How Much of Your Gross Income Do You Save

I refuse to answer this question on the grounds that it might incriminate me, and label me as irresponsible.

With my husband's old job we were able to put a little away but at this point we are unable to put any back. Which I know is bad that that's life. I wish we could though cause it causes stress!

Based on my calculations derived from the statutory limit of one of your savings accounts, you also spend 88,800. dollars a year. I would bet my first born, that is more than some people who are answering your question make in a year.

My point is not to be clever but to make a few people feel a little better about their savings situation. If your household income is only 40,000 a year and you save 5% that is far more impressive than someone making 120,000 a year and saving 25%.

Our household income is around 120,000 and we save 50%, woot, that still means we are spending 60,000 a year and that isn't a bad lifestyle.

Can you tell I hate these kinds of questions? They seem to make rich people feel more responsible and poor people feel like they have done something wrong. :(
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Okay, I have to add, "houses costing 28% of their income" is not very clear. A house that costs 28% of my income would be about a 35,000 dollar home. What you are talking about is a mortgage payment that is 28% of their income.

This again goes to relativity. Whether or not a mortgage is 28% of your income depends on how much the home costs, how much you put down, what rate you lock in at. Are you talking gross or net income? What static costs do you have? Someone who's employer pays all their healthcare costs may have an extra 10,000 a year more than you. If he only makes 40,000 he now has 25% right there.

Do you see how this is not a simple answer?

If you really want *us* to help you then lay out ALL your financial info for us: salary, debts, savings, retirement etc.....you keep asking these types of questions.

I have been in the mortgage profession over 20 years. I have seen ALL walks of life, from millionaires to very poor. I have seen people that make $30,000 raise a family of 5 & have one year of salary in the bank and no debt. I have seen Doctors who make hundreds of thousands a year and cannot qualify to refinance cause there debt is so high that their DTI ratios won't qualify them.

Please seek a professional or lay it out for us to help you.

What people can "afford" is simply what they CHOOSE to spend their money on (unless, of course, the cost is greater than their total income). The less money you have the bigger slice of that income your going to choose to spend on basics like housing. If you spend money on one thing you don't have that same money left over to spend on something else.

People who spend 30% on a mortgage don't have that 30% available to spend on other things. If I make $2000 a month, I might be able to "afford" a $600 (30%) 1 bedroom apartment some place, but I CAN'T afford to go on vacations or put my kid in pricey activities etc. If I make $15,000 a month, I might NOT be able to "afford" more than $2000 (13%) in rent but I CAN "afford" expensive vacations, fancy dinners out, ballet, soccer etc.

Stop worrying about what PERCENT everyone else is spending or saving and examine your own finances with only your family's needs in mind. Do you have your needs met? Do you get to do what you want? Does your money create opportunities rather than stresses?

The guideline of 28% of gross income on housing is NOT just the mortgage payment. It's taxes, PMI, insurance, upkeep, maintenance etc.

This is the biggest way people get themselves in trouble is they get a mortgage payment that is 28% of their gross income and then they are SCREWED with the "extras" that come with home ownership.

My housing is about 10%..... but I know my financial style.
First, I have $63,000 in student loans that I have to pay off and 2nd I'm not making the income that my expensive Master's Degree SHOULD have netted me :-(
2nd - I like to eat out. a LOT. I also like to eat steak. and I LOVE a fresh salad with cut up fresh veggies. Which is almost more expensive than the steak!!!!!!
3rd - if my daughter is really good at her sport and wants to join a club team.... I'm going to be out $1500 for the season, minimum. FOR JUST THE ONE SPORT - that's not including swimming lessons, coaching fees etc. But her participation in those activities is more important to me than having a granite countertop. But that's just OUR priorities.

So, if I spent 28% of my gross income on housing I wouldn't be able to spend on the other areas that I know I won't be in line with the societal norms. So, you have to balance.

As far as savings..... I try. I sure don't save 25%. I automatically move 10% into a savings with my direct deposit.... but then we have to purchase new tires. Or whatever. And it gets eaten up. Plus we are paying off MEGA debt from when I wasn't working BEFORE i decided to go back to school..... so that eats into it as well.

I also know that the % is hugely geographical. I moved here from Chicago, but I made the same amount of money there as I do here. Yet, I would have been living in the slums AND still paying MORE than 28% of my gross income - there it's MUCH higher.... especially if you live IN the city. Here, though, cost of living is MUCH lower and I'm able to get a nice house for only 10% of our gross income.

0%

Oh my GOD! I need to move where "Mom2many" lives.
We are in a 4 bedroom, 2 bath apartment and pay almost $1,500.

J.:

If you have one year's salary in your savings - liquid asset - you should be good.

Don't save so much that you can't live your life. Does that make sense? Saving for a rainy day is a GOOD thing - no - it's a GREAT thing! However, when one saves too much - they forget to live their lives. The money isn't going to do you any good if you are dead. So please remember to vacation and take care of yourself.

We save what works for us and our budget. We are building our savings back up after 10 months of unemployment - so glad we had investments and our savings!! We didn't use welfare nor did we use food stamps - even though I'm sure we qualified. We had our savings.

Sit back and look at your savings - investments - go to a professional financial manager to ensure you are getting the most out of your money. It doesn't matter what WE do. Our incomes and lives are NOT the same. So if I told you we saved $1K a month - in savings alone - not investments - that might seem obscene for some....so you need to seek a professional financial counselor to help you meet your financial goals.

If you, your husband or father/mother served in the military - you qualify for USAA services. They offer free financial management planning with your account services (banking, auto insurance, life insurance, health insurance and investments).

Good luck!

Eta: did you just change this question? Right now, we pay 0% of our income on our mortgage because our home is paid off.

You know, there's so much that this question entails. You do realize that there are a LOT of people living paycheck to paycheck in this economy and the word "save" is foreign to them, right?
I think O. good thing to consider is where you're at in you life. Does your saving impede in your activities? Activities that are being missed? Saving $50k a year and never taking a vacation? I'd have issue with that. Some wouldn't.
The concepts of spending and saving run deep in most of us from childhood on...
We've always purchased homes at about 50% of what we "qualify" for.
Being house poor doesn't interest us either.

Most people who own homes in NJ do spend about 30% of their gross income on housing because our taxes are so high. It is very hard to buy a home for under 250,000 unless it has a lot of issues, is very small, or is in a bad/dangerous town. So yes, saving 25.8 of your money is good. For those that put it into their houses, in general, that tends to be a good investment for most people.

We spend about 13% of our gross income on our mortgage, and we were very careful when refinancing last year to keep that number low, 'just in case'.

We probably save about 25%+ a month, we have money going directly into three savings accounts (Kiddo's education/general savings/property taxes) which helps, so it never appears in checking.

I think you're doing really well!

I'm impressed with your organization! We save roughly 25% of our income as well. When we bought our house, I read that people should spend no more than a third of their monthly income on a mortgage payment so you're husband is probably right on track in his thinking. I know most of our friends do not save much at all, and have really nice houses(and big mortgages) to show for it.

Wow. This question makes my head hurt. I teach AP English, and this is way too much math for me.

The heart of the answer is that we could have bought a much more expensive house than we did 13 years ago, but we didn't want to be house poor. We also keep a very tight budget, and plan carefully for vacations. We include retirement, college savings, vacation and other savings in our budget, so everything fits in the planned budget. My husband works in sales, so some months he makes much more than other months, so we have to be very disciplined. During the good months we have to save more to make up for the lean months.

Every month we save $500 for college, $400 for retirement (in addition to my teacher's retirement plan), another $500 for vacation/other savings. Our house payment is $1100, but we pay $1400 because we're paying it off early. They house will be paid off in 9 years. We don't have any credit card debt. Sometimes we save extra money. Every summer we go on vacation for a week, and we go somewhere different every year. We don't eat out too often, maybe once a week.

I have no idea how all of that works out as far as percentages.

My income is quite gross as I am unemployed!

I'm not sure percentages matter. If someone's gross is 1/10th someone else's, even if they're saving the same percentage, it's a way different amount. Same with what percentage goes to a mortgage etc. I'm in finance. Work with bottom line numbers.

I have no clue what the gross is. Probably around $2,000 of which about $1400 makes it to our pockets. A good chunk goes into the 401k and then insurance.

I don't feel like doing the math but we pay $500 for rent on a 4 bedroom, one bath house.

Our biggest expense is our kids (8 of them).

15%

wait...what question do you want answered again, the title or the end? lol

we spend 15% on the mortgage. We save about 50%.

We save the minimum 15% via 401K right now. Our housing cost is 25% of our gross income. We rarely eat out or go on vacation. Our cars are models from 2003 and 2006. We try to limit the heat and air to keep utility costs low. We rely on bonus income for the rest of our savings and due to two layoffs within the past 4 years, that hasn't been great. I think that saving 25% is fantastic. Good-luck.

The math hurts...good thing my husband has an actuarial background. All I know is we live off of his base salary which is under 40% of his total gross income and his bonuses and commissions go into savings and investments. He's fiscally conservative to a fault.