# How much you guys saves ?



## gladaki (Feb 23, 2014)

How much percentage of income you guys generally save ? ..
Do you count rrsp contribution in that savings as well ?
Another question about wealthy barber which I started reading recently 
Wealthy barber say save 10%, what it really means ? Also what exactly pay yourself means ?


----------



## Synergy (Mar 18, 2013)

Another question would be what one generally means by "income". Do you include capital gains, dividend income, interest from investments, rental properties, money sheltered in a corporation, etc? It gets a little more complicated when you consider self employed and corporate business owners into the mix.

I believe "pay yourself" simply means to put aside a set amount of money per month, year, etc. Not simply saving whatever is left over after your expenses. This works well for people that don't have good spending habits. You often hear the term "pay yourself first". I really have no idea what the WB means by 10%, I've never read his book.

Personally I'd be counting my RRSP savings into that percentage.


----------



## hystat (Jun 18, 2010)

counting pension, rrsp, spousal rrsp, tfsa... I'm probably saving around 50%, but I'm an old dude with mortgage paid off and I've never carried any other debt in my life. Just to demonstrate how silly a number like 10% or any other % is. 
The more you save, the sooner you can retire or live with less stress over finances later in life. 

The big things that will have a greater effect on your future financial status are things like divorce and disability. You can insure yourself against the latter. 

Not marrying an idiot is probably the best advice - not sure if the Wealthy Barber series discusses that - it probably does. As I recall the WB typically overstates expectations on investments, and it's American. 

Gail Vaz Oxlade's books or site may be a comparable starter point with a Canadian flavour.


----------



## Janus (Oct 23, 2013)

I'm saving about 60% right now - wish it was higher, but rent in Hong Kong doesn't permit that.


----------



## diharv (Apr 19, 2011)

The Wealthy Barber book and author are 100% Canadian.


----------



## Ag Driver (Dec 13, 2012)

I use the 10% rule. I have not read his book yet, but allow me to explain my version of the :10% rule". Here is my latest breakdown of accounts and their allocations. These have changed very little over the past few years I have been using this method and I love it. It is loosely based off of the "jar" method. These are all high interest savings accounts, and my pay cheques are all divvied up into various account immediately once deposited. 

Chequing - 25% (Water, Hydro, Food, Fuel, Gas, Entertainment, General Living Expenses, Household items. Everything NOT specifically allocated for)
Mortgage - 30% (Mortgage Payments)
Retirement Savings - 10% (Couch Potatoe, Stocks, GIC's all inside TFSA at this point in time)
Auto - 10% (Insurance, Funding New Vehicle, Major Repairs)
Travel - 5% (Vacation Fund)
Benefits - 5% (Dental, Gym)
Taxes/Insurance - 5% (Land taxes, Home insurance) 
House Improvements - 5% (Finish the basement, widen the driveway, various maintenance)
Professional Development - 5% (Licenses, Programs/Training)

I do not "budget" in the traditional sense. If I see that I have money in my chequing, then I know I have play money and I try to keep it around the $3-5k mark at all times. If I see it's a little low, I don't spend as recklessly the following month. To specifically talk about my 10% savings allocation -- all gains, dividends, interest, and any money that this money makes and grows will stay in the retirement fund. This money is NOT to be touched until retirement and is considered spent money (ie. Pay yourself first). Within the next few years, I would like to reassess my allocations and bump savings to 15%. 

All accounts are funded enough such that if I were unable to work, I would be able to support myself for about a year. That being said, I am in the process of re-establishing an proper emergency fund.


----------



## indexxx (Oct 31, 2011)

I save about 15% of my before-tax earnings. So if your salary is $50,000, that's $625 per month. RRSP and TFSA contributions are definitely counted- that's the point of saving, to invest it hopefully in a registered account. That seems like a lot, but if you start doing it for a year and see how fast it builds up, you'll keep yourself inspired. It's really not difficult- just cut back on things like expensive coffees, going to bars, etc.

The Wealthy Barber Returns is the newer version, so I hope that's the one you're reading. It's a great book for sure. Pay yourself first means exactly what it sounds like- always make sure that your lifestyle allows you to put away a percentage of your salary every month. Most people spend everything they have on luxuries and fun, and always say "I can't afford to invest anything!" 

What they should be doing is investing FIRST, and then enjoying themselves on what's left over.


----------



## My Own Advisor (Sep 24, 2012)

I actually wrote a post about this recently...
http://www.myownadvisor.ca/new-savings-rate-10-folks/

I think saving 10% is good, but I assume, at least for us in our house, this is _after-tax income._ Gross income is somewhat useless when it comes to the 10% savings rule.

Like indexxx, we are striving for more...

We need to save 20% or more of our after-tax income to meet our goals. This excludes our contributions to workplace plans as well. The 20%+ is a target but unfortunately we're just below that now.

RRSP and TFSA contributions are definitely counted for us as part of the 20% savings goal.


"What they should be doing is investing FIRST, and then enjoying themselves on what's left over." That's the premise of paying yourself first right there which I'm a big fan of. I'm not perfect at this and thus fall down once in a while but I'm getting better over time....


----------



## brad (May 22, 2009)

It's also worth looking at it the other way around: instead of setting a percentage goal, first figure out how much you need to spend each year in order to live comfortably, and then save everything over and above that amount. This helps you avoid lifestyle inflation as your income increases, and makes for a smoother landing at retirement because you don't have to scale back. You can adjust your living expenses for inflation or for new expenses (e.g., having kids). I find it works best to me to first figure out what I need to live on and then save/invest/donate the rest.


----------



## My Own Advisor (Sep 24, 2012)

Good point Brad. I guess I've done that indirectly. I've figured, roughly, what we need to save between now and our future selves to cover "X" expenses in the future.

For example, if our expenses go up, we have a few choices:
1. save more now and going-forward to cover those expenses, and/or
2. work longer.

If our expenses go down, we can:
1. save the same amount and/or
2. shorten our working window.

Definitely, having a clear understanding as Preet Banerjee says _where does all my money go_ is key.


----------



## Franky Jr (Oct 5, 2009)

^ yep. 

I find 10% doesn't really cut it unless you start fairly young and go till 65.


----------



## Jon_Snow (May 20, 2009)

I saved around 80% of my income for many years... that's precisely why I don't need employment income anymore. I just let the dividends roll in and enjoy life to its utmost.


----------



## My Own Advisor (Sep 24, 2012)

80%?????

Wow.


----------



## Canadian (Sep 19, 2013)

I'm currently saving ~40-50% of my gross salary (distributed among TFSA contributions, cash, and work RRSP). I'm early in my career and salary is low but expecting large increases over the next couple of years. I don't anticipate my expenses increasing much so I'm hoping to increase that saving % along with my raises.


----------



## 1980z28 (Mar 4, 2010)

I work part time 3 days a week

I place 3k into my investments per month so that would be 75% saved

So I guess with no debt ,that would be average


----------



## cainvest (May 1, 2013)

brad said:


> It's also worth looking at it the other way around: instead of setting a percentage goal, first figure out how much you need to spend each year in order to live comfortably, and then save everything over and above that amount. This helps you avoid lifestyle inflation as your income increases, and makes for a smoother landing at retirement because you don't have to scale back. You can adjust your living expenses for inflation or for new expenses (e.g., having kids). I find it works best to me to first figure out what I need to live on and then save/invest/donate the rest.


This is the best way to do it IMO, look at your currrent living expenses so you'll have a baseline amount for what you'll need in the future and adjust your savings/lifestyle/income accordingly. Working off someone elses fixed percentage isn't precise enough.


----------



## banjopete (Feb 4, 2014)

We've been lucky in our house, without working too hard at the frugality game I think as a house we've managed about a 35% after tax savings rate. With a baby on the way I anticipate that could fluctuate a bit this year as we figure out our new costs and suck up the lost wages from maternity leave then adjust to childcare costs (yikes!).


----------



## Ag Driver (Dec 13, 2012)

For those saving 50% or better, how are you doing so? I understand being a tightass you can achieve some pretty remarkable savings ... but that comes at it's own expense. What is the common theme here? Extreme end frugal? Retired? High income earners? Living with your parents? I think for those of us with a typical lifestyle, established careers and living on our own with an average or less income -- saving north of 50% would be very difficult to achieve. There still is a cost to living....


----------



## My Own Advisor (Sep 24, 2012)

I agree Ag Driver. I mean, >50% is crazy good. Kudos to folks that can pull it off.

I suspect everyone has a different take on what is savings though. For example, are lump sum mortgage payments really savings? Is paying off credit card debt savings? Those are questionable. 

Contributions to TFSA, RRSP, RESP, non-registered, HISA, emergency fund, that's savings. In these cases, you're not starting underwater.


----------



## brad (May 22, 2009)

That's the thing about percentages: they're meaningless unless you tie them to an income level. if you earn $20,000/year it can be really hard to save even 10% of your income. If you're earning $200,000/year you should easily be able to save 50% or more, unless you like to live large. There are other variables too: if you're a double-income family with no kids, you'll have a lot easier time saving big than if you're a single-income family with six kids. That's why I think percentages are silly -- they apply to "the average person" or the "average family," but I've never met anyone who was actually average. How many families do you know with two and a half kids? :stupid:

It seems there are four ways to achive a high stated savings rate: 1) earn a lot of money, 2) live very frugally, 3) expand your definition of "savings" or 4) some combination of the previous three.


----------



## gladaki (Feb 23, 2014)

50% :livid:...can be done only if ur single


----------



## brad (May 22, 2009)

gladaki said:


> 50% :livid:...can be done only if ur single


No, it's really easy for a couple to achieve it if they have a high income and aren't big spenders.


----------



## bflannel (Apr 21, 2013)

I save 1/3rd of every invoice rounded up to the nearest thousand but this needs to also pay my ltd. company tax, which is dramatically less than the savings. Annually I then pull out from my company accounts my max RRSP and TFSA contribution.

The rest I try to waste on toys, good eating, and the pursuit of happiness! It's not perfect but it gets a young man like me saving. I really do find that if I set a % goal I can keep to it so as my 'wage' increases over the next year I may push for 50% of every invoice automatically disappearing from my pesky eyes line of fire!

I think for younger folks any savings at all is actually incredible.


----------



## Canadian (Sep 19, 2013)

Ag Driver said:


> For those saving 50% or better, how are you doing so?


I travel a fair bit for work. The per diems cover meal / coffee expenses and a bit more, so a good portion of my salary is able to remain untouched. If I were to work in the local office all the time I would probably be saving ~25-30% of my salary. That's not the only reason, though - I set an aggressive milestone I hope to achieve in about 4 years and worked out how much I need to save with each paycheck. This required a bit of frugality (changed phone carriers and reduced my bill, etc.) but I don't force myself to go without a social life, going out with friends, etc.



gladaki said:


> 50% ...can be done only if ur single


Actually I think quite the opposite. My partner and I share a lot of expenses that I would have to pay otherwise, such as rent, utilities, cable, etc. I also believe my grocery bill would not be cut in half if I were single.


----------



## Synergy (Mar 18, 2013)

gladaki said:


> 50% :livid:...can be done only if ur single


That seems a little backwards to me. Single individuals are responsible for 100% of the bills, plus they tend to go out more, buy more clothing, get less gov rebates, etc. Couples without children would appear to be able to save the most - ask our friendly CMF member Jon_Snow, happily retired at a young age!


----------



## el oro (Jun 16, 2009)

Agree with everything brad said. Jon Snow level savings rate is quite easy with sufficient income and/or adequate willpower, even in your 20s.

I think the single / couple savings rate dynamic is based on relative frugality. ie. I'll be moving in with future DW in 2015. Outside of vacations, my spending will likely increase but her spending decrease


----------



## newfoundlander61 (Feb 6, 2011)

Currently saving 50% of my income, having no debt makes this possible.


----------



## NotJustDreaming (Oct 20, 2013)

gladaki said:


> How much percentage of income you guys generally save ? ..
> Wealthy barber say save 10%, what it really means ? Also what exactly pay yourself means ?


As I recall from the book, the Wealthy Barber said to max your RRSP and RESP (surely the same for TFSA if it had been around at the time) and on top of that you should save 10% of your income so you can buy whatever you want at some point in the future. 

The Wealthy Barber was the first personal finance book I read. After reading it, in my PF spreadsheet I added the line item "10% Fund". It morphed into the title 'boat fund' but then at some point I came to my senses.


----------



## nathan79 (Feb 21, 2011)

For the last 11 months it would have been about 41%, had I not purchased a car. My actual savings rate is 17%. I probably won't buy another car next year so it should be back to 40%.

How do you factor large, infrequent purchases into a savings rate?


----------



## Ag Driver (Dec 13, 2012)

nathan79 said:


> For the last 11 months it would have been about 41%, had I not purchased a car. My actual savings rate is 17%. I probably won't buy another car next year so it should be back to 40%.
> 
> How do you factor large, infrequent purchases into a savings rate?


I don't. Savings = money for retirement, not money spent on appreciating and depreciating assets. I do not even consider my mortgage as savings. That is all spent money, up until I decide to convert it back to cash to be spent on the cost of living in retirement. Saving and spending on a vehicle should never be considered retirement savings. 

If that were the case, I save 75% or better. I know saying that is an outright lie...because down the road, the cost of food/shelter/transportation/personal care will all spend this saved money in the near future. Money that you DO NOT TOUCH is considered savings.


----------



## brad (May 22, 2009)

Ag Driver said:


> IMoney that you DO NOT TOUCH is considered savings.


Isn't all money going to be spent at some point in the future, either by you or your heirs? This seems an unnecessarily limited definition of "savings." In my view, savings is money that you set aside for some future use, whether it's to buy a car, a house, a vacation, or your retirement. It's all going to be spent; the only difference is the time horizon. You could split it up into short-term savings versus long-term savings, I suppose, but everything you earn will be spent eventually. Even if you leave it to your heirs, they will spend it at some point.


----------



## My Own Advisor (Sep 24, 2012)

I hear what you are saying brad, but I'm more aligned with Ag Driver.

Savings = money for retirement. 

"According to Keynesian economics, the amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time."

So, my expenditures are my home, my food, my car, my insurance, etc. This is not savings, including the home, it is an expense and therefore I don't see mortgage payments as savings. I have to live somewhere. In this home or somewhere else, that home will cost me money, it will always be some form of expenditure.

To me savings are implied I can turn those assets into increased income through investing. So, I hope my "savings rate" can be close to 20% this year. 

When I read about folks who save (for investment purposes) 40%, 50%, or 80% by Jon Snow I'm blown away and kudos to them.


----------



## gardner (Feb 13, 2014)

I was thinking about the original question, and I'm embarrassed to say that I just don't know how much I spend or save. Thanks to the income tax system I take reasonable care to work out how much I earn. But I really don't know too well how much I spend. I know I save a lot, so there's no worry, but exactly how much I don't know. Strange. I should do a budget, I guess.

I believe people generally includes savings for planned expenses as "savings" -- saving up for a home or a car. Your emergency fund is savings. Maybe this should not be considered savings, I don't know. If I spend 4 years saving $40G for a car, is that any different than buying the car on credit and spending 4 years paying for it? I might look at the first case as savings and the second as not, but maybe neither are. In that case only money put aside as capital for investment is "savings".

By any definition, I personally feel like I'm going to manage.


----------



## brad (May 22, 2009)

My Own Advisor said:


> I hear what you are saying brad, but I'm more aligned with Ag Driver.
> 
> "According to Keynesian economics, the amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time."


So it sounds like you are defining "a given period of time" as "your working career."

Most people calculate their savings rate annually, so that means you subtract this year's expenditures from this year's income, and anything left over is savings. That would include savings for lots of things that might take more than a year to save up for, like the downpayment on a home, a car purchase, expensive gadgets, etc., not just retirement.

You could categorize savings in a number of ways, but I don't generally think of savings as for retirement exclusively; in fact I separate savings from investing. My investment portfolio for retirement is mostly ETFs, and I consider those investments. I also have some GICs for retirement, which I consider savings, since they won't likely grow faster than inflation and their value will decline over time.

All of this highlights the fact that there's no universal definition of "savings," and thus it's very hard to compare people's savings rates because each person tends to define it somewhat differently.


----------



## Davis (Nov 11, 2014)

So instead of speculating or going from memory about what David Chilton said, I looked it up. On Google. Here is how he described "pay yourself first" in 2012 when he released the updated "Wealthy Barber" bookhttp://business.financialpost.com/2012/01/16/pay-yourself-first-and-keep-it-simple-is-still-good-advice/: "Chilton advocates that people save 10 to 12 per cent of their gross income for retirement — if they start young. If they start later, or live in a time with lousy returns (like right now), they need to save even more." 

Gross income means your income _before tax_.The 10 per cent figure is not any magic number -- he was just suggesting 10 per cent because most people wohn't notice that small an amount being taken out of their pay, and over a long period of time, it will accumulate to a lot of money. If you want to quit work earlier, save more than 10 per cent. You can see from the discussion above that a lot of poeple here save more than 10 per cent. These people are nto typical -- they are here because they are very interested in saving and investing, so you would expect that to be more aggressive savers. I am probably saving about 40 per cent of my gross income, but I am planning to retire 18 months from now at the age of 50.


----------



## My Own Advisor (Sep 24, 2012)

Thanks Davis and Brad, always great to read others' perspectives. I guess the only quibble I have with Chilton, although who am I to argue with him really, is the gross income part.

I get my paycheck after taxes. My savings goal(s) are with after-tax money.


----------



## cainvest (May 1, 2013)

nathan79 said:


> How do you factor large, infrequent purchases into a savings rate?


Best to look at it from an expenses perspective. For a simple approximation for buying a new/used car, take the cost of the car and divide by the number of years before expected replacement and add that to your yearly expenses. So for a simple example, if you buy a new car every 6 years for $30,000, add $5000 to your yearly expenses.


----------



## Canadian (Sep 19, 2013)

@MOA I agree that it's more practical to base budgets and goals off after-tax income but looking at it from a pre-tax perspective creates more incentive to develop tax planning strategies.


----------



## steve41 (Apr 18, 2009)

I look at the problem as a lifetime cash flow calculation and pre-retirement/post-retirement don't factor into the program. There are times when you have extra money coming in (salary or a windfall say) and periods when you don't ( a sabbatical, full or partial retirement. In the first case you save and in the second case you withdraw..... but there is no 'now I am working, now I am retired' paradigm. It is the determination of 'how much' and 'when' to save/withdraw that is the tricky part.


----------



## bflannel (Apr 21, 2013)

It is impossible to say if martial status makes someones life easier or more difficult to save because it is more the lifestyle associated with each person (variable). For example, I'm single; I work in camp setting for 3-5 week periods with usually only 1 week off, my rent is $350+utilities. I'm fortunate to be in the situation I am but I've also given up more than most people are willing. I think a frugal common law partnership could be better off in both lifestyle and savings however.

A peer of mine just financed a 60k vehicle at 7%/4years. After exhausting myself explaining the total costs involved, the unnecessary purchase, the yada yada yada. I showed him a craigslist add for an old but well maintained pickup truck with an asking price of $1200. You can lead a horse to water but you can't make him swim right :hopelessness: It would not matter if said peer was married or not... He is not a saver and it's a shame because he'll be working past my retirement for as long as I've currently been ALIVE!

Kudos to anyone that saves a dollar because I know most people I've come across don't have the slightest bit of a plan in place.


----------



## Jorob199r (Sep 4, 2014)

I save about 80% of my net income


----------



## steve41 (Apr 18, 2009)

Jorob199r said:


> I save about 80% of my net income


Did you ever consider adopting? I am up for grabs.


----------



## NorthKC (Apr 1, 2013)

I've saved 20% this year. Starting in July, it will be 40% after the last debt is paid.


----------



## Jorob199r (Sep 4, 2014)

steve41 said:


> Did you ever consider adopting? I am up for grabs.


I don't drink, don't smoke, no expensive cable packages, one old paid for car for me and my spouse, don't care about shopping, bring my lunch to work, walk to work, don't golf...etc

It hurts my head when I hear my co-workers say they are broke as they drive their nice new car, have big expensive houses a long commute away, go out to eat for lunch most days and head out to the golf course where they will inevitably have some drinks during and after their round, or see them (mostly female ones) coming back from the mall all the time with more clothes and stuff they don't need.

None of that appeals to me.


----------



## scorpion_ca (Nov 3, 2014)

^ agreed......

I have saved around 73% of my net but 80% of my gross income excluding investment income.


----------



## banjopete (Feb 4, 2014)

It's very true that there are many variables that play into the amount saved that will differ highly from one house to the next and if you consider what basic food and shelter requirements are if you're not making much income it is hard to save anything. As Jorob199r mentioned many people just plain don't think about saving like most people in CMF do. I find it quite amusing really; a debt riddled cubicle neighbour of mine at work just got her 21yr old daughter a job at our company, somehow she also managed to get her locked into a brand new car loan most likely before she received her first paycheque... some people just don't learn and that worries me as a young tax payer as we go forward.


----------



## cainvest (May 1, 2013)

Jorob199r said:


> I don't drink, don't smoke, no expensive cable packages, one old paid for car for me and my spouse, don't care about shopping, bring my lunch to work, walk to work, don't golf...etc
> 
> It hurts my head when I hear my co-workers say they are broke as they drive their nice new car, have big expensive houses a long commute away, go out to eat for lunch most days and head out to the golf course where they will inevitably have some drinks during and after their round, or see them (mostly female ones) coming back from the mall all the time with more clothes and stuff they don't need.
> 
> None of that appeals to me.


You'll see both sides of the bell curve, some only live for the day with no regard for their future needs while others are content to just exist with the lowest costs possible. The key is finding a balance point that makes you happy and sees to your future retirement needs.


----------



## indexxx (Oct 31, 2011)

I also live almost as low-cost as possible, Ii feel my day-to-day living does not need frivolous things. I do spend well on cameras, guitar equipment, and travel though- these things add a lot of meaning to my life. So I spend as little as possible most of the time in order to justify a couple of larger outlays once in a while on top of my investing.


----------



## Jorob199r (Sep 4, 2014)

Saving money doesn't necessity correspond with sacrificing. I love to mountain bike, hike and camp in the rockies. Tent camping is cheap but I also enjoy it. There's my summer fun. I hate golf, it's not fun to me, and additionally it happens to be expensive.

I wouldn't put a kid in hockey because I hate it, but it just also happens to be a really expensive sport. I get no joy from sitting in a bar and drinking. I don't like the taste of alcohol, nor do I like sitting around like that. That also happens to cost quite a bit of money.

I don't care about a 2000sq house. I don't need the space. It won't make me happy. Big houses also happen to be expensive.

I have a colleague who has 100k in student loans, with a young child, a house and and two dogs. Never mind her big mortgage debt on top of that. They are in the Caribbean for the entire month of December on vacation. She said it costs over $1,000 just to put her dogs in the kennel for the month. I tried to give her Gail Oxlade's book on curbing debt, but she refuses.


----------



## john macintosh (Jan 2, 2015)

In 2014 my spouse and I earned 132500 (gross). We spent a lavish 27200 in 2014. So we have an 80% savings rate on gross income. We'll pay about $25,000 in income tax, so savings rate on net income will be closer to 60% (but it's not that time of year yet to know what the tax bill will be).

We live very happily a middle-class lifestyle in a modest house close to work, which has always let at least one of us bike rather than drive. That means that, by only ever owning one inexpensive car and using it sparingly, we were able to throw a lot of money at the mortgage, and were mortgage-free in seven years at age 35 (on combined gross annual earnings of about $50K to $80 during those years). We find other small efficiencies where we can, too, like doing lots of DIY, using the library, choosing inexpensive or free entertainment (hiking, board games, etc.), not being over-insured, brewing our own alcohol, and giving very little money to Rogers or Bell (no cable, no landline, but internet and one basic cell phone). We're hoping to be in a position to retire around age 45. I can't recommend enough the savings you'll find if even one spouse can live close enough to work to walk or bike... it's like free money and time with an added bonus of improved health! Seriously worth considering a move for that reason alone, but definitely the way to go the next time you move.


----------



## the_apprentice (Jan 31, 2013)

I save approximately 50% of my net income. The 50% I save then goes into my investments (TFSA, RRSP's, Real Estate).


----------



## amitdi (May 31, 2012)

gladaki said:


> Also what exactly pay yourself means ?


The electronic age makes this concept difficult to understand. Paying yourself means investing towards your future first. The opposite of this is paying your bills i.e paying someone else first which people normally do. Practically, it means you need to auto-debit 10% of your salary to your retirement investment account. Author argues that paying yourself first does not make a difference at the end as you tend to adjust yourself.

Personally, I believe this concept is not so much relevant to CMFers. "Pay yourself first" will most help those who are impulse buyers and have an issue with disciplined saving.


----------



## hboy43 (May 10, 2009)

Hi:

When I was young and single it was 40 or 50% for years - I owned and did nothing for a very long time. Frankly in hindsight, I don't recommend it. Now that was 40 or 50% of a small earnings. My highest earning (from employment) year was $70K with 2 others above $50K. 40 or 50% of some of the incomes here, I would have lived like a king, and retired younger than 39.

Currently in an average year, our savings (after tax figures) based on the one salary is about 15 or 20%. Based upon all realized income would be 50%, and higher if one throws in capital gains that are sitting there, but not realized.

I have been blessed to not have the need of my own vehicle and don't have any desire to pay someone $100/day to walk around a field chasing a white ball, aka golf. 

My vice is of course sailing and here one can spend a stunning amount of money year in and year out. Still the day late last summer out on the Bay of Quinte in my 19 footer when I did 30 NM on a vector basis or 40 NM on a scalar basis is about the closest thing to peace I find in this life, and at a seasonal cost that is still under what floating a second family vehicle would cost us. To quote Mastercard "priceless".

My advice is not to specify a number so much as to take to heart the philosophy in "Your money or your life", that is if it is something that truly gives pleasure (even golf!), you should do it/buy it, then deep six the rest. Even I have wasted a stunning amount of money on things that in hindsight really added no long term joy to my existence. I have also made the opposite error, in that I missed a quarter century of sailing joy because I was such a tight fisted frugal SOB it never entered my mind that maybe I ought to upgrade from my Laser I. If one can honestly do this, then I think for most a happy side effect will be a savings rate of 20 or 50% that just shows up automatically.

hboy43


----------



## Jon_Snow (May 20, 2009)

My Own Advisor said:


> 80%?????
> 
> Wow.


Okay, full disclosure here. 80% savings rate included wife's income as well - let's call it FAMILY income. But, to us, what's hers is mine, and vice versa. This wouldn't have been possible without two good incomes - and living in Vancouver no less - not cheap.


----------



## JordoR (Aug 20, 2013)

Jon_Snow said:


> Okay, full disclosure here. 80% savings rate included wife's income as well - let's call it FAMILY income. But, to us, what's hers is mine, and vice versa. This wouldn't have been possible without two good incomes - and living in Vancouver no less - not cheap.


Impressive! Living in Van, on a single income in a high rent area I'm saving 25% of my income.


----------



## Barwelle (Feb 23, 2011)

Of my gross income in 2014... some rough guessing here...

28% +/- off the top for taxes and deductions

10% goes straight into retirement fund
30% +/- was put away for the farm - I think that counts as long term savings, it should hopefully maybe possibly pay back...

I have other savings but won't count it since it's for things like travel and future car expenses.

I thought I was doing good but I'm only at 40% of gross or 55% of net, while I still live with my parents for really cheap... hmm. Gonna have to look at where my money went. One thing for sure, getting into motorbiking cheaply didn't work out to be so cheap. And, conversely to what others have said upthread, I find that not being single means I spend more. Otherwise I wouldn't go out for dinner, go swing dancing, etc, even just driving to her place costs.


----------



## My Own Advisor (Sep 24, 2012)

Jon_Snow said:


> Okay, full disclosure here. 80% savings rate included wife's income as well - let's call it FAMILY income. But, to us, what's hers is mine, and vice versa. This wouldn't have been possible without two good incomes - and living in Vancouver no less - not cheap.


80% is still crazy good family income saving Jon!

No wonder you are retired


----------



## Jon_Snow (May 20, 2009)

It's been wonderful so far, all 4 months of it. Based on your posts here and on your blog, you will get there younger than most!


----------



## My Own Advisor (Sep 24, 2012)

Uh, not at 41 or 42 like you Jon!!

You are a very rare breed.

Maybe 50-ish if we keep our jobs, keep up the plan. Lots of things need to fall into place!


----------



## peterk (May 16, 2010)

Managed around 62% savings rate for 2014. A distinct drop from 72% in 2013. *grumble*

You down south for the winter Jon_Snow?


----------



## Jon_Snow (May 20, 2009)

Back in Raincouver for now. Might head back down once I've finally had enough of our "liquid sunshine" and am in need of the real thing. :biggrin:


----------



## Westerncanada (Nov 11, 2013)

Jon_Snow said:


> Back in Raincouver for now. Might head back down once I've finally had enough of our "liquid sunshine" and am in need of the real thing. :biggrin:


Pretty Fantastic results on this thread.. I am going to _stretch _myself this year to hit 50% of my after tax income and I thought that was doing well... lol.. I guess in hindsight if it were not for children I would be able to significantly increase this amount rather immediately.


----------



## gladaki (Feb 23, 2014)

This is a inspiring thread .


----------



## mcoursd2006 (May 22, 2012)

Once paid off our mortgage about seven years ago we were able to save about 35-40% of our family income. 

We are a single-income family, and no, my salary is not six figures. My wife stays at home to care for our three young children. 

The biggest expense we have is food. No, we don't eat out much. Our oldest son is entering into his pre-teen years, so that grocery bill is just going to get bigger and bigger.

We do have two cars. Right now there's no way to get around that. I have to drive to work. I have tried riding my bike to work, but I can't do it every day, so there's still a need for a second car. I think if you can eliminate one or both cars, your saving rate can go up quite significantly (insurance, maintenance, payments, fuel, registration, etc.).


----------



## axelis (Jan 13, 2015)

In 2013 our income was spent:

- income taxes 27%
- cash and credit cards (all expenses for food, travel, entertainment...) 20%
- home (including mortgage, property taxes, heating...) 12%
- registered savings (RSP / TFSA) 12%
- mortgage extra payment (not sure if these would be considered savings for some, but it could have been used to save/invest) 11%
- home reno 9%
- car 4%
- non registered investment (stocks from work) 4%

Note: all rounded, so may not reach 100%

So somewhere between 16% to 27%...


----------



## randomthoughts (May 23, 2010)

Silly of me, but I love doing yearly stats to 'close off the year'.

As a percentage of net income:
Insurance 3%
Property Tax 6%
Parents 1%
Datacom 3%
Utilities 4%
Car 3%
Food 5%
Fun 12%
Big Ticket 7%

Leftover: 56% (saved)

My goal is to spend less on Fun (everyday spending that isn't in the other categories) and more on Big Ticket (things that are supposed to improve my life in an ongoing way).


----------

