How Much of Your Paycheck Should You Save? (With Data)
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- Опубликовано: 8 июл 2024
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In this video we explore how much of your paycheck you should save every pay day, and what savings rates among different income levels are with data.
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Timestamps:
0:00 - Start Here
1:25 - Savings Rate Over Time
2:40 - Savings Rates by Income
3:58 - A Handy Tool
4:24 - How Much Should We Be Saving?
6:33 - Your Savings Goal
7:50 - How to Actually Save More
8:49 - What If I Have No Savings?
9:47 - A Caution
11:15 - How To Make More
12:15 - Savings By Age
12:52 - Net Worth By Age
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The graph at 12:50 - we messed up the order of the dates, but the data is correct - the dates should go from left to right 1989 to 2019. Also... how much do you save? Lmk below.
$1.20
I just recently started saving 10% of my paycheck into my savings account every two weeks. It doesn't feel like much, but I feel a lot more proud of myself now knowing how the average person saves.
@ 76.5% for the year so far.
6% into roth tsp. 8.5% into roth ira. The match is 5%, not sure if I should include the matching, but there ya go.
👆Thanks for the comment.
Text I have something lucrative to offer. 🚀
Makes me feel good saving 20%.
A great tip is when you’re done paying off you car loan. That same amount you paid every month, just put into a savings from now on. You already built a habit of spending that money a monthly basis but move it to the bank now.
THIS Comment!!!! 🎉
I actually just thought that same thing yesterday! 😮
Yes I do this. Never have a car payment
Financial common sense! Unfortunately, many never pay off the car they can’t really afford in the first place, especially with these 6/7 year loans. They’re at the dealership again rolling negative equity into the next one.
And then you'll have enough $$$ to buy another car with cash or for emergencies.
It’s not only spending habits. Higher incomes correlate strongly with being in high-cost areas such as NY or SF. The higher income is essentially negated by local price levels.
Lifestyle-influation is the biggest trap that keeps people poor.
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
Effective personal finance management is more important than the amount of money saved, regardless of whether income is earned through job or investment. Individuals can seek counsel from a certified financial advisor to optimize financial outcomes, who can provide specialized advice and methods to decrease expenses and maximize income.
I completely agree; I am 60 years old, recently retired, and have approximately $1,250,000 in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
This is exactly how i wish to get my finances coordinated ahead or retirement. Can I get access to your advisor?
I have "Helene Claire Johnson" as my investment advisor. She has a solid reputation in her field and is a true genius when it comes to diversified portfolios, which help portfolios be less vulnerable to market downturns. She may be a name you are already familiar with; a Newsweek piece helped me to do so. She's a Google-able person.
Thanks for the info, i found her website and sent a message hopefully she replies soon.
21 and saved $40k so far 😎
Wow! Nice man
Great job. Fund a Roth IRA fully each year. It saves on taxes. Also be very careful who you marry. Divorce is expensive. You need someone with your same ideas about money and life.
@@happycook6737 great advice but unless the individual makes below 34k a Roth doesn't provide a tax credit or benefit. Although the advice is sound and I would recommend a Roth for many many reasons.
Great momentum.. now you have no excuse to not hit the $100k savings mark at least once🎉🎉
Buy a house!
Only if a good amount of folks do what you say, just imagine how many millionaires we already have or will have in the future. Not the sad statistics where at least 50% of people are living paycheck to paycheck, even for high income earners. Great contents as always!
"Even for high income earners" - what about personal responsibility? I make over $400k per year and save roughly 87% of my take-home pay (renting an apartment, taking the bus, never eating out, never taking vacations, etc.)
Guess I have it good that I have cheap hobbies, but those "sad statistics" you mentioned aren't even really sad. These are personal failures, not systemic ones. People are spending their money in a way that obviously makes them happy.
It would be all relative. The higher the average income the higher the RRP and taxes. At present we have greedy capitalist Govts that have "deeming rates" and in Australia, they reckon the average income is $120,000AUD, which is a load of BS! That would be the average wage of a degreed engineer or other university discipline (excluding teachers). So our RRP and taxes are based on the average wage of $120,000AUD and the actual average is $69,000AUD and the base wage is $45,905AUD. Very big difference in reality to the deeming rates. Mind you, 1.0AUD is equal to 0.63USD. So anything imported is super expensive.
Supply and demand, everything would get exponentially more expensive.
I was a company for about 10 yrs. The same year new management came in, I was diagnosed with cancer. Had surgery and treatment and went back to work after 3 months. The following year I was let go, as I was going back to check if the cancer was gone. Fortunately, I had saved 6 months of emergency funds. You just never know what life is going to throw at you
How does one become a company?
@@jackfranklin1185 Clown
Single mom here with toddler. Saved and invested 80 percent for the past 4 years. But business is down now. Never have I ever been so proud of myself for being frugal during the highs and the lows is much easier now.
This is an awesome video! I’m just out of college making 55k with no student loans and no car payment. On top of job benefits, I currently put 20% of my paycheck into savings accounts, and about to increase to 30% to save more for a down payment. Been saving 20% of every paycheck since I started working at 16. I’m very fortunate to be in my situation and to have the parents that I do that instilled in me this mindset. This video has incredibly important information and more people need to see this sort of thing.
Well done, good financial discipline! 🎉
Mann. The sky is the limit for you ! Wish I knew this knowledge at the age. But I'm learning now. Your already ahead of the curb. Keep going !
You mean you put the money into investments that make you money right not put it into your bank and wait till your money becomes worth less
Talk to us when you pay rent. And don't say you do cuz you don't
@@wendytestaburger8321 yes I have investments, but I also do have a good amount in my bank account/ treasuries because I’m saving for a down payment and don’t want something to happen to it to where it couldn’t recover by the time I need it or something.
I have been using the 50/30/20 rule for a few years now. I talk with friends who can’t believe I save 20% of my income or even know of this rule. Life style creep is real but this rule makes it so the more money I make I can spend more but also save more. No guilty feeling for spending $1k on eating out if I already know I have saved $1500. Also with this rule any stock by your company (ESPP, RSU), 401k, HSA gets added back into your monthly pay. This made me realize I make way more than I thought on paper.
LOVE that Caleb, great job.
My only correction is that the majority of savings wasn't stuff people can cut out when not in lockdown. Childcare, gas, school events, parking, etc. all eat into people's money and are often required expenses as a feature of getting to and from employment or having children in school. It wasn't only discretionary spending that had nowhere to go - it was day to day "nickle and diming" as a feature of employer expectations.
School expenses? Just say no to school photos, yearbooks, fancy supplies, expensive overnight field trips, etc. Explain to the kids how finances work. Give them an allowance and let them know they can pay their own money for those school things. Do what is free. Buy school supplies at back to school time when they are sold as loss leaders. The number 1 money trap is thinking anything beyond a roof over your head, food to eat is a "must".
Also inflation on all of those things hasn't helped I'm sure. I agree that many people should be more careful with their finances but irresponsibly or excess doesn't explain it all.
@@happycook6737 Yes, but getting to school costs money (for some families). No matter how money conscious you are, leaving your home has costs associated with it for families or anyone not living beside (very near) their place of employment. And while I could forego my children's school things, I don't want to do that either. When they weren't attending classes in person, there weren't all those little fun things I want them to enjoy. Maybe no to the $5 pizza lunch, but the $20 bus excursion to the museum isn't necessary but is valuable and an important experience. My point is that there was simply much less of both required expenses (such as child care and gas) AND simple expenses as part of the day to day.
Yes, exactly! Plus, in the US some people used stimulus payments to help boost their savings, or there were other Covid relief programs that helped cut back on things that would've been financial strains. Lockdown was an exceptional case for a lot of reasons.
@@nicokelly6453 saved them just to spend them later smh
150k and I save 55% every month. I've long since gotten over wasting money on things I don't need. It wasn't always like that. But eventually I started feeling happier about having a big savings than I did about instant gratification. I'm probably over saving and not invensting enough of it.
140k and same. It's like a RPG - at first the low numbers suck, but then as you progress the numbers get bigger and you want it to keep growing. Game theory at its best ^_^
I am at 780k (household) and I am only able to save 40% of my after tax take home pay. I am not factoring in the 401ks which do get maxed out. Biggest issue is crazy expensive childcare that wife insists on. I love saving money and my wife loves spending money. That is the issue 😂
@@Matys1975 What's your profession?
@@Matys1975 I am at ~$425k (single) and save roughly 87% of my take-home pay, which likely outpaces your household. Let this be a cautionary tale about marriage for all who read!
@@ladye2818probably sells feet pics on onlyfans
Love this. It doesn't surprise me that this many people live beyond their means. People love to buy buy and don't plan for their future. Just because you're making good money now doesn't guarantee that you will make this when you retire. You can get laid off at anytime. My dad told me save as much as you can. I'm fugal because that's how he raised me. He told me when you buy a house save up that money for 18 months of mortgage just in case you lose your job and save for an emergency. Buy what you need and not what you want. When you buy a house, he said wait at least five years before you make upgrades like on your kitchen or bathroom. If they are in good condition, it's just for looks and save that money for house repairs because on a resale home you don't know when something needs to be repaired. I know this because I had to do house repairs on my home the first year of ownership.
Well said Courtney
As the saying goes, "a fool and his money is easily parted". Spending $500 a month while earning $60k a year is bonkers that's 10% of their income, crazy.
Great fathers are rare to find! This is great counsel that he gave you. You are blessed.
Well, this makes me feel pretty good. I save 36% of my gross pay (or 50% of my net pay). I control my expenses so that allows me to save more. I even make my own laundry detergent. :)
What's the recipe if you don't mind?
The recipe is to have a good income. I was struggling 10-15 years ago. But I also made half of what I make now. Of course spending wisely too but there’s a minimum you gotta have to even start thinking about putting money away.
@@daviddaviedavidson Definitely but there's also people who throw away their money on things they don't need.
@@chimera5542 for sure …all the time. You’re right.
There’s no need to go overboard with the savings, unless you like making your own laundry detergent. Some people get unhealthily obsessed with saving every penny, but it’s ok to spend some of the money you make for enjoyment as well
I'm fully focused on increasing my income right now. I am not someone that struggles with living paycheck to paycheck which is a blessing, but I have dreams of working for myself to exponentially increase my income. This has forced me to increase my savings rate to around 50% for the last few months which has given me the runway I need (and plenty more) to take a chance on myself and my business to see what I can really do with it while I'm young and have fairly limited responsibilities. It all starts with the basics though!! Excellent work on this one man.
Damnnn 50% is insane. excellent work yourself
@@humphrey It was a lot of work, but like I said, I really don't have much responsibility right now. My main goal has been to save up at least 1-year's worth of an emergency fund so that I could detach from my 9-5 and work on my business full-time which I'm blessed to be able to say I've achieved. Even though my business is mainly my RUclips channel, being able to focus my full-time effort on it with 12 months of savings (without counting my business income) was that final step I needed to take the leap.
Awesome, unfortunately not everyone can have side hustles... :(
I did this out already because I was starting my dividend portfolio and wanted to see how long it would take to reach certain points.
I make about 24.4k after taxes and saving 10k a year (average of 833 a month), with the plan being a split between SCHD, JEPI, and USOI.
The crazy thing is, even saving that much it still takes about 7-8 years with DRIP to break the first 100k.
Yes, it does take awhile but once you hit 100K the next 100K is easier!
In those 7-8 years your income will increase for sure! People generally don’t stay in those jobs for long
You live off 14k? That's impressive and hard to do. Your income will likely increase over time allowing you to save even more. Then your investments will grow more and more on their own. It will grow exponentially. The first 100k is hard, 200k is a bit easier, and it just gets faster and easier for each additional 100k.
Your videos are always on point ❤ You and Gary Joe Wilde are highly recommendable investing coaches every investor who wants to get rich investing must work with. Unfortunately, don't know why Gary chose not to own a video channel here like other experts. He is long-established and very advanced in the field.
@higson Run a quick search about him you might see something... I remember Chris and Brian often recommended and promoted him in their early vids... It's been a while though. Learned he is a mentor to many reputable pros here.
I prefer gary's method; exactly what i wanted very simple&straight forward you get to monitor your positions. In all honesty, wish i had known about him earlier. i've smoothly secured over 40K gain with my positions a few months with him.
@@sonyablack2015 Same here. Convincing me was hard now I wish I knew him before the crash. lol
scam
What happened to SVB is really scary, and goes to show that no corporation, however big, is immune to collapse. I have always had a deep-seated mistrust for corporations. I have plans to pull out most of my money, but don't know what to do with $350k sitting idly. I'd like to go into the stock market, maybe. Any ideas?
All big corps are just a cohort of centralised system working together, and any damage to one can have a dangerous ripple effect on every other one. I learned a long time ago to not trust corporations. Most of my money is in the stock market and my businesses. I keep only what I need to spend in my checking account.
@@LarsBergstrom-uh2eu Ironically, these are the conditions in which life-changing money is made by those who remain calm, patient, and take controlled risks. Volatility goes both ways. The banks are in a big crisis. The market looks very shaky. The bigger the red candles, the bigger the green ones. I have made over $280k in the last 4 months by investing through my FA.
@@Erinmills98 Wow. I've heard similar success story from people who work with advisors. How do I get in touch with yours, please?
@@AstaKristjan My financial advisor, "KATHLEEN YANELLI CAROLE", is a highly qualified and experienced professional in the financial market. She possesses a broad understanding of portfolio diversification and is recognized as an expert in this field.
@@Erinmills98 Definitely gonna check her out.
You should do a graph on people who only make roughly 2,000 a month
I am 34 and I just NEVER eat out and just live at my parent's home. That is how you save money. I look like a big baby who didn't grow up, but with inflation rates like this, this is what I can do.
Dude rent a cheap room. Living with your parents is not a good look, with a good paying job (you can get a high paying trade job without college education) you can still save plenty while renting a room. I turn 28 and am doing this currently, soon to be house hacking a rental property, Haven’t lived with my parents since 20 and even at that age it felt too long. I have friends still living with their parents, it seems way too common now days. Y’all gotta leave the nest, just being real.
@@JesseGMan7 I agree to some extent, but IF he is actually saving money at a fairly rapid rate and is not being lazy, there is nothing wrong with that.
IF I did the same thing, my net worth would be close to a million at 31 years old. So it honestly depends on the discipline you have in that situation.
Sure, you can say its not a good look, but IF life is good at home and he has a higher net worth than you THEN you would not be in the position to say this.
There are plenty of people who left their parents home much earlier than me and they live a sad broke life.
@@FloppyDobbys If he wants to save money he can become an OTR truck driver and live for free in the truck. At 34 it’s past the time to leave the nest, unless you’re a special case of helping care for your parents or have disabilities. That’s my opinion.
And what age did those people leave home (“living a sad broke life”). Cuz I understand 25 maybe 27 at the latest or coming back for a year or 2 if things went sour in life to get back on your feet. But to have never moved out at 30 or older c’mon!
It is other way to say he’s a loser
@@JesseGMan7not a good look for who? Why should he care about what others think?
Humphrey please don’t stop making videos you are very knowledgeable and skilled at breaking down finances in layman’s terms. I pray that God blesses you and your family for the hard work you put in! THANK YOUUUU ❤
Well I'd be retiring or working less in 5 years and I'm only curious how people split their pay, how much of it goes into savings, spendings or investments?? I earn around $165K per year but nothing to show for it yet
There are actually a lot of ways to make high yields in a crisis, but such trades are best done under the supervision of Financial advisor.
@Craig Daniels I got into a bit of dilemma myself due to this chaotic market, wasn't sure if to sell or just wait a little longer, 75% of my portfolio was tanking and in the red, but I began gaining clarity and have more confidence in my investment through an investment adviser, I know most DlY - lnvestor like me would say advisors aren't essential, but come to think of it, they're better trained and equipped at this and if I have to give just a little amounting fees for me to be able to net $750K in less than 2 years, I truly don't mind.
@@maiadazz My portfolio has been in the gutter for the entire year, so I started researching new ways to profit in the market, but everything I tried just seemed to miss the mark. Please let us know the name of your financial advisor.
@@jeromesand I have stayed away from all of the issues that the erratic market presents. Today, reading, research, patience, and seeking guidance when necessary are the greatest ways to break into the market. I merely copy Melissa Scott Glazner, a CFA, whose actions I witnessed on Bloomberg Business News because I am unable to handle my portfolio owing to the nature of my profession. Ever since, everything has been easy.
Age 62, I put away 26% of my gross pay for retirement. Another 13% monthly goes to a savings account for irregular bills like insurance and capital projects like a new roof or HVAC system.
Already gained so much knowledge from you man! We definitely need to spread awareness about saving and how important it is
thank you my bro, absolutely
Humphrey does well and appreciate but, lucky for me i had parents or i will say my mom instilled the need for savings at an early age so it comes 2nd nature to me. Personal finance rocks!!
Also have to add in insurance as a fixed expense. School never teaches you that you have to pay monthly for Medical, Dental, and Vision, at least in America
A part time job really makes a big difference! I work about 14 hours a week in a deli & it's been a big help. After 3 years I'd like to quit but afraid to
2 things:
1) It would be useful to clarify if savings rate mentioned is based on net or gross income (unless I missed it).
2) What is the criteria used to define living paycheck-to-paycheck? When it comes to the percentage of wealthier individuals that are supposedly living paycheck-to-paycheck, I would be curious to know if they are taking into account retirement/savings contributions. I could see some people that employ a zero-based budgeting strategy mistakenly claiming that they live paycheck-to-paycheck.
I share your videos with my family and friends all the time. Thank you for always making these concepts feel doable!
Awesome! Thank you!
Prioritizing savings is great but how much you need to save depends on how much you want to have in the future- if I am ok with living on the streets or in the h of nowhere, when people refuse to employ me anymore, I probably don't need to save anything. But most people don't want to end up there, so saving is more important than most people realize. Nice content!
In what planet do you spend $125 on utilities? My electric bill alone is $125. Then water is $45 and sewage is $75 and Natural gas is $75. That alone is $420 a month
Yup, very unrealistic.
Common in cities like NYC. I don't pay for water, sewage or natural gas. Just an electric bill.
@@dannyaskins9754same, I just pay electric and cooking gas 🤷🏻♀️
I make around 650,000 Indian Rupees (8,000 USD approx) per annum, I live a frugal life and save around 45-50% per month. I am 37 years old but i plan to retire before 50. Even when i get pay raise i like to keep my lifestyle same.
Choosing a Roth IRA is advantageous as it uses after-tax funds and allows tax-free growth. When I retired, I had $3M million saved, and I won't be taxed on my withdrawals.
Currently, my primary worry is how to increase revenue during periods of quantitative easing. I cannot afford to witness my savings dwindle away.
I paused the video to add up what I save. I'm saving 29% of every pay check. 23% for retirement and 6% for whatever I want ( home upgrades, toys, dinners out, travel)
If you are living paycheck to paycheck and the problem isn’t unnecessary spending but bills on necessities, you just need a bigger shovel at that point
Was in the same situation a few months ago, no matter how I saved it’d always get wiped out by student loans, insurance, etc. got a new job that’s triple the income ($52k) I used to have and now I’m able to better practice good saving habits
It's tough to save money. I'm thankful my relative helped me out. Things are tougher now, but it'll just take some time and a lot more effort.
From personal experience, one bit of advice I have is recommending people treat quarterly and yearly expenses as monthly expenses. Example would be property taxes for those that own their own home. Treat your yearly property taxes as a monthly expense in the same manner you would rent. If you have $2400 a year in property taxes, you've technically got $200 a month in rent. Health insurance paid quarterly is broken down the same way into a monthly expense.
I'm fortunate where my monthly expenses allow me to save money, but I also worry about not putting enough money away. It's a tough battle. Biggest thing I did was cut the cable cord and just have phone + high-speed internet with no Netflix, Hulu, Disney+, Amazon Prime, or any streaming services. It's 100% worth it.
That makes a lot of sense for anyone doing a monthly budget. Figure out how much those things cost every month so they're budgeted in and not a surprise bill.
I can't stick to a monthly budget no matter how much I try. My spending varies greatly between months. Sometimes I'll load up on Costco, and other months I might not even enter a store. I just try to keep my yearly spending between 20-30k and that seems to work for me.
I like to save 30% of my net income minimum every month and this month I’m saving 35.7% 🙌🏽
I started recently watching similar videos and I’ve realized that I’m a saving genius. I, my wife with 2 little kids in our mid 30s save in a good month around 5k a month. In a bad month (when we pay more services, travel, dentist, etc..) we save around 2k net.
I’m happy to announce that After having graduated about a year and a half ago, I’ve gotten a decent job to kick start my life with, and within the past 6 months I’ve stashed about 60% of my savings and am currently sitting at 11k in my savings. I’ve been wanting to decrease the ratio I’ve been saving a bit this summer to enjoy myself a bit but at this point seeing my bank account grow is much more addictive.
My girlfriend and her family had started saving from a very early age and I’ve always seen myself in a playful competition with her, since her savings is at 80k. However, she is getting a PhD and is planning on using it on her loan for her final years of her program. So I’ve been wanting to save as much money as I can while I still live with my parents.
Even making 100k as a family, -1/3 for taxes = 67 - 15k for retirement, =52k - 15k for rent = 37k, 6k for a car payment = 31k, 6k for family medical, = 25k, -12k for food, leaves about 13k left for auto insurance, gas and any socializing, electric, insurance, heating etc,
How do you pay 33% in taxes with 15k going to retirement?
@Igor Icovski yea exactly, and being married makes your taxes waaaaay lower, even someone making $108k/yr before 401k contributions in California only pays 19% in taxes if filing jointly. After contributing a reasonable 6% in one's 401k, that number falls to less than 18% if married
Nothing like a finance video to make me realize financially I am very far behind from where i’d want to be
Your sister definitely knows what she is doing! Even before the end result I was like damn!!!!!🙌🏾👐🏾
About 50% for taxes, 10% of gross to TFSA (roth-ish). 20% daily savings for rent and emergencies.
I remember when I use to live paycheck to paycheck that’s was no joke but now I’m able to save my whole paycheck every time I get paid and I use to think it’s not possible to do but saving the whole 100% of your paycheck every two weeks is a big goal for me and I’m very proud of myself knowing that I’m can pay off my rent in a whole year plus I live in nyc so rent is not cheap another good thing is that I’m single don’t have kids don’t smoke and don’t drink I live below my means and I can care less about living a huge lifestyle like I see another’s out here doing which is sad if u ask me I’m just happy and very blessed
Thats great to hear, but make sure to show thanks for whatever brought you to this situation. It may not seem like it at first but you are very lucky. Being able to save 100% of your paycheck means something fishy is going on with your housing and/or food situation. Remember that hard work is not what got you there, it was mostly chance. Be thankful and help others around you because their happiness is your happiness
If you can afford to save that much while paying rent, it might be even better to spend a tad more and get into a condo.
There are allot of factors that could help make renting the better option, just food for thought if it applies to you.
Great video by Humphrey as always!
ty!!!
Another note if you have no savings is to look into government programs (this is for people who don’t have high incomes of course). Is rental, child-care, and food assistance available in your area? If so, this could help you save for things like moving expenses and education for you to better your situation.
Nice video. When looking at the budget though, you left out that most people have to pay something toward their work benefits (e.g. health insurance), so take-home pay might be even less.
It feels good to see the market in green, but just how long until we actually break even, I’m the average retail trader, DCA-ing, buying and holding on to stocks for eons, but it’s like I’m up 5% today and down 17% the next week, Yes the market is very Darwinian, there’s winners and losers, and it’s looking like I’ve been on a losing streak, while others make huge 6figure gains in the same market. What strategies are these folks using?
So what I do is buy companies that are doing good things, executing on business plans and then short companies that are missing earnings, it’s as simple as that.
@@georgemuller2329 we’ve been in a rally for the last decade, you just gotta accept not everyone is as knowledgeable in the market to handle the opportunities a crash market presents, and unfortunately for me too, I got in 2019 right before the market’s melting point, I just hope I recover soon enough before retirement. S`tay strong. I think the market will suffer more downtrends before full recovery, esp. with the inflation, hiked interest rate and looming recession bound to happen 2023, you should understand the market is not just finance and valuation, it’s history, it’s market psychology, it’s understanding how the world moves, which is why at this point in time, it’s ideal to work with an Investment-adviser with an unparalleled track record, from first hand experience, I could say they stand a better chance than most of us ever would and it has been reflecting on my portfolio. I made over $850k in net gains this year alone and I’m unbothered about the market outcomes cause I’m certain I’ll make a killing, it’s all perspective guys.
@@haywarddisean2539 Nicely said, I was thinking about going that route too, RUclipsrs has been going on about opportunities at stake in this present market and I’d really love to set my portfolio up for whatever is coming 2023, could you recommend this coach that guides you?
@@cruzchristiana991 The coach I use is actually quite known, Emily Louisa Bahr. She has a wide presence on the web, so you can just search her.
@@guesswilson290 Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
I respect this. But can we get a breakdown of pay that includes maybe employee health ins, life ins etc. That is a necessity if u have a family and lowers the take home pay for most.
If the insurances are offered through the employer, it is already factored into the take home pay
This may be a dumb question, but can you define "saving?" If I have a healthy emergency savings account and forward a large percentage of my paycheck to my investments (401k, Roth, additional real estate principal) is this considered "saving" by your definition? Thanks!
Just a comment relating to 10:30 - in a real world scenario paying off the highest interest would be ideal because yo'ure saving money rather than spending it to finance your debt.
However depending on your available money, sometimes it's easier paying off the lowest debt first, because it frees up more money so that yo'ure not forced into a debt or owing money, it also allows you to create savings over a short term period.
These youtube videos are super helpful to novice investors. I changed my retirement saving rate a few years ago after watching a bunch of videos. I have maxed out my 401k and Roth IRA going on three years now. Something like that was never on my radar before. Now Im looking at looking at building passive income streams on top of my fulltime job. Thanks for all the info!
Great to hear Masood!!!
The key is always feeling like you're living paycheck to paycheck. If you've maxed out your emergency fund, you should have all your money working for you in whatever investment vehicle you use. This way, you're never tempted to spend the "excess" income
Location location location.... 200k on the Bay Area is like 100k or less in the midwest city.
BnPL success is a clear indication of our addiction to consumerism.
It is possible if you live with your parents, these days. Most young people in the USA and UK leave their parents house to early. There is a very high price for that.
I'm in that 27.5% but it's not for the reason you think. Almost all of my close family and friends make minimum wage or barely above it, and some struggle even to maintain that. Inflation has really hit them hard, and many have gone through all of the savings they had accumulated before covid. I can't sit here putting $5k in my savings account every month while my mom's phone doesn't work because it's so old they decommissioned the network (3g), or or my best friend has to pray every time he goes to work that he doesn't get pulled over because he can't afford to renew his car registration, or my 17 year old sister-in-law can't afford her college tuition and has to drop out and get job just to help her parents pay for rent and food. The reality is that a person doesn't earn income in a bubble.
Oh wow, that's tough, especially if you have a close-knit family and dear friends who are practically family. It's like you love them so much that their pain is your pain. Are you able to put money aside for your own future, even if it's just $50 a pay period? Maybe if you can stash that in a high yield savings you can still see some benefit.
You sound like a decent person and great son/brother in law/friend and I wish you well ❤️
I'm 32, just paid off all debt. I travel for work (airfare, hotel, car rental paid for). I sold my car, no house or apartment. It's a sacrifice being away from home, but i'm saving tons of money. Have about 20K saved up so far. I love this channel and these comments motivate me!
What field do you work in? Traveling for work sounds awesome.
Utilities are variable. What I pay in December is not the same as March, June or September. My electricity bill is high in summer and my natural gas bill is high in winter. It used to be that in winter I was paying about $125 a month and summer was between $200-$300 a month. PG&E raised their rates astronomically and the bill in February was over $500. I can’t imagine what our summer bill will be. Probably in the $900 range. I keep my house around 82 in the summer and 64 in the winter. If I kept it at 72 for summer and 68 for winter, like it’s recommended in a business setting, I’m sure my bill would be over $1000 a month.
I'm curious how they defined "paycheck-to-paycheck." Similar polls/surveys have respondents saying they loved paycheck to paycheck but they were making contributions to 401k and other retirement accounts.
What’s up man! Just discovered your channel today and have been binge watching your vids. All solid advice and great quality content. Keep it up!
hey Bryceless, thanks man! I appreciate that. Let me know what else youd love to see, and thanks for the comment
Excellent video. People blew all of those stimulus checks with nothing to show for it.
thanks Will!
Not me
Loved the "stop being an alcoholic" at 8:29 lol
im a 27 yr old male living in singapore earning a mere 25k sgd annually with a savings rate of 30%. i spend a 17% of my income paying off my loans. Is really tough out here then again im ever grateful to have a job.
My first job out of college, I made $60k and saved 50% of my net income… Now that I make $100k, it’s still only 50%. Lifestyle inflation is real, but honestly, it’s worth the nicer quality of living.
At least 10 percent of your gross income. Ideally between 25 and 50 percent of your income will set you on the fast track to financial freedom.
Yes sir exactly
Keeping my costs very low. I only earn like 2700 + 1500 from my own business a month and I manage to save around 1000 up to a 1200 each month.
Can you clarify the saving ratio is per pre-tax or after tax incomes? If it is after tax taking-home money, how would you clarify pre-tax 401K contribution or IRA?
I am a single 33 year old guy. I am able to save 80% of my income. The key here is to stay single and not have kids! I don’t have to worry about saving up for kids college and other kids expenses.
Sad.
Lol i agree, whats the point? 😂The IRS will take ur money when you die or your relative will go for shopping spree when dead and gone. Save some but enjoy life. ✌🏽
or a life
And live with your parents?
You can save some more if you stop eating. Hey maybe trade shoes for flip flops and save 99%.
I’m saving 74% of my income. Currently own a home, drive an old car that’s paid off and no school or credit card debt. Only debt is a home mortgage at 4%. I was approved for a 500k loan but bought a simple one story home for 198k. 4 bed 2 bath, with pool & hot tub in a top school district if I needed to sell. I live below my means. No kids. No regrets.
very nice, mark.
What state do you live in? Today's deal getter homes cost 500k in California
@@twinkletooty8358 Dallas Texas
why do u have a 4 bedroom if u dont have kids? just curious. do u have a lot of guests or work from home?
@@trailertrish planning on having kids in the future. I got married last year. Yes I work from home a lot as does my wife
Ive been saving 35-42% of my monthly income since i was 21. 23 now and gearing up to buy an investment property
Thank you for all these information
Nothing but quality and value comes from this channel. I love it.
I appreciate that!
That is ridiculous that still 28% of people making over $200,000 are living pay check to paycheck. I’m in the $50,000 range and the 2 months I get paid 3 times the 3rd one goes directly into savings. Also, most times I put away a quart of my paycheck to savings.
I agree with you putting 10 percent check-in emergency funds and 15 percent in saving and 15 percent in retirement. Every time I get a raise, I add half of the percent raise to my funds. Once max my emergency fund for the year rest, I move to my roth ira. Grow my divdend payout in my roth ira. When I retire, I'm good to go.
I heard the spike was because they changed the laws about moving your money in and out of savings accounts and that made the available money (the metric you’re using) go up a lot. I’m not a finance guru FYI
After years of never saving, one day I said enough is enough. 25% of my income gets saved and invested before anyone gets paid.
Great video! Love the set, editing, and case studies!
Glad you enjoyed it :D
"or maybe don't drink alcohol at all - it's more healthy". Okay, Humphrey, now I LOVE your channel, but my single malt whisky is literally in the Fixed Expenses section in my consumables column on my personal finance spreadsheet. I love seeing at year end what I spent on Scotch 🤣
hahaha Lise! fair enough
Hey, as long as it's in the budget, yaknow? 🤷😂
Yea isn't poisoning yourself so awesome?
I like this woman. Red label the best
Depending on what week it is in the month (saving for bills) I save abt 28-42 percent
Thank you for your video. Notes taken 👍
I was able to save 100k in 4 years. I know, it's not much of an accomplishment or achievement at the age of 30, but considering that I live in Southeast Asia where I don't have to pay Uncle Sam, I'm happy I don't have live paycheck to paycheck.
That's a huge accomplishment, don't sell yourself short, keep up the good work 👍🏾
Saving 25 thousand dollars a year is excellent not sure where youre coming from thinking that is not an accomplishment
Very curious on how you can live paycheck to paycheck making 100k a year. That's crazy😭
Lifestyle creep and children, I assume. I have avoided both and have managed at least 20% savings rate most of my career making less than half that amount for the majority of the time.
When I hear these paycheck to paycheck statistics for high earners, I always wonder if it's self reported and on what basis. I FEEL like I'm living paycheck to paycheck because I needed to pull $2700 from my house fund to pay off my credit card balance in full after a vacation and some unexpected expenses. However, I sock away 19% into my 401k and save over $2k towards my short to medium term savings goals automatically each paycheck (biweekly).
Don't worry if someone tells you to come to Brazil. Brazil came to you through buy now pay later. We live like that since I was born, and we can pay everything in 12 statements directly on the credit card.
It all just seems out of reach, or my expectations of financial independence are very high.
I am 29, I started making 100k last year, my net worth is about 200k. I was only able to save this amount the last 4 years by living with my family.
With inflation and current interest rates I would barely be able to afford a 130k mortgage. This means if I wanted a decent 200k condo in my area I need 70k down at least.
Assuming 3% inflation, by the time I retire in 35 years I would need about 2.5million dollars to support a 40k life in today's money. This is just on my needs alone.
I've just been depressed lately because becoming financially free by age 40-50 isn't realistic (or safe without a huge nest egg).
I enjoy my job, but unless I make big moves I won't be able to live my "best life"
Those big spikes in savings in 2020 wouldn’t happen to come from multiple stimulus checks and not lack of average American discipline would it?
I share a house with my sister and her family and we split the bills and expenses. I've been putting away 400 dollars a month lately .
Would like to hear if you have some suggestions on how to start setting up a child for financial success early.
The problem with using Covid as an example is because you leave out a lot of important things that happened during this time. Many ppl recieve stimulus checks, ppl had rent and mortgage freezes, more ppl were able to work remote giving them the freedom to live in lower cost areas and many more factors to y ppl were saving. It doesn’t just boil down to “poor” saving habits.
Super helpful, thank you! I like that you also put an optimistic spin on things - it’s an important mindset to remember.
I have a fair amount of debt (student loans) and not very much in savings (but enough to cover 3 months of cost of living). I’m planning on saving more this year now that I have a new job. Especially with increased interest rates on my debt, I feel like the priority is paying off the debt before I do any serious saving or investing (because the gains would be smaller than what I’m spending on interest). Can you illustrate why/how it’s important to save and pay off debt at the same time? Or am I right to try and snowball off my debt before making any major investments/savings?
i save a little more than 50% each month . i spend only 1\5 of my income . rest goes into emergency savings . 23 no loans , no car , no bike . nada . i live at my company hostel , i walk to work . i eat at home mostly but a couple times a week i ordered out . my biggest purchase by far is a rm3k pc . i almost had an impulse to buy a 7k one but common sense shut me down .
i benefited from being a introvert , didn't bother to go out
i grow up being middle class , didn't get to own much
still didn't care to own much
Should the percentage be calculated with pre-tax or post-tax income?
$600 eating out???? Holy shit 💀
to be fair it's monthly 😂
Man, these videos always make me look at my situation differently. I forgot about adding the value of my cars to my networth. I'm back in the green but definitely over leveraged in vehicles! I've gotta kick it into high gear and get some more growth going
27, got about 10k for an emergency and 35k in etf's
Saving 25% a month + whatever is left at the end of the month
The utilities cost in your example blew my mind. My utilities on a very modest home (
I also think that in 2020 most people had excess income from the extra unemployment. The few checks did not really make a dent, people used them to pay for debt.
yeah that is true
It's always a good day when you upload. Shoutout to you and the Hump Days team, it's some of the best free personal finance content out there!
I personally would add paying yourself before the necessities. Like $100 every paycheck will automatically get transferred into your savings without you having to do it. Live on less. Make it a habit and you will slowly adjust to getting paid "less" per paycheck. If you can live off that then slowly start adding more and more to the savings. Add like an extra $50 to see if you can handle the risk tolerance of having less money. Just keep doing it til you've reached the most you feel comfortable with saving per paycheck while having enough for necessities and having fun.
Thanks for all of the content!
Should pre-tax 401k contributions be factored into your savings rate? I would argue to include it even if it’s not immediately liquid or accessible at the moment, it’s still a potentially huge portion of your total assets.
So the FRED definition of savings rate is simply Personal Income - personal taxes and personal outlays. From my interpretation, it would NOT include 401k/IRA. So if youre saving 20% but most of that is in 401k IRA I still think that is A OK!
Are we sure that the jump in personal savings in 2020 wasn't due to the stimulus payments? I know I was able to put my stimulus money into savings for awhile until I decided to put it toward an extra payment on the mortgage. That sounds about right for the timing and would make more sense.
Thanks!✌