Secrets of Extreme Savers

[MasterBlaster]

You could put my picture in there. I'd rank with the best of them. Decades of living way below your means pays off in spades.

Yet I don't feel deprived at all.

Secrets of extreme savers - Avoid debt (1) - Money Magazine

I would characterize myself as a pretty extreme saver but just an average investor.

 

[photoguy]

So what's your savings rate?

 

[ziggy29]

So what's your savings rate?

I just looked at the first six months of 2010 in Quicken and it looks like our savings rates (deposits into savings accounts, investment accounts and HSA) was 44% of our after-tax income (and about 50% if employer matches are included). We could easily crank it up to over 60% by cutting back if we really wanted to, but I don't feel like totally depriving ourselves of stuff and activities that add significant pleasure in our lives.

 

[bbbamI]

So what's your savings rate?

0.....

 

[FIREd]

Over the past 12 months, our savings rate was 73% of after tax income.

I consider myself a good saver and a lucky investor.

 

[Dawg52]

0.....

Same here, but at one time I had a pretty high savings rate. All I can do now is control the outflow.

 

[W2R]

You're so right, MB. At some point I think it is a lot easier to save money than to try to earn a lot more or to invest aggressively. This is a way of tackling the retirement dilemma from both ends - - building the nestegg, and minimizing the expenses to which one is accustomed.

When one is in their 50's like this couple, and presumably "on the home stretch" so to speak, taking the chances a 20-year-old might take at investing is not smart. When retirement is drawing near, many people move to a more conservative AA.

In a sense, I was lucky. My divorce left me with virtually nothing but debt at age 50 so I HAD to be a saver. I learned to live on less because I wanted to retire and the numbers told me that was what I needed to do. Then I got used to it and like you, did not feel deprived. I just felt determined.

Now, I can spend more. Delayed gratification is the best!

 

[Khan]

I just looked at the first six months of 2010 in Quicken and it looks like our savings rates (deposits into savings accounts, investment accounts and HSA) was 44% of our after-tax income (and about 50% if employer matches are included). We could easily crank it up to over 60% by cutting back if we really wanted to, but I don't feel like totally depriving ourselves of stuff and activities that add significant pleasure in our lives.

The last few years of w*rk, savings rate was ~50%. Now it's quite low. I am kinda sorta working on rebuilding the slush fund after the 2007 car purchase.

 

[FUEGO]

You could put my picture in there. I'd rank with the best of them. Decades of living way below your means pays off in spades.

Yet I don't feel deprived at all.

http://money.cnn.com/galleries/2010...ey_pf+(Personal+Finance)&utm_content=My+YahooI would characterize myself as a pretty extreme saver but just an average investor.

I guess we would be in the extreme savers category too (gosh I feel like I should win a prize! ).

We save 150% of our after tax income. Yes, the rate is higher than 100% because much of our savings come out pre-tax.

Our savings rate as a percent of gross income is around 65%.

Taxes (mostly payroll taxes) are conservatively estimated at 11% of gross and our spending is around 24% of gross.

We buy new stuff, go on vacations, own a decent single family house, have two cars and two kids. We think we live fairly normally but we are obviously freaks when it comes to spending up to or in excess of our means. I guess you could say we are "spending" our money on buying ER.

 

[bbbamI]

All I can do now is control the outflow.

I use a sponge.

 

[DallasGuy]

When I worked I usually saved about 50-60% of my after tax income from my job. That is the main reason I was able to retire at age 53 since my investment returns were never that high...the highest annual investment return I ever had was about 13%. I think that qualifies me as an extreme saver back when I was working.

 

[BigNick]

We "save" about 45% of our net income, but some of that goes into the "big ticket items" pot. Only about 35% goes into the retirement fund. I'd like to do better, but we have two kids in college right now, so that's 30K/year pushed to one side for now.

 

[Bimmerbill]

I read that article and noticed a few military officers and a few high income earners (well, what I consider high income).

I don't think I save much of my take home. I do put 18% into my 401K, but that's pretax.

I don't know how you folks manage to save so much. Maybe its a regional thing? I live in the northeast and things are expensive! Housing, transportation, utilities, daycare, gas, insurance, etc.

 

[SecondCor521]

Quicken says that my total savings divided by my total income is about 46.5%, so I guess I save about that percentage of my before-tax income. If I subtract taxes from income, the percentage turns out to be about 56.1%.

Meh.

@Bimmerbill, it helps to have a reasonably high income and live in fly-over country.

2Cor521

 

[ziggy29]

I don't know how you folks manage to save so much. Maybe its a regional thing? I live in the northeast and things are expensive! Housing, transportation, utilities, daycare, gas, insurance, etc.

No debt, no mortgage, low cost of living where I am. It helps that I had a Silicon Valley salary transferred to Texas a few years ago; the difference in cost of living probably made it like a 40-50% raise.

 

[MasterBlaster]

I guess we would be in the extreme savers category too (gosh I feel like I should win a prize! ).

here's your prize (you choose which one you like):



actually the real prize is freedom from financial stress and being able to live the life that you choose.

 

[FUEGO]

actually the real prize is freedom from financial stress and being able to live the life that you choose.

That is prize enough.

We are already at the point where we are free from financial stress (as to our own finances anyway). Even at the worst point in the 2008-2009 market crash, when I told DW that we lost almost $200,000 in our investment accounts, neither one of us were too stressed out, since we knew we still had many years of expenses "in the bank" and we can easily live comfortably on unemployment if we both became unemployed simultaneously. Life is good!

 

[plex]

The ER plan for me is mostly driven by a high savings rate. 61% pre-tax (gross), or about 81.5% of post-tax. For simplicity, I count the year or two of paying off school tuition debt as savings. Investment returns will mostly only matter during ER (especially the 10 years right after ER starts, but I could work part-time fairly easily if the market is looking like the Great Depression II around then).

 

[FIREd]

I don't know how you folks manage to save so much. Maybe its a regional thing? I live in the northeast and things are expensive! Housing, transportation, utilities, daycare, gas, insurance, etc.

It helps to receive a California-indexed compensation while living in the deep south.

 

[Bimmerbill]

Yeah, I wished I was getting paid the COL adjustment for Boston and living in the south, but I gotta live in the Boston area! On the plus side, I can retire and take my Boston based pension with me to lower cost of living areas.

Tho, I am doing fine on my salary. If I had a spouse that was making good money we could bank that.

How many of you saving 50% are single earners?

 

[FUEGO]

How many of you saving 50% are single earners?

We live in a fairly low cost of living area in the southeast US. I have a working spouse. And our childcare is presently provided at a huge discount (by family). We are basically able to live fairly comfortably off of one of our salaries (and still save some of it), and then save all the other's salary, or use it to reduce debt, such as paying 3x our mortgage payment every month.

Having a two income earner household also lets us get health and dental insurance (and other benefits) from the employer that has the better plan. We get all those benefits from DW's megacorp and it saves us probably $7000-9000 versus what my employer would charge for similar but crappier benefits. Although without DW's income, we would probably get "free" government health insurance for the kids since we would be "poor". And a bunch of other "free" stuff from the government.

 

[tmm99]

Single earner with about 45% savings rate, but I'm a renter living in Silicon Valley.

 

[Retch The Grate]

Single, renter, living in silicon valley as well. Savings are 33% of annual salary, 43% of (paycheck+pre-tax 401k contributions). Of course, rent is 25% of (paycheck+pre-tax 401k contributions) so I'm hoping I can get that down in the not too distant future and swing some of that into savings as well.

 

[LOL!]

In the first quarter, I was saving 75% of my gross into my 401(k) and my spouse was saving 90%. Those were the limits imposed by the employer. We also maxed out our Roth IRA contributions for the year.

That was quite a bit of cheating though as our taxable investments paid enough dividends in the latter half of December to afford our lifestyle for a number of months.

And now that we cannot contribute to 401(k)s and Roths anymore in 2010, we just spend the money since we have enough of it.

 

[HornedToad10]

~15% for retirement including 401k match
~5% debt paydown of 0% loan on new car
~12-16% house/long term savings (depending on bonus amount)

Also a relatively newly married renter in Sillicon Valley but starting to look at townhouses and/or moving to Colorado . For now I think we're going to bite the bullet and stay here for at least awhile.

Hmm, not quite as much savings as I thought it was...