income of 9k/month for a family of 2 people, more likley 3-4. At 50% savings, these people are saving $4500/month.
Now, assume just normal expenses of 3k a month for food, transportation, clothing, health care, utilites, kids school stuff, vacation, etc etc etc. Just the basic necessities of living, outside of shelter. (Does anyone disagree with that number? I dont think that seems too high for a HH of >2, but let me know.)
That leaves $1500 for shelter. Totally doable, even in SD. But that isnt gonna be much. A condo, maybe a small rental house in older areas. Now again I ask, how many people, making a HH income of greater than 150k, WELL into the top 10% of households in the county, are gonna wanna live in a place for $1500/month?
I am not saying this isnt impossible, or even that it isnt happening. We have proof right here that it is. I am just saying that it is a total outlier in our general population. So often we like to think piggington is a microcosem of the larger world, and yet this would show that we are anything but when 18% of us fall in this group.
May 24, 2010 @ 4:03 PM
DWCAP wrote:
Assuming the
[quote=DWCAP]
Assuming the high number there, we are talking about a net income of 9k/month for a family of 2 people, more likley 3-4. At 50% savings, these people are saving $4500/month.
Now, assume just normal expenses of 3k a month for food, transportation, clothing, health care, utilites, kids school stuff, vacation, etc etc etc. Just the basic necessities of living, outside of shelter. (Does anyone disagree with that number? I dont think that seems too high for a HH of >2, but let me know.)
That leaves $1500 for shelter. Totally doable, even in SD. But that isnt gonna be much. A condo, maybe a small rental house in older areas. Now again I ask, how many people, making a HH income of greater than 150k, WELL into the top 10% of households in the county, are gonna wanna live in a place for $1500/month?
I am not saying this isnt impossible, or even that it isnt happening. We have proof right here that it is. I am just saying that it is a total outlier in our general population. So often we like to think piggington is a microcosem of the larger world, and yet this would show that we are anything but when 18% of us fall in this group.[/quote]
I would imagine that we just don’t have the right assumption about how much piggs make. Just use your example, if one spent $3K per month on expenses (which I think is reasonable) and $1.5K on shelter (which is completely reasonable in Temecula valley, and also reasonable for renters), one just needs to earn more than $9K per month after tax.
Less than 20% of the people saved 50% more of their net income, but could these 20% of the people simply making more than $9K per month after tax? I don’t think it is a far stretch, given that that would be the level of income I’d expect if people are considering buying houses in San Diego.
P.S. I haven’t read the forum for a while, and I just noticed this thread is the daughter of wealth distribution thread. I am definitely not trying to make the arguments go into cycle. 🙂
May 24, 2010 @ 8:15 PM
DWCAP wrote:sdcellar
[quote=DWCAP][quote=sdcellar]
With regard to net take home for someone at $150K it’s generally between $8K to $9K depending on their tax situation.[/quote]
Assuming the high number there, we are talking about a net income of 9k/month for a family of 2 people, more likley 3-4. At 50% savings, these people are saving $4500/month.
Now, assume just normal expenses of 3k a month for food, transportation, clothing, health care, utilites, kids school stuff, vacation, etc etc etc. Just the basic necessities of living, outside of shelter. (Does anyone disagree with that number? I dont think that seems too high for a HH of >2, but let me know.)
That leaves $1500 for shelter. Totally doable, even in SD. But that isnt gonna be much. A condo, maybe a small rental house in older areas. Now again I ask, how many people, making a HH income of greater than 150k, WELL into the top 10% of households in the county, are gonna wanna live in a place for $1500/month?
I am not saying this isnt impossible, or even that it isnt happening. We have proof right here that it is. I am just saying that it is a total outlier in our general population. So often we like to think piggington is a microcosem of the larger world, and yet this would show that we are anything but when 18% of us fall in this group.[/quote]
You can live pretty much anywhere in San Diego and pay less than $1500 a month for housing if you bought 15+ years ago and didn’t take money out of your house. Having paid mine off with taxes capped by prop 13, I’m well below. In established older neighborhoods, this is pretty common.
May 24, 2010 @ 10:30 PM
sreeb wrote:You can live
[quote=sreeb]You can live pretty much anywhere in San Diego and pay less than $1500 a month for housing if you bought 15+ years ago and didn’t take money out of your house. Having paid mine off with taxes capped by prop 13, I’m well below. In established older neighborhoods, this is pretty common.[/quote]
sreeb, you just bolstered what I have been trying to say here for the last week. I maintain that there are MANY TENS OF THOUSANDS of homeowners just like you in SD County as well as ALL counties in the state. This particular subset of owners needs far less income to enjoy a comfortable life and may actually HAVE less income but are the truly WEALTHY:)
All of this bubble-borrowing is a fairly recent phenomenon (6-7 yrs). Using one’s home as their personal ATM has been going on for a while longer, perhaps 20 yrs., but the amounts withdrawn grew so much larger during the last “bubble” period, due to loose lending stds.
A homeowner who “stayed out of the fray” while the world around them was refinancing and HELOCing and perhaps even accelerated principal or paid the loan off, such as yourself, seem to be the only ones still standing now with their heads above water, IMHO.
May 24, 2010 @ 3:20 PM
There is no screening
There is no screening criteria for Pigg other than the interest to be around and read. So I fully expect a significant percentage of posters to more fully reflect the ‘average’ american HH and save <10%. Especially with many piggs being young parents and new homeowners, I dont doubt that many would have trouble putting much away for retirment or a rainy day.
No you are not the only one counting retirment. 401k is retirment savings, and a major saving vehicle for most. I kinda wonder how many people are saving $ outside of the retirment programs. No 401k. No Roths or 529's. Cause every time I hear some poor FB trying to save their house, they talk about raiding the 401k. Usually they have pretty sizeable balances there, but little other liquid cash.
Also, are people counting returns on investment as savings? I dont, because usually that money is reinvested and could disappear right away if stock prices fall. Same as house appreciation. How many people thought they were getting rich cause their house was appreciating really really fast in 2001-2005? How did that turn out? The question in this thread is a yearly question IMO. How much is your net worth adjusting as a percentage of your income is totally different.
May 23, 2010 @ 7:02 AM
CA renter wrote:bearishgurl
[quote=CA renter][quote=bearishgurl]
The only time I pay real money for lodging is to ski. I book ONLY thru craigslist from a private owner. I do NOT pay the typical 13% “room-tax.” I usually make a deal to use the owner’s “time-share week” by relieving them of their annual HOA fee and taxes for their 1/52 “fractional interest.” That is ALL because they are UNABLE TO USE IT THIS YEAR so I am doing them a FAVOR!!
[/quote]
Great idea on the timeshare, bearishgurl![/quote]
We’ve been doing this for years… Not always timeshares, but doing weekly vacation apartment/house rentals. It’s a MUCH better way to travel if you have kids – less per night with more space. And who wants to take kids to a restaurant for breakfast for every day of a vacation… We spent half what my sister paid on Kauai 2 years ago – they were in a non-ocean front room, we had a 2 bedroom ocean front condo. Our trips to Cabo – we always rent someone elses timeshare. Way cheaper, same resort.
May 23, 2010 @ 7:11 AM
http://www.vrbo.com/ is a
http://www.vrbo.com/ is a great site to find condo/timeshare/houses/etc.
May 24, 2010 @ 6:56 PM
UCGal wrote:CA renter
[quote=UCGal][quote=CA renter][quote=bearishgurl]
The only time I pay real money for lodging is to ski. I book ONLY thru craigslist from a private owner. I do NOT pay the typical 13% “room-tax.” I usually make a deal to use the owner’s “time-share week” by relieving them of their annual HOA fee and taxes for their 1/52 “fractional interest.” That is ALL because they are UNABLE TO USE IT THIS YEAR so I am doing them a FAVOR!!
[/quote]
Great idea on the timeshare, bearishgurl![/quote]
We’ve been doing this for years… Not always timeshares, but doing weekly vacation apartment/house rentals. It’s a MUCH better way to travel if you have kids – less per night with more space. And who wants to take kids to a restaurant for breakfast for every day of a vacation… We spent half what my sister paid on Kauai 2 years ago – they were in a non-ocean front room, we had a 2 bedroom ocean front condo. Our trips to Cabo – we always rent someone elses timeshare. Way cheaper, same resort.[/quote]
How do you know that people on Craigslist are on the up and up? have you ever been “taken”??
May 24, 2010 @ 6:58 PM
Haha, I’m a cheapskate too!
Haha, I’m a cheapskate too! I also reuse aluminum foil! I also reuse ziplock bags, plastic wear, etc. I am in the greater than 50 % group, just starting this year. House, car….paid off. No credit card or other debt. Life is good, but then health issues pop up….. sucks. Enjoy life responsibly folks!
May 24, 2010 @ 10:08 PM
danielwis wrote:How do you
[quote=danielwis]How do you know that people on Craigslist are on the up and up? have you ever been “taken”??[/quote]
Hijack: No, I have never been taken, danielwis. I have been selling and buying on the internet for over six years.
For use of another’s timeshare, I typically deal with SF Bay area ads. This region is extremely familiar and comfortable with craigslist (even the sr. citizens). The calibur of sellers of resort timeshares is very high . . . highly educated, successful and usually owners of many timeshares and other properties. The bulk of them are just trying to “roll along” thru the year if they cannot use this particular unit – basically “break even.”
If I am interested in someone’s advertised week, I contact them and verify their annual expenses. I then contact the timeshare itself and verify the owner’s size of unit and annual expenses. This info is all public because the TS mgmt. forever trying to “sell” timeshares, even peddle “resales.” I would not paypal the $$ to an advertiser whose name and phone number did not match that of the named owners by the timeshare mgmt. office.
One year I even “sublet” 3 days of a San Jose family’s timeshare to another family in Palo Alto (on SF Craigslist), cleaning and restocking the unit myself after 4 days because I couldn’t stay the whole week. The P.A. family was happy to get it and there was even better snow for them than for me . . . LOL. They called mgmt to verify that I had given them THEIR names to be checking in on a certain date. LOTS OF PEOPLE DO THIS — THE PARENTS OF THIS FAMILY BOTH POSSESSED DOCTORATES AND WERE BUS. OWNERS.
IMO, even people who can presumably AFFORD to pay exorbitant ski-lodging prices are reluctant to . . . and have a Paypal acct. and search Craigslist for a better deal.
Oftentimes the TS mgmt. will try to get the “guest” to devote a day or a few hours to their “timeshare spiel.” I always have pre-purchased lift tickets and decline their offer.
I can usually get the TS for one week for the same price it would cost to rent the unit directly form TS mgmt for 2.5 – 3 days. In addition, the “13.5% room-tax” is eliminated.
When purchasing an owner’s 1/52 usage, you as a buyer have to be willing to take the whole week. Also, the owner themselves has to call the timeshare and tell them the names of their “guests” and when they will be checking in.
Which begs the question. Why would anyone spend $15-20K on a ski area timeshare when they can just pay someone else’s annual HOA and taxes and use theirs without ANY initial investment??
I also favor renting private cabins or small houses off craigslist. I don’t care about dated decor as long as it’s warm, has enough beds, a hot tub and I can cook in it. These will usually have the room tax added, however, if they’re managed professionally.
May 23, 2010 @ 9:42 AM
Last Year – It’s about
Last Year – It’s about 31%
This year up to end of April – 33%
We’re frugal but not cheap. Me and my wife both drive luxury cars (both paid off) and shop designer stuff once in a while.
May 24, 2010 @ 11:02 AM
DWCAP, I think you’re right
DWCAP, I think you’re right on the money and again, it’s all in the context. Your context is one of several that seem entirely plausible to me.
If I read you correctly, we also agree that there are a number of other contexts where high percentage savings rates seem much less plausible.
May 24, 2010 @ 3:20 PM
How do you define “net
How do you define “net income” ? What expenses do I subtract from my gross income to determine this? Should I subtract taxes? Too much accounting for me. I’ll abstain.
May 24, 2010 @ 3:58 PM
sdduuuude wrote:How do you
[quote=sdduuuude]How do you define “net income” ? What expenses do I subtract from my gross income to determine this? Should I subtract taxes? Too much accounting for me. I’ll abstain.[/quote]
I want to keep it simple, so just take your biweekly paycheck, multiply by 26 and divide by 12. I’d consider that as your net income. Again, this is not supposed to be that detailed. Just a general idea.
[quote=DWCAP]Now, assume just normal expenses of 3k a month for food, transportation, clothing, health care, utilites, kids school stuff, vacation, etc etc etc. Just the basic necessities of living, outside of shelter. (Does anyone disagree with that number? I dont think that seems too high for a HH of >2, but let me know.)[/quote]
Wow, $3k is actually quite a lot in my eye. My range is $1k-3k, with the average being around $1800-2000, depending on how much (one time expense) I have that month. I haven’t bought clothes in a few years and when I do, I only buy stuff that’s at least 50% off. My jeans are all under $25 with a lot being under $10, my polos are under $15. I don’t go on vacation until my vacation fund is filled up (i.e. set a side money every month for vacation and when that reach a certain amount to go on vacation, then I go).
$1500 for shelter is low for me too. But $2000 for shelter should give you a decent house in decent areas. If you can reduce your $3000 expense down to $2500/month, then you can get a $2000/month house payment.
I do agree that a lot of Piggs (at least one one that voted) are not your average American who don’t save.
May 24, 2010 @ 4:32 PM
Just wanted to respond with
Just wanted to respond with some other possible reasons for the under 10% savings rate.
If a couple has a defined benefit pension plan (or two) and had saved up much more before kids, then they wouldn’t need to save as much when their kids are little. Also, things like inheritance, investment/passive income, etc. can all throw the numbers off a bit.
BTW, I also missed the NET income part, so we’re probably in the 15-20% savings rate as well.
May 24, 2010 @ 4:48 PM
combined my wife and i make
combined my wife and i make over 200k, (I’m most of the income), and we live ina rental for $1,700/month. And that’s the most we’ve ever paid for a rental.
May 24, 2010 @ 7:31 PM
AN wrote:
I want to keep it
[quote=AN]
I want to keep it simple, so just take your biweekly paycheck, multiply by 26 and divide by 12. I’d consider that as your net income. Again, this is not supposed to be that detailed. Just a general idea.
[/quote]
By that definition my “net” is way out of wack. My 401k is part of my savings but not included in that “net”.
I also do a dependant care account that covers after school programs and summer daycare on a pre-tax basis… but by your definition that’s not part of the calculation?
And I have an employee stock purchase plan – that’s 10% taken out of my paycheck up front, for a chance to buy stock at a discount twice a year… How is that NET?
So – just with this stuff, and taxes – my “net” is under half of my gross… but I get some of it back during the year (DCA and stock purchase).
I guess I don’t see the validity of the poll if it’s based on net… Gross would be much more telling.
May 24, 2010 @ 8:39 PM
I agree with UCGal that this
I agree with UCGal that this is a flawed poll, that’s why I never casted my vote.
May 25, 2010 @ 12:32 AM
How I came up with my
How I came up with my numbers:
14% to retirement, automatically deducted from check, pre tax (get 5% matching, but did not calculate this in, because it is not “me” saving it, it is the employer)
Took net pay, and calculated dollars saved per month. Added the 14% + what percent was savings per month based on net and came up with final number, around 30-40%. (admittedly it should be 50%, but it is nice to be able to do stuff when one wants too…)
Note: Live in a rental house for 10 years and rent has never been raised. Live with BF who also pays 1/2 rent/bills.
Of course, when this gravy train runs out..things could change drastically.