2014 Savings Rate Goals

[JuSp02]

My goal is to hit 75-80% savings this year, with almost all of it going towards student debt and maxing out retirement funds.

[Ozstache]

33% of net income for me in my first year of ER. While on the surface that savings rate suggests I should perhaps have ERed earlier, it's primarily because my wife refuses to give up her casual job because she actually loves it (aged care).

[oldtoyota]

I was about to respond and say you people are all freaking crazy to save that much but then did the calculations and I saved 55% of net last year. part of that is because I got 35% of my pay in one bonus check on December 31st, so not really giving me much time to spend it. That said, if I stay at this job, I don't see why I couldn't also save about 55% net this year.

You are now a "crazy" too. Welcome!

59% here. =-)

[ender]

47% pretax salary.

Though this doesn't include any car replacement savings as that is budgeted as an "expense."

[JPinDC]

Last year was 33%. Aiming for 40% this year, but I know I could get it higher if I moved back in with roommates. So torn!

[Jon_Snow]

I am in the home stretch towards ER... 2014, my final year of employment, should see us hitting about a 85% savings rate. Things are really starting to snowball financially in a good way... excess of $3000 monthly from dividends now. 

This is really going to happen.

[FIreDrill]

Hey everyone!

Update for the month of February.


Month              Savings            Income            Savings Rate

January            2,988.21          7,048.30          42.4%             
February          2,880.62          5,939.84          47.4%


~YTD               5,868.83          12,988.14         45.2%




This month we did pretty decent and most of our budget was really tight except for one part.  We bought x-country skis for the wife since it is our new Mustacian hobby.  Ended up getting what I feel was a great deal at an end of season sale but it still added about 500 to our spending which took us from 50+% to 45%.  I am expecting us to have a very nice savings rate for the month of March since we will be getting a 3,500 tax refund. 


Bring on March!
SS

[Ian]

Looks like 85% for me. I'm hoping to get higher for March, since normal expenses should decrease.

[dabears847]

January % was 82. Happy enough with that, though I did overspend generally.

We are at 80% roughly and I thought we overspent as well. I guess some slack should be given to the wife.  I worry too much about this... However, this is based on Net Pay with add backs for 401k. Did I calculate this incorrectly?

[Ian]

We are at 80% roughly and I thought we overspent as well. I guess some slack should be given to the wife.  I worry too much about this... However, this is based on Net Pay with add backs for 401k. Did I calculate this incorrectly?

It's not a competition, so however you calculate things is fine provided you're consistent with yourself. I think most people here use net and probably most correct for money invested. I use raw net because I don't know how much of my paycheck deduction goes to pension vs taxes and health care.

[Sebastian]

Apologies if this was already asked.. But if I'm taking 30% of my paycheck to put into 401K how do I calculate my savings rate as that is taken out pre tax :/

[FIreDrill]

Apologies if this was already asked.. But if I'm taking 30% of my paycheck to put into 401K how do I calculate my savings rate as that is taken out pre tax :/

I add the 401k contributions to my total income and savings. So my calculations end up looking like this.


Income
   Take home = 5,265.40
   401k           = 1,199.96

Charity = 525.52

Total income  = Take home + 401k - Charity   =  5,939.84


Total Savings = 401k contributions + Savings = 2,880.62


2,880.62/5,939.84 = 48.5% Savings Rate


Just my way of doing it. :)

SS

[Zaga]

Apologies if this was already asked.. But if I'm taking 30% of my paycheck to put into 401K how do I calculate my savings rate as that is taken out pre tax :/

Short answer is it's up to you.

What I do is:

Savings = 401-K contributions + other investments + company match + debt paydown
divided by
Net income = Take home pay + 401-K contributions

[Sebastian]

Thanks for the explanation from the two posts above :)

Looks like I'm at 48% :(

I wish I could go higher but I'd literally need to make more money at this point as I really can't lower my expenses. I mean I can once I sell my car off, but I'm pretty bare bones as it is. I could also try and find a cheaper place to live, but I honestly don't want to move back into low income. There is just peace of mind living where I do now and it's not much more.

[step_away]

What I do is:

Savings = 401-K contributions + other investments + company match + debt paydown
divided by
Net income = Take home pay + 401-K contributions

I do something similar, but I include the company match in the net income.  Otherwise my ratio would be higher than it is at about 90% of net income.

[highwayskies]

Having found this blog, I've made many changes (biking/bus to work, traded to a car I own, hypermiling, refinancing, etc), and most helpfully, will be moving home with my mother.  Will be going from -2% savings rate to 66% when all is done.  The resulting savings put me on track to live off of passive income from property by 2020.

[Workinghard]

Thanks for the explanations above on calculating savings rates. I had no idea where to begin! The one deducting charity especially helped as that's a big chunk every month.

[tomsang]

Thanks for the explanations above on calculating savings rates. I had no idea where to begin! The one deducting charity especially helped as that's a big chunk every month.

I would not deduct charity unless you plan to cut it out in retirement. Charity to me is an expense so I leave it in as an expense. As someone else stated, as long as you are consistent then the ratio provides some meaning on how you are doing.

I also don't include investment gains as that is assumed in the retirement math to calculate years to retirement. Again the ratio is mostly for fun!!!

P.S. Comparing your ratio to others is almost impossible as people calculate it differently  and everyone's facts about perks and expenses are different. As an example, as a Partner in our firm I pay 100% of my medical for my family with a cost of around $14,000. Our employees pay 20% of that for a cost of $2,800. Others include paying for gym memberships, cell phones, lunches/food at work, mileage, data plans, etc.

[Workinghard]

Thanks for your input, tomsang.  I know we will still give in retirement, but it will be much less due to less income. Since giving is our largest expense by far, it's helpful to know the percentage we're saving excluding that. As you said people calculate things differently.  Hmm, which means I could count giving as savings or "investment" for our long term future.

[Thespoof]

I'm consistently at 48% of my net pay from my regular work, but I also have an additional $5000-10,000 per year from side gigs that I throw into savings/investing. I don't consider that money into my regular income though because I'm too lazy to track it as income because it varies so much. I track my net worth and it ends up in there anyway. I'd love to crack the 50% mark on a regular basis, but I just can't trim anymore.

[MinimalistMoustache]

Currently, I'm at about 40% savings (not including company match). Would like to aim for a rate of 50% in the next few months. Sole income and rent is the biggest bite out of the budget. Yet, it's still a good price for living in a beautiful location, only one mile from work.

[FIreDrill]

Update for the end of March.  We had ridiculously high income in March due to tax refund and another bonus.  This enabled us to get our savings rate above 70% for the month and bumped our YTD savings rate above our 50% goal, now we just have to keep it up.  We are expecting to have an increased amount of spending in the next couple month due to several factors but I am hoping we can keep our savings rates for the next couple months between 40% and 50%.


March Savings Rate

Income
   Take home = 9,755.43
   401k      = 1,070.84        

   
Savings
   From Net  = 6,593.31
   From 401k = 1,070.84    
   
   
Charity      = 541.40



Total income - Charity    = 10,284.87
Total Savings          = 7,664.15

7,664.15/10,284.87 = 74.5% Savings Rate


Month      Savings      Income      Savings Rate   

January      2,988.21   7,048.30   42.4%   
February   2,813.00   5,939.84   47.4%   
March      7,664.15   10,284.87   74.5%   

YTD         13,465.36   23,273.01   57.9%   

[Ian]

91% for March. Gas is my most expensive utility, so as it gets warmer my necessary expenses will go down.

[littleone]

I don't make much, but I am able to save 47% of my take home pay, plus 8% pretax for 401k. Does not leave me with much but I am able to get by on 234 a week. Except when I have to pay for school and books then I have to dip in the savings. But that will change at the end of the year when work will start paying for school!

[countdown]

At 45% of gross and trying for 50%. Hurdles: preschool, saving for a car, and late payments from side biz. Plan... keep on trucking? Hubby's going to pick up more days at work, but that requires an extra $500/mth in daycare, so that might actually be a net loss. We expect to have the car paid for by the end of the year, so 2015 might be the big 50(%). Inspiring thread!

[sleepyguy]

WOW, some of those % are awesome!

We're at 35% right now but living just off my income.  Once my GF/SO starts working again (Aug) then we'll be stashing her entire  pay, which would bring us close to 80%.  Yes she makes A LOT more than I do :)

[Ottawa]

I grabbed a snip of our savings rate over time (Oct 2012 to present).  April 2014 will not be 92%...but we're hoping for in excess of 80%.  These figures are based on Net income and do not include return on investments - only income from work in and expenses out.
February and March are typically not great with insurance, property taxes due...
 

[FIreDrill]

I grabbed a snip of our savings rate over time (Oct 2012 to present).  April 2014 will not be 92%...but we're hoping for in excess of 80%.  These figures are based on Net income and do not include return on investments - only income from work in and expenses out.
February and March are typically not great with insurance, property taxes due...

That is an awesome graph!  I'm really hoping we can get ours up to a steady 75% in the next couple years.  We will most likely need to increase our income to accomplish this but I'm going to try to cut as much spending as possible along the way.

[FIreDrill]

I grabbed a snip of our savings rate over time (Oct 2012 to present).  April 2014 will not be 92%...but we're hoping for in excess of 80%.  These figures are based on Net income and do not include return on investments - only income from work in and expenses out.
February and March are typically not great with insurance, property taxes due...

That is an awesome graph!  I'm really hoping we can get ours up to a steady 75% in the next couple years.  We will most likely need to increase our income to accomplish this but I'm going to try to cut as much spending as possible along the way.

Soooo.... I got jealous of your graph and made my own, :).  April numbers are not accurate though.

[Ottawa]

Soooo.... I got jealous of your graph and made my own, :).  April numbers are not accurate though.

Well done SS - I like the trend you've got going!  Of course, always keep the overall trend in mind (why I added the trendline) since you'll get hammered by certain bills that potentially cause a single month savings rate to look terrible. 

I find it very helpful to:
- understand where we are at big picture-wise
- compare year/year
- see progress and celebrate personal bests.

Also, this is just one sheet of a giant opencalc spreadsheet that details and data mines all savings and spending transactions!

We have other spreadsheets like
-all transactions month/month
-grocery spending month/month
-income by month
-spending by month
-rolling year (i.e. drop a month off the back as a new month finishes) - to see our annual expenses change

and so on...if we want to launch an enquiry into say...pet costs or alcohol costs etc...can do! 

[ViragoStache]

We're at about 56% and I'm looking for 70% this year (this is of my "take home pay" - which is gross - taxes, so it includes the 401k pre-tax contribution).  I'd rather have this higher as this does include the company match but I don't like including that since even though I worked for it, it's not a savigns based on anything I did.

[FIreDrill]

Well my 401k contribution change just took place.  I am now staching 38% of my gross pay into a 401k which will be enough to max it out, :).  I've never been so happy to see my take home pay be so low, lol.  My wife should be eligible to contribute to her companies 401k plan soon but I doubt it will be a significant amount to start.  For now we will be able to max out my 401k, our IRA's, and hopefully we will be able to max out the wife's 401k in the next couple years.  I'd love to tax shelter 46k/year!

[steveo]

My goal is 70%. I'm currently at 68% but increasing it is hard.

[voxpopular]

I'm setting my yearlong goal at 66%. So far my rate has actually been negative because I got face-punchingly spendy when I moved out of my parents' house. However, I'm graduating from college in a month and going full time, and then I plan to max out my 401k, IRA, and HSA. :D If I'm diligent, I should have a few thousand left over to start an after-tax Vanguard account as well.

I intend to use payroll deductions and automatic transfers to the max, so I don't see a monthly income much different from my current college student status. I'm not jonesing for a new apartment or car or anything, so I feel pretty good about all this.

[nicknageli]

Well my 401k contribution change just took place.  I am now staching 38% of my gross pay into a 401k which will be enough to max it out, :).

Way to go! 

[Herbert Derp]

Got a raise, so looks like I'll be meeting my goal. I should be consistently in the 90's now (except for months with high one-off expenses).

[FIreDrill]

Got a raise, so looks like I'll be meeting my goal. I should be consistently in the 90's now (except for months with high one-off expenses).

Congrats!

[Herbert Derp]

Looks like I was premature in announcing that. Yesterday, I was told that my rent will be increasing by 10-15%, which nullifies most of the savings rate gains from my raise. I should still have a higher savings rate, but I don't think it will be enough to consistently hit 90%.

[Rural]

We're set up to save 54% of gross through pretax payroll deductions. We may should be able to save more than that, but it'll be out of take-home.

[Ian]

Looks like I was premature in announcing that. Yesterday, I was told that my rent will be increasing by 10-15%, which nullifies most of the savings rate gains from my raise. I should still have a higher savings rate, but I don't think it will be enough to consistently hit 90%.

These kinds of events beyond your control suck. I try to view them as an opportunity to accept those things I can't change...

[FIreDrill]

Looks like I was premature in announcing that. Yesterday, I was told that my rent will be increasing by 10-15%, which nullifies most of the savings rate gains from my raise. I should still have a higher savings rate, but I don't think it will be enough to consistently hit 90%.

Man that's a bummer but at least the pay raise will cancel out the raise in rent.  :)

[FIreDrill]

Well April turned out to be better than I expected.  Ended up with a savings rate of 49.99% but I rounded up to 50% :P.  We did a lot of Craigslist shopping in preparation for things we will want in the new house so that will save us a bit of money in the long run.  Updates below!


April Savings Rate

Income
   Take home = 4,984.95
   401k      = 1,632.93   

   
Savings
   From Net  = 1,438.06
   From 401k = 1,632.93      
   
   
Charity      = 475.00



Total income - Charity    = 6,142.88
Total Savings          = 3,070.99 

3,070.99/6,142.88 = 49.99% Savings Rate


Month      Savings      Income      Savings Rate   

January      2,988.21   7,048.30       42.4%   
February    2,813.00   5,939.84       47.4%   
March        7,664.15   10,284.87     74.5%   
April           3,070.99   6,142.88       50.0%

YTD         16,536.35   29,415.89      56.22%   

[Sonorous Epithet]

I'm only at 23% of net+401k now but would like to get to around 30% by the end of the year.

I have 22% of net+401k going towards non-stache short term savings. When those goals are met in about a year, it will go towards stache savings.

[Peter]

Aiming for 69% this year. Was 66% for 2013.

[Ian]

86% for April. Necessary medical expenses to renew my contract dropped my number, and the associated re-signing bonus won't happen for a while. Hoping to get a string of higher months over the summer.

[samburger]

I'm aiming for 50% this year. We started out the year with almost nothing but some clothes, so we had some furnishing to do ($$$), and we're paying tuition this year.

I'm late to the party, so here's where I am for the year. We net $5100/mo:

Jan - 71% or $3,621
Feb - 11% or $561 (We furnished our apartment and paid first/last--I was surprised we weren't negative this month, actually!)
March - 49% or $2500
April - 49% or $2500

We're at 45% for the year so far.

[mostlyeels]

2013 (pre-MMM) around 55% of net.  Since then it's been consistently around 72% (own my own home, no mortgage, no debt).  I'd like to bump that up a little again this year ... let's see what's possible.

[Suit]

Right now I'm at about 67% including repaying student loans but I'm hoping to go up to about 73% once I start maxing out my 457b plan next month! So hopeful I can wind up with an average of 70% this year. This is super exciting! Good luck to everyone on their goals!

[secondcor521]

I was at 60% for 2013, and I'd expect to be around that for 2014.

60.4% YTD.

[FIreDrill]

May was a down month for us.  We moved into our new house and we came across a good amount of moving expenses and we are still having random things come up.  Also, I splurged a little and bought a bike and about every part of our budget was blown for the month.  We probably had about 1300 worth of none normal spending.  Anyways, here are the numbers.  Looking forward to hopefully a little better June!



May Savings Rate

Income
   Take home = 4,116.38
   401k      = 2,358.04   

   
Savings
   From Net  = -131.84
   From 401k = 2,358.04      
   
   
Charity      = 409.60



Total income - Charity    = 6,064.82
Total Savings          = 2,226.20 

2,226.20/6,064.82 = 36.7% Savings Rate


Month      Savings      Income      Savings Rate   

January      2,988.21   7,048.30   42.4%   
February   2,813.00   5,939.84   47.4%   
March      7,664.15   10,284.87   74.5%   
April      3,070.99   6,142.88   50.0%
May       2,226.20   6,064.82   36.7%

YTD      18,762.55   35,480.71   52.88%