The 10% savings rule

[zpcsc]

The 10% savings rule does it consist of your gross pay or take home?

Thanks.

[GEORGE]

The 10% savings rule does it consist of your gross pay or take home?

Thanks.

WHAT RULE???

 

IS THIS NEW???

 

GROSS "IF" I WAS TO MAKE A GUESS

[Rich_in_CT]

You don't need a rule, just save whatever you can afford to. If you can pull off 20% than do that. If you can save only 5% one month its better than nothing. If you tax returns come back and you can save 50% of that month's income GREAT!

[Clarkfan2]

I would say gross. 10% was recently recommended in the book "The Automatic Millionaire." Maybe that is what the poster is referring to???

[Rich_in_CT]

If 10% gets someone to millionare status then surely 20%+ can get someone into TRILLIONAIRE status right? Keep saving all you can buddy.....

[Uncle Leo]

10% is the generic standard that most people throw out there.

[richandpoor]

Isn't that how much you're supposed to pay preachers???

[Rich_in_CT]

Isn't that how much you're supposed to pay preachers???

Why the heck would anyone do that?

[shedguy]

If 10% gets someone to millionare status then surely 20%+ can get someone into TRILLIONAIRE status right? Keep saving all you can buddy.....

 

 

 

 

funny

 

every little bit helps

my grandma started working full time at age 65

she deposited 23 bucks a week into a 401k

at 78 she had $60,000. not bad for an old chick

[sabbath999]

The 10 percent of your income has been around, basically, forever. It was revived in the 1950's in the book "The Richest Man In Babylon", which by the way is an EXCELLENT read.

[Uncle Leo]

The 10 percent of your income has been around, basically, forever. It was revived in the 1950's in the book "The Richest Man In Babylon", which by the way is an EXCELLENT read.

 

Probably still the finiest book ever written on personal financial issues.

[marcellus]

10% is the generic standard that most people throw out there.

 

 

Yeah that 10% rule is funny. I hear it all the time when someone is referring to why you should invest in you 401k.

[Marty716]

10% is the generic standard that most people throw out there.

 

 

Yeah that 10% rule is funny. I hear it all the time when someone is referring to why you should invest in you 401k.

 

I'm doing at least 11% regularly in my 401K and anything left over at the end of the month goes into a short term CU savings account.

 

Is that a Beretta Onyx in your signature?

[marcellus]

10% is the generic standard that most people throw out there.

 

 

Yeah that 10% rule is funny. I hear it all the time when someone is referring to why you should invest in you 401k.

 

I'm doing at least 11% regularly in my 401K and anything left over at the end of the month goes into a short term CU savings account.

 

Is that a Beretta Onyx in your signature?

 

 

Close, only 5k off or so: a DT10 Trident.

[GEORGE]

10% CHURCH

10% SAVINGS

 

I GUESS

[piper41955]

15% 403b/IRA

6.9% Investments / High Int Savings

 

This is with my paying 1k per month extra toward principle on my mortgage to pay it off in 10 years.

[hegemony]

30 percent savings is a better rule...

[james]

30 percent savings is a better rule...

IF you have the level of income to be able to.

 

Example: It is easier to save 30% of your income if you are making $75,000 than if you are making $30,000/year.

[squirrelgirl]

30 percent savings is a better rule...

IF you have the level of income to be able to.

 

Example: It is easier to save 30% of your income if you are making $75,000 than if you are making $30,000/year.

 

It probably depends what your other montly obligations are. If you make 30K and have no credit card debt, no car loan, and own your house, you could easily save 30%. If you make 75K and have debt up the yin-yang then 30% probably wouldn't work.

[54regcab]

30 percent savings is a better rule...

IF you have the level of income to be able to.

 

Example: It is easier to save 30% of your income if you are making $75,000 than if you are making $30,000/year.

 

DW and I were in the low $60's last year and put away $30K.

You DO NOT need a six figure income to be able stash money away, it's a matter of cutting lifestyle today in order to live better tommorow.

[angeleyeskkhr]

30 percent savings is a better rule...

IF you have the level of income to be able to.

 

Example: It is easier to save 30% of your income if you are making $75,000 than if you are making $30,000/year.

 

DW and I were in the low $60's last year and put away $30K.

You DO NOT need a six figure income to be able stash money away, it's a matter of cutting lifestyle today in order to live better tommorow.

 

 

And sometimes it's not possible even if you cut out everything you could.

 

ETA: But I do agree that ya don't NEED to make a six figure income in order to save money...HOWEVER, I think your example of saving 1/2 your income isn't something MANY low income families (mine included) could do.

Edited March 5, 2006 by angeleyeskkhr

[54regcab]

Angeleyeskkhr, most people should be able to save SOMETHING, even if it's not 10%. Newer cars are a big no-no for people with low incomes, if you income is low you should be driving cheap cars. Don't laugh, I see people making $20-30K drving around in new cars all the time. Pop over to the automotive finance forum and see what I'm talking about.

Our example of saving 1/2 our income is a bit extreme, most people would have bought newer cars (We drive '99 and '98 cars), a nicer house and taken a few vacations, as well as buying some "stuff". However we chose not to so DW could be home with the baby that is due in August of this year.

Your situation is a bit unique since you are going to school and all, but you have a PLAN to increase income long term. No you might not be able to save much now but if you don't spend all of your income increase when you graduate you will have plenty to save.

The main point is to get into a habit of saving regularly, even if it's only a few bucks a month.

[Clarkfan2]

Younger folks should probably be saving at least 15% since Social In-Security will not exist in it's present form about 30 years from now!

[GEORGE]

PAYING OFF CREDIT CARD/LOAN

DEBT AT 9.99%--19.99% (or higher) WILL MAKE YOU WAY MORE THAN

ANY SAVINGS ACCOUNT WILL!!!

Edited March 5, 2006 by GEORGE

[Uncle Leo]

Angeleyeskkhr, most people should be able to save SOMETHING, even if it's not 10%. Newer cars are a big no-no for people with low incomes, if you income is low you should be driving cheap cars. Don't laugh, I see people making $20-30K drving around in new cars all the time. Pop over to the automotive finance forum and see what I'm talking about.

 

I may be a bit biased because I simply DETEST car payments, but I see the buying of new cars as part of the problem for alot of people's financial woes. Don't get me wrong, there is a time and a place for a new car. I've bought two in my lifetime, myself. But, I do know many people that buy a new car every 2-3 years. And, I also know people like you mention, that buy a new car when their income is still borderline. Even buying a car only 1-2 years old can save a ton of money while still getting you basically the same thing.