How much of your income are you able to save/invest?

[cielo]

I have recently been trying to put together a financial life plan, a large part (read 100%) of my current/near future income will be earned from a job. I was wondering what others have found is an achievable percentage of either pre or post-tax income (poker or otherwise) is reasonable to save/invest. I just graduated college, have no children, very few expenses, and live a frugal but not cheap lifestyle. If you list your % let us know if you have kid(s) &/or other large expenses. Thank you for sharing your experiences.

cielo

[david050173]

I save ~45% of my income from work. I can only do this because I make good money (100k+) and have no debt (including car payments) and can live the life I want on 2K after tax a month. That is probably an upper bound on what you can save since taxes are a a huge chunk of what I don't save. More realistically if you are up about 20% you are doing pretty well. If you are under 10% you are living a lifestyle you can't afford.

[CCass]

If you save 15%-20% you will be fine. Obviously more is better, but at ~20%, you can retire with the same (or slightly better) lifestyle that you currently have.

[bwana devil]

How much you should save depends on when you start saving. If you're 22, you can save 7-10% and retire VERY comfortably.

I didn't start until my late 20s so I'm saving 21% pretax. I'm married w/ no kids.

If someone tells you that you should save 20%+ at your age, they're blowing smoke.

check out www.bankrate.com (http://www.bankrate.com) and play around w/ their retirement calculators for an idea. keep in mind, the stock market has historically returned ~10% annually when calculating returns.

[Non_Comformist]

I have gotten my win rate up to where I can make high 5 figures (75-90K) and have budgeted $1500 a month for savings not including bankroll additions.

I am not married but do pay child support ($300) with no debt.

[david050173]

[ QUOTE ]
How much you should save depends on when you start saving. If you're 22, you can save 7-10% and retire VERY comfortably.

I didn't start until my late 20s so I'm saving 21% pretax. I'm married w/ no kids.

If someone tells you that you should save 20%+ at your age, they're blowing smoke.

check out www.bankrate.com (http://www.bankrate.com) and play around w/ their retirement calculators for an idea. keep in mind, the stock market has historically returned ~10% annually when calculating returns.

[/ QUOTE ]

First off doing % here can be really misleading. If you are making 30K a year, you are going to have to spend most of your money on housing and other basics. If you make 70K you have a lot more flexibility. One size doesn't fit all.

I wonder why do you feel 20% is excessive for a young person to save? If you figure saving later in life is likely to be a lot harder (ie when you have kid expenses and you probably dont' want as many room mates),your money will have less time to multiply and even saving 20% you probably have more spending money than ever.

[Ray Zee]

the answer is that the more you make the higher % you can save. but the more you save and let compund the more you will have when you get old, which you may not think will happen right now. but by saving alot when young you will be a rich old man when money means more to a person. i speak from experience.

[astroglide]

how have you found money to mean more with age?

[Rooster71]

[ QUOTE ]
I have recently been trying to put together a financial life plan, a large part (read 100%) of my current/near future income will be earned from a job. I was wondering what others have found is an achievable percentage of either pre or post-tax income (poker or otherwise) is reasonable to save/invest. I just graduated college, have no children, very few expenses, and live a frugal but not cheap lifestyle. If you list your % let us know if you have kid(s) &/or other large expenses. Thank you for sharing your experiences.

cielo

[/ QUOTE ]
Using percentages can be misleading. I recommend the following: Figure out how much you can comfortably save each pay period and just do it. The key is not the percentage you save, but the fact that you don't waste money. This is important because you are sure to get future raises, etc and you can take your incremental increases in income and plow them directly into savings. What I am getting at is that as long as you have a saving mindset and don't blow your money, then it's really just a matter of transferring the funds into the savings account (or wherever).

Look at it this way: There are plenty of folks who are old (70+ years) that have never made more in a single year than you will probably average annually in the the first few years of your career (depending on what you do). Yet many of these people have net worths in excess of $1M. This attributed solely to judicious money saving practices.

[Lawrence Ng]

[ QUOTE ]
but by saving alot when young you will be a rich old man when money means more to a person. i speak from experience.


[/ QUOTE ]

I hear this a lot too from my relatives who are well off now after saving for years and years when they were younger. Right now, I'd have to say even though I work hard for every dollar I make, it's coming along very well. But I am also interested in hearing why you think that old age makes you appreciate money more.

Thanks

Lawrence

[Ray Zee]

i guess i mean when older you appreciate the money for making your house nicer. and having money for the big expenses that hit. like health costs. you dont want the state to be supporting your heart transplant or such. and when younger you know you can and dont mind working hard to improve your position. but when older you want the comfort of knowing that you can coast along without having to work. i know i could but i would dread having to go back out and have to make the money to pay bills to save up for things.