Extreme savers

**BeachFun** · 08-15-2010, 08:59 PM

I just read a couple of articles on extreme savers that save between 30-60% of their after tax income. I'm just wondering how much are you saving and how do you do it.

We manage to save 10% pre-tax in our 401k and $160/month of our after tax income (about 3% after-tax). We also pay an extra $280 on the principle of our mortgage (about 6% after-tax).

I really need to step up our savings.

**ms.mel.who** · 08-16-2010, 10:39 AM

Base pay
We say 7% in 401K with
a 4% company match.

We also save 1.5% for college.

However, all windfalls (Bonuses, stock sales, tax returns) which equals about 25% of are income, is split between annual costs (Christmas, Vacations, taxes, insurance) and savings/early mortgage repayment.

We have been doing it this way for 4 years. I wish we had always been this way! In these four years we have paid off two cars, all student loans, saved an emergency fund, and have a healthy retirement fund.

I am not sure I would ever want to save between 30-60%, just because I want to enjoy our money while we are living. I want my kids to go to camps and play in sports, play the piano. I want to visit my family, go on vacations, and things like that.

**Contrary Housewife** · 08-16-2010, 10:51 AM

We're saving in the 30-40% range right now, BUT we don't have a mortgage on the house or any CC debt or car payments sucking up our income any more.

**nuisance26** · 08-16-2010, 12:17 PM

~We're extreme savers then I guess.

We put in 7.5% pre-tax into DH's 401K and get a 50% match. So that's a total of 11.25%. Then we save a big chunk of take home pay. For the first half of this year, in addition to the 401K, we've banked 35% of our income.~

**BeachFun** · 08-16-2010, 06:50 PM

Thanks for all the great responses. Looks like you all fall into the extreme savers category. Keep up the good work. I'll have to rework our budget to allow for more savings. I agree though, that I don't want it to be so much that we can't enjoy living now. I'll have to figure out where that happy medium falls for our family.

**BertineC** · 08-22-2010, 07:44 PM

I think I need perspective on what constitutes a saver in the US!

I have been working my finances and usually like to save at least one paycheck, or, as with the case at the moment, use one to pay off debt and the other to pay monthly expenses (including minimum payments on said debt). I do save 4% at the moment to get my company 401K match, but it would be nice to up that next year once the debt is paid off. I do try to save $400 from the second pay check and also provide myself with additional "float" money for the month above my budget (for activities and the like) so life isn't so focused on paying off debt that I forget to enjoy it! I would say I am close to the 20% range right now for savings (incl. 401K, although I don't normally count that in my budget because I only count net take-home), though without debt it would be closer to 50%+

So far this system has been working well for me and I don't waste brain power fretting over some $2 purchase or agonizing over whether I "should" join an activity because that $100 "should" be paid towards debt or worried about spending a little extra above my budget at the grocery store. Saving is important to me, so I still get to see the balance rise even though I am paying down debt. Having that cushion puts my mind at ease.

What is really fun is to see what I COULD be saving if the debt didn't exist. Talk about motivating!

**joyofsix** · 08-22-2010, 08:01 PM

We save but we're not extreme. I wish I could get he rest of the family on board for extreme. We put 15% in 403B, $200 (5% of take home) in savings and put $200 extra on the house each month. I'd like to save more but it never happens.

**Josephhgoins** · 08-22-2010, 08:30 PM

Right now, I am in debt elimination mode, so I am not saving as much as I used to. I am currently putting 25% of my take home pay into my 401K. All windfalls go towards debt no matter how small or large until it is gone which should be soon.

All of this may change soon as I am headed towards lay off. I found out this week that because of the 401K thing I will actually get a pay raise when I go on unemployment. Soo score there!

**Telephus44** · 08-22-2010, 08:35 PM

We save about 15% our income. Probably will be closer to 20-25% next year, since DH's new job and awesome raise. We put aside $$ into our 401K's, DS's 529, my Roth IRA, the EF, pay a little extra on the mortgage, and invest some in DRIPs. Had to ballpark an exact percentage, but I did feel good when I did taxes last year and we actually saved more than we paid in Federal income taxes.

I have to admit, unless you have a really big financial goal - like I want to pay cash for a huge farm, or I want to retire at 35 - I just don't understand why anyone would actually save huge amounts of net income. If you don't need all that money, then why don't you just work less? I mean, if I made $100K a year and only spent 20K and saved 80K, I'd rather just go out an get a 20K/year job. Ok, maybe a 25K/year job so I could still save 25%. I'm really talking the extremes here though - people that save over 50% of your net income. If anyone here reads this and does that, I'd be interested to hear why. Maybe everyone has huge financial goals?

**pollypurebred39** · 08-22-2010, 09:08 PM

Wow! 30%-60% Good Grief, we'd be living in a cardboard box if we put that much into savings. We've never come close to being an extreme saver. I'd say 10% not counting investments in our best of times.

**Domestic Gal** · 08-22-2010, 09:30 PM

We are extreme savers here. In 2008 I figured up just how much we put into savings/retirement/invensted for the year. It was 40% of our income. We also put in $700 a month for college that is not included in the 40%.
The reason why is because DH is eleven years older than I am. And if I want to retire at the same time he does means we need to have more in savings. The money has to last lots longer than the normal retirement time.
I think we will surpass the 40% this year since I picked up another part time job and all of this goes into savings for our Hawaii trip next year.

The reason we can put 40% away is that we are DEBT free. We owe no one.
I do not have to work but it drives me nuts to stay home all day so I work a couple of part time jobs. I do not make a lot of money but I still have to save over 50% of my income to fund my IRA Roth each year.

We do this on less the 75k a year.
Are living expenses are less that 2k a month so lots of room to save.
We do live a little also. Just this summer we took 2 vacations each one a week long.

**frugalwarrior2** · 08-22-2010, 10:24 PM

wow,you guys put us to shame. We just paid off all the consumer debt as of this tues. I am flexing between saving,college in sept. for DS,retirement and snowballing the 2nd mortgage which D.R. calls a mortgage but to treat as BS2. Decisions. I have my BS1 but thats all the savings.

**nuisance26** · 08-23-2010, 08:37 AM

Originally Posted by Telephus44

I have to admit, unless you have a really big financial goal - like I want to pay cash for a huge farm, or I want to retire at 35 - I just don't understand why anyone would actually save huge amounts of net income. If you don't need all that money, then why don't you just work less? I mean, if I made $100K a year and only spent 20K and saved 80K, I'd rather just go out an get a 20K/year job. Ok, maybe a 25K/year job so I could still save 25%. I'm really talking the extremes here though - people that save over 50% of your net income. If anyone here reads this and does that, I'd be interested to hear why. Maybe everyone has huge financial goals?

~If someone only needed $20K to live on and made $100k then they are earning 4 years of vacation for every year worked. That's pretty awesome and I don't know why anyone would actually choose to work for less. Why would you work for less? More job enjoyment maybe?
And you're assuming that people who are saving 50% are making a lot of money. We're saving over 40% and DH is the sole income provider at $40K year(that's with OT!). And yes, I guess we do have big goals for people in our income range. Both of us only have some college so we know we need to save more because our lifetime earning potential is much less than those with degrees. DH has always wanted to retire with a million dollars. We're on target with the 401K to make that happen. We want to have a medium/large family and always have a parent at home. We want to be able to help others and never be in a position to need help. We just want to do the best we can with the money we have. It all adds up to a lifetime of financial independence.~

**TheRootedNomad** · 08-23-2010, 09:27 AM

Pre-tax we put 12% + a 3% match in DH's 401. That's getting ready to be upped to 15% + a 3% match. (It wasn't at the 15% because all the health insurance costs were coming out of his check until last month.) We also put 16% + a 4% match in my 403B. Additionally we are currently putting about 10% pre-tax in the new HSA at my job to build it up.

After taxes we don't have a set monthly amount at this time as we already have our EF and just put what we can each month into our savings funds for things like the redoing the kitchen, Christmas, and so forth while throwing extra at the morg.. It gets based more on what type of month it looks like DH will have. Months where he's slammed with OT it may end up being 10 or 20 percent. Slow months it may be close to nothing.

**druthb00** · 08-23-2010, 11:55 AM

We saved just over 60% of our income while we prepared to move to FL...but we only did that for about 2 years. Now that we're here, and BF is the only one working full time, plus our rent is astronomically high, we're lucky if we save $100 each month. After all of the car problems we've had the last few months, I decided I need to find a job. I'm not comfortable not saving any money. But I did find out last week that BF's company wants to bring me "on board" part-time. So all of my income will fund our savings (house) and we'll be looking into starting to save towards retirement as well.