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Old 07-22-2010, 07:06 AM   #41
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I suspect that people with a low income have a much lower savings rate than people with a high income do.
Exactly. You can't save/invest if you can't put food on the table (been there, done that). There is a minimum substiance level that’s required, regardless of your family makeup.

We started out slow (about 2% of total gross income for the two of us) but over the years, that grew to 33% of total gross income for the decade prior to retirement.

For me it’s not how much you save as much as the consistency of having a long term plan and sticking to it...
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Old 07-22-2010, 07:59 AM   #42
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I think that is the difference between many of "us" and most of "them." We're just wired differently. I personally don't find shopping and buying things enjoyable, and not just because of the cost. Shopping blows. I hate it. But I know other people who engage in shopping as a competitive sport. They don't understand my aversion and I can't understand their compulsion. But I also recognize that my way of thinking is a minority view.
I hate shopping, too. I can barely tolerate food shopping, as I try to store non-preishables in my limited cabinet space so I don't have to quite as often, maybe once every 10 days or so. I drink a lot of milk, so that often dictates my supermarket trips although I can always hit the Dairy Barn or local mini-mart for that.

At least being ER, I can do my shopping (food and otherwise) at less popular times (midday and midweek) to avoid the more busy times of evenings and weekends. When I was semi-retired, I was also able to avoid those busy times.
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Old 07-22-2010, 09:15 AM   #43
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I'm always disappointed with articles like this because they never actually reveal any secrets. I always read them hoping someone will have a nifty little insight that I can use. It's seldom the case.
+1. That's exactly how I feel after reading such articles. In a nutshell, the article said that people earned X or Y amount and saved so and so %. Well, OK, one family instilled frugal habits in their kids and another lady in Atlanta earns extra $ after her day work. Did it specify how the savings rate was determined? If it did, I missed it. I just assumed that their 40-60% savings of their net income was IN ADDITION TO the max contributions to their 401k plans.

Also, I am just curious about the $250K family saving 60% of their net. I wonder what their take home money could be.
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Old 11-07-2010, 12:50 PM   #44
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Totally agree, folks making below a certain wage (varies from place to place) will find it hard to save 50% and not live under a bridge. But if they save some, scrimp, plan their purchases and make the absolute most of what they have, they are super in my book. And millions of people fall into that category. I used to.

Fortunate now to be able to save 45% year after year of post- tax income. 2 kids, 1 salary since time began. Live in a beautiful home with house payments and taxes about 7% of gross. Great public schools. There are things savers do...

Like to cook so they don't eat out
Buy used cars and drive them for years
Plan every purchase
Have a budget and stick to it
If married/ partnered, have a spouse who is also frugal
Maximize benefits like 401(k) match
Don't run credit card balances, but maximize points/miles
Share and accept hand me down kids clothes
Teach their kids to manage money, give allowance for work and don't cave in at Target
Take stuff out of the basket before check out
Recognize that more stuff won't fill the hole in your soul
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Old 11-07-2010, 12:54 PM   #45
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[QUOTE=aida2003;.

Also, I am just curious about the $250K family saving 60% of their net. I wonder what their take home money could be.[/QUOTE]

I'd say $7k a month.
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Old 11-07-2010, 01:31 PM   #46
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Our savings rate is right at 70% of gross, I'm too lazy to calculate what it is after taxes. Wasn't nearly as high when we were younger, but we've always been big savers, and more and more as the years went on due to higher salaries and lower (wants) and expenses. Fortunately we've done plenty of traveling already so we've gotten that out of our systems. We enjoy experiences but not things so much, content to live 'a modest, ordinary life.'
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Old 11-09-2010, 07:56 AM   #47
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43 years old, divorced with one kid. I am saving 38% which doesn't sound bad but I am "spending" about $70K per year which is a lot more than I think I should. Child Support and an aggressive mortgage paydown are mostly to blame. Both of these will be done in 4 years at which point I should be able to save 60% of income for a couple years before I hope to retire (50-52).

I don't shop or waste money on "things". My biggest waste of money is "entertainment" most of which goes to the local sports bars. Embarassing to say that totals to about $500 per month in wings, pizza and beer.
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Old 11-09-2010, 08:49 PM   #48
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My biggest waste of money is "entertainment" most of which goes to the local sports bars. Embarassing to say that totals to about $500 per month in wings, pizza and beer.
That sounds like heaven. Of course, I'm making this post while cooking and waiting for my dinner and am very hungry right now.

Wings, pizza and beer. Mmmmmm..........
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Old 11-10-2010, 02:27 AM   #49
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+1

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Recognize that more stuff won't fill the hole in your soul
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Old 11-10-2010, 04:52 AM   #50
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Some of you are indeed extreme savers!!

We're on track with our retirement goals, married thirty years, have no need to rent self storage , use the roof antenna, leverage broadband with Vonage, drive fuel efficient, low end/ high value vehicles, burn wood to supplement home heating, keep the lights off, cut the grass, take leftovers to work for lunch everyday, exercise regularly (to save the body and the noodle) and in general minimize what we spend and maximize what we save...at a level that's tolerable to both of us.

We use a free online banking application from the credit union called Financeworks to monitor spending and for the most part use payroll deductions for savings.
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Old 11-10-2010, 10:06 AM   #51
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My biggest waste of money is "entertainment" most of which goes to the local sports bars. Embarassing to say that totals to about $500 per month ...
You sure that isn't a gentlemen's club rather than a sport's bar?
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Old 11-10-2010, 10:14 AM   #52
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'cut the grass, take leftovers to work for lunch everyday'

umm, tasty grass for lunch. I think I prefer the pizza and beer.
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Old 11-10-2010, 10:50 AM   #53
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'cut the grass, take leftovers to work for lunch everyday'

umm, tasty grass for lunch. I think I prefer the pizza and beer.
Not sure how tasty it is straight up ...but I know some folks mix it in with their cookie dough...
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Old 11-10-2010, 11:15 AM   #54
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Or brownies.
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Old 11-10-2010, 11:54 AM   #55
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Or brownies.

I wouldn't know about that...
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Old 11-10-2010, 11:57 AM   #56
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I guess I'd qualify as an extreme saver. This year I'll save 69% of my after-tax earnings and next year I'm budgeting for 75%.

My secret formula has been to keep spending flat (or lower) as my earnings increase. Over the past four years my income has increased a lot while my expenses have declined. I refinanced the house and have put off an unnecessary home renovation.

I spend very little on clothes and have driven the same car for 9 years. My weak spot is food and wine. I can't seem to get organized enough to bring my lunch to work.

I'm a cautious guy and figure my earnings may drop (lower bonuses and no more stock vesting) in the future so it's best to save the windfall now and enjoy the compounding later. I'd rather have FI than a flashy car. I can't wait to be in complete control of my time and financal destiny!
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Old 11-10-2010, 02:19 PM   #57
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... cut the grass, take leftovers to work for lunch everyday, ...
If that phrase catches on then it could replace the dryer-sheet meme.

"Confused about eating grass clippings"... well, maybe not.
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Old 11-10-2010, 02:21 PM   #58
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If that phrase catches on then it could replace the dryer-sheet meme.

"Confused about eating grass clippings"... well, maybe not.
My favorite is still "straining the glass shards out of the peanut butter"
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Old 11-10-2010, 02:39 PM   #59
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My favorite is still "straining the glass shards out of the peanut butter"
Five years later it's achieved multi-platinum golden-oldie status.

My perpetual thanks to Trombone Al for digging it up...
Early Retirement & Financial Independence Community - View Single Post - Confused and scared
... and I don't think SimpleLiving.net will ever recover their reputation from that one.
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Old 11-10-2010, 02:49 PM   #60
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Thanks for the trip down memory lane, Nords and Travelover!
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