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How much should you be saving after all expenses, max retirement savings, etc. each year? What percentage of your net income would it be?
EDIT: I've read personal/discretionary savings should be 5-10%. The problem is if you don't have a goal, your savings account for emergencies/discretionary won't go up. If one could budget this amount depending on their goal, you could figure out how much you can really afford on a house and not that generic 36% figure for debt to income ratio for what one "could" afford for a house.
I think this is why people get into trouble with too much debt or living paycheck to paycheck. One should work backwards to figure out what they can really afford with proper savings in place, expenses, and retirement.
True I guess it would depend on ones goals. I've read personal/discretionary savings should be 5-10%. The problem is if you don't have a goal, you savings account for emergencies/discretionary won't go up. If one could budget this amount depending on their goal, you could figure out how much you can really afford on a house and not that generic 36% figure for debt to income ratio for a max house purchase.
I think this is why people get into trouble with too much debt or living paycheck to paycheck. One should work backwards to figure out what they can really afford with proper savings in place, expenses, and retirement.
As you can see, there are many different ways of looking at it, but I think they boil down to a specific order: Paying for the basic essentials of life is presumed. That's clearly the first thing you spend income on when you have income, followed shortly by those things (especially debts) that you'd otherwise be forced to pay or in some other way would affect your ability to live your life if you were sanctioned for not paying. Then you work your way up from there, in priority order, through those debts for which if you don't pay them will have the greatest negative impact on future resource (i.e., highest interest rates), weaving in at this point those expenses that provide for greater efficiency and greater profit in your life (i.e., education typically falls into this category, to a certain level).
I suspect, though, that you may be asking the question about how much of how much you could save should you save, in some way as a matter of rationalizing the decision to spend money in a discretionary manner. It's the whole "ya gotta live!" argument. And there is merit in it. However, it really comes down to how much you're willing to set aside your reasonable and responsible concern about your future. I say that because some indications are that the future is going to be a lot tougher than the past has been - that the time our society has had (to exploit the resources of other nations and to borrow from the future, instead of paying the bills we incur in the time we incur them) is over. Even today, still riding a bit of the wave of exploitation and borrowing from the future, there are folks who have been saving 10%-15% a year for their entire careers who are encountering the fact that they simply don't have enough to retire.
I don't mean to scare you, but I'm scared by the answer to your question, and so there's really no way to answer your question without being scary.
there are folks who have been saving 10%-15% a year for their entire careers who are encountering the fact that they simply don't have enough to retire.
I find that hard to believe...
can you cite a credible source?
Consistently saving 10-15% for 35-50 years HAS to put one is a good position, I would think!
I find that hard to believe... can you cite a credible source? Consistently saving 10-15% for 35... years HAS to put one is a good position, I would think!
You mean "hope". The issue is generally a matter of investing those savings too conservatively or too aggressively. I'll keep my eye open for the examples I'm alluding to and post links here when I encounter such articles again.
I find that hard to believe...
can you cite a credible source?
Consistently saving 10-15% for 35-50 years HAS to put one is a good position, I would think!
i'm with you. unless someone made mistakes with those savings, 10-15% in savings per year for 30+ years sets you up fairly well. run the numbers, you'd really have to squander it to hurt yourself.
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