- May 17, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Analyzing Household Income and Expenses
Hi y’all,
My fiancé and I both work in entry-level positions, with him earning $16.50/hr and myself making $21/hr, on top of receiving quarterly bonuses.
After creating a detailed spreadsheet of our monthly expenses, including fuel costs based on conservative estimates and high gas prices, we discovered that we could potentially save between $800 to $1000 per month. This savings could be used for unexpected expenses such as health issues or car repairs, allowing us financial security.
Furthermore, after accounting for essential expenses, we estimate having anywhere from $465 to $525 per person for discretionary spending on items like clothing, entertainment, and non-essential food each month.
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Edit: In light of the feedback, I will increase my 401k contributions to secure our financial future.
Edit 2: Thank you for the advice! I will implement changes immediately, starting with adjusting my 401k contributions.
Despite some opinions on our financial standing, it’s worth noting that I am only 21 years old and reside in a high-cost-of-living area, where rent alone consumes a significant portion of our income.
I will also explore the option of opening a high-yield savings account, as suggested by some members.
Edit 3: Please refrain from suggesting that we part with our beloved cats. They are an important part of our family, having been rescued and providing emotional support throughout the years. Their expenses are manageable, with monthly costs totaling around $100 and annual shots totaling $400 for both.
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A thousand/month would be just over 15%, which is a baseline recommendation for retirement savings.
Saving 1000 a month is good
Saving more is better
Saving what you can, no matter how small, is always better than not saving at all.
Congratulations on taking more action by determining your cash flow and setting up a budget, then most people.
What we need to know to answer your question is monthly income. However, even without that information, I suspect saving $900/mo is great.
Personally, I think people are going overboard with recommendations. You’re 21. $800-1000 a month is amazing! You’ll set yourself up just fine. Your income is most likely going to grow as you age and the amount you contribute can grow with it. I didn’t start saving for retirement until late 30s. I am going to be able to retire comfortably in my mid 50s. But I save about $8k a month to make it possible. If I had started the way you are, at your age, I would not have to save much now and could probably retire even sooner. You’re doing great!
This question is completely subjective. You’re going to find other people on here at your age already saving $300k while others are just starting to save. So the general piece of advice is the amount you save, relative to your income, should be around the 20% mark. If you have more left over, then capitalize on more savings or treat yourself.
Only advice is to make sure that savings is going to growth for your potential future and not in a .05% savings account. And to make sure you’re putting any extra funds towards debt, if any, as that’s going to eat away your income in the future.
Good job having a plan and working it, though!
It’s a good saving % based on the salary you guys are earning. IMO (very frugal), I would allocate a lesser % to free spending and more into saving.
15% is good especially when working at entry level jobs and pay. If you are also putting into your 401k – at least enough to get the full match – then you are doing well. Getting started in saving is the hardest part, so having some money going into retirement and also saving up some cash for a emergency fund / car needs / future house down-payment is the way to go. Keep at it! As you keep moving forward in your field, and your pay goes up it will get easier. Also make sure you are not offsetting those savings by incurring debt. If you have debt and are paying interest, bite the bullet and pay it down or find a good balance between saving and paying it down. Good luck – keep your head down and keep ‘paying yourself first.’ Once you have a decent nest egg, that money will give you the best thing money can provide – options!
Glad to hear you are upping your 401k match. $800 a month is great! Please make sure you are both putting that savings in a high yeild savings account. Use something like weathfront (that’s what I use and currently getting 5.5% interest). After you get your emergency fund filled up start a separate savings fund for future big purchases.
You are doing well. You are calculating, putting stuff in spreadsheet, tracking stuff month on month, know your general outlay, know how much you are saving – you are doing well.
Keep up the good work. Put the money you save in good, sensible investment vehicles proportionate with your risk appetite. Soon, you’ll have a nice pot there.
A drop at a time makes an ocean – Hindi proverb.
Everything you save is good but you can always do better
I mean no, but you are making near min wage in cali. So I’d say that’s alotta saving
Personally with a gross income of about 78k (without bonus)… I think that’s pretty solid.
That’s a crazy amount compared to what my partner and I can scrape up so sounds good to me.
Anything over $0 is better than most people in the US. You’re doing great!
There is no normal as we all have different levels.
I will use $800 even though you said maybe $1000.
If I could save $800 extra per month, I would up my 401k contribution $100 for each of you. Once that money is in the 401k you do not touch it until age 62 or age 65 should be the goal. Put it away and forget about it. yes, life might throw you a curve ball, put that as a goal. It is not written in permanent ink.
We were lucky, my spouse and I NEVER had to touch our 401ks. We just watched them build up over the last 38 years.
Any money in the 401k now, is better than nothing.
800 – 200 = $600
$600 into the emergency fund.
After one year of doing this, see if you want to change your contributions to your 401k.
Yes, and more is better. Also, be sure you’re saving it in an account that earns more than 4% interest. Earn money on your savings.
Just remember the rule of 72. Whatever the growth rate of your money is, divide 72 by that number and your money will have doubled. So at 7.2%, your money in that account doubles every year. You’ll get a lot more out of this in your age if you heavily invest in your 401k. If you could manage to get 100k in an account at 10%, depending on your age, you’ll be set for retirement and not even need to contribute much more.
Let’s say you had 100k in investment of S&P 500 at 25. You’d have like 2 million by the time you’re 55. Obviously inflation will eat into the actual value of this and all of that, but it’s still a good amount. That 2 million would also continue to grow as you don’t spend or pull out of it.
“good” depends on your goals.
I would not be happy saving only 1k a month, but most people balk at how much of my income I put into retirement accounts.
no but we all start somewhere. based on your post 800-1000 dollars a month looks like its about 15% of your income so it is good relative to your position.
comparison is the thief of joy so just be proud of what you are able to do and strive to do better. raises will come, new jobs will and opportunities will come. the fact that you are asking this question shows that you are on the right track.
As opposed to …how much instead?
r/MrMoneyMustache has a savings rate chart and other good information motivating
There’s a how-to when-to wiki at r/PersonalFinance and it’s helpful reading.
r/TheMoneyGuy has a financial order of operations
r/DaveRamsey has a plan
r/Ynab has a free trial over a month and lots of free videos online with helpful hits. Very useful even if you never pay for the YNAB subscription
r/Bogleheads
progression of r/CoastFiRe r/LeanFiRe r/FiRe
Lots to read but it helps ….some is the same, some is similar. It’s good you’re thinking about this.
Yes. It’s very reasonable. Are you talking about investment savings such as 401K, mutual funds or just personal savings? Either way, saving anything is the best medicine. That’s a good amount to save.
I don’t know how it could be good in USA if it is really not good even in poor Ukraine which is in war.
Hey girl, congratulations on taking action on your financial future!!!! Now implementing is important!!
Open an account at Fidelity or Schwab—-brokerage. Savings. Checking. Billpay. Venmo—- out all your income in to checking and then you can move it to other accounts from there. As a cash alternative you can but SGOV. IT PAYS 5.13 now and no time constraints and no state tax on earnings.
In brokerage you can open a Roth or Ira.
Yes you both should fully fund your 401k employer match accounts —- free money — should be a no brainer!
Good luck to you both.
Yes that’s great, but don’t over-save. Money just sitting in savings is good for emergencies but it losses value over time because of inflation. So once you have “enough” in savings, start over-loading your 401k or make other outside investments.
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Sounds pretty decent for your income level
We are self employed family so we save $16,000 for that, max amount for tax reasons
And another $1000 a month for emergency and catch up
We don’t go out to eat, if that helps
It is a good amount but I will also say u til you are actually married, you should not be combining money.
you’re saving and that’s most than a lot of people are doing. Good job!
$900 is a great place to start. Once you have that car paid off make sure to dump serious cash into retirement accounts. I paid my car off early and I had a 4.5% interest rate. Of course I would have way more money if I chose to invest instead of paying off early but I have enough to handle most emergencies and the peace of mind not having a car payment is legendary. I hate cars.
It’s really really good if you’re under in your 20s or younger.
It’s ok if you’re in your 30s..
It’s better than nothing in your 40s..
If you’re in your 50s you probably need to do this because shit can get bad quick if you experience a layoff or sickness or just age yourself out of working.
If you’re in your 60s+, what’s the point.
It’s good for any age…my son in law is a financial planner and he told me a few weeks ago that 74% of Americans have less that 3 months of income saved. No retirement funds…they’re banking on social security to live off of. Pretty scary if that’s true.
the fact that you are 21 and even THINKING of saving instead of spending it. is HUGE. you are doing great and you will thank yourself later!
$1 to $8 is a good amount to save. Any amount is a good amount to save
That’s great for your wages. Keep it up.
save is a save, as long as you can and do it more.
Not good but it’s better than nothing.
Anything is better than nothing lol.
5% of gross income is minimum.
10% of gross income is good.
20% of gross income is great.
30% of gross income is amazing.
40% of gross income is phenomenal.
50% of gross income is ridiculous!
60% of gross income is better than all of the above.
Looks like you’re using 401k going forward. This is good.
Another thing to think about is you and your fiancé’s salary, all in, isn’t that high right now.
Depending on each of your tax brackets now, and when married, it may be better to priority Roth contributions over 401k. That is to say, if your company offers a match, take it. But beyond that, excess should go into a Roth IRA – M1 is a great resource here, as that’s what my wife and I’s Roth are held in.
Based on your income you guys are doing great.
$1.2-1.3k for a 1B/1BR is not high cost of living anymore, anywhere. I’d kill for that rent lol.
I wish I lived in a area where rent was 1.2k a month
It’s all about discipline. Pick a number that is comfortable now. Stick with it and try to never waiver unless it’s a real emergency. As your salaries rise over time, don’t let lifestyle creep happen. Up your savings but let the rest of the budget remain the same. Eventually you will be in a very good spot financially and you will learn to live on less.
If you’re managing to save that much with such a low income you’re doing great.
Want to save more money get rid of the cat!
Saving 20% of your income is pretty good.
I see you are 21, and most people your age don’t save anything. So that’s good.
That said, you can do better; much better than $21/hour. I see you attempted college but didn’t finish; I assume you planned on taking classes and working at the same time to avoid taking on debt.
I understand that the prospect of taking tens of thousands of dollars in loan debt is daunting. And I know that not all degrees are as good as engineering. But think of this:
– Entry level engineers can expect at least $70k/year in base pay and probably $90k or so in benefits. In expensive areas they make more. I know ChemEs who make 6-figures at 22-years old.
– Engineering internships are basically required to get a decent job out of school. Fortunately, they pay quite generously. $20/hour is a baseline. In San Diego, I made $26/hr as a rising senior for Novartis, and I worked for SoCalGas as an intern for $28/hr while taking classes as a senior.
Thinking about tuition and board is good. Don’t forget to think about the money you could be making with a degree.
IMO no it’s not and it’s also not enough to retire. You should take this money and use it to go back to school (both of you 1 at a time) to make 100k+ each.