Poll

What was your overall savings rate in 2020?

0-10%
1 (1.1%)
11-20%
2 (2.1%)
21-30%
14 (14.9%)
31-40%
13 (13.8%)
41-50%
15 (16%)
51-60%
20 (21.3%)
61-70%
9 (9.6%)
+70%
20 (21.3%)

Total Members Voted: 94

Author Topic: Share your 2020 savings rate!  (Read 2667 times)

FI45RE

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Share your 2020 savings rate!
« on: December 31, 2020, 01:19:43 PM »
As my SO and I are updating the spreadsheets to finish up EOY numbers, I am happy to see our overall savings rate hit 62.63% for 2020, up from 42% last year. I know there are a ton of ways to calculate savings rates, but we just keep it simple and use savings/net income.

What were your savings numbers this year? Hopefully this will encourage some to update spreadsheets one last time for 2020 and also be a good reminder for 2021 to increase savings even more! The vast majority of our savings went to VTSAX in Vanguard, and total $ savings amount was just a hair over $100k at $103,250, including 403(b) contributions and IRAs.

Happy New Year, all!

ixtap

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Re: Share your 2020 savings rate!
« Reply #1 on: December 31, 2020, 01:22:14 PM »
55%, but we keep it even more simple and use savings/gross.

FI45RE

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Re: Share your 2020 savings rate!
« Reply #2 on: December 31, 2020, 01:49:36 PM »
55%, but we keep it even more simple and use savings/gross.

Nice! 55% is awesome. We made a lot of minor adjustments to get ours above 60%. I'm hoping we can become more efficient in 2021 and push it over 65%.

ixtap

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Re: Share your 2020 savings rate!
« Reply #3 on: December 31, 2020, 02:43:44 PM »
55%, but we keep it even more simple and use savings/gross.

Nice! 55% is awesome. We made a lot of minor adjustments to get ours above 60%. I'm hoping we can become more efficient in 2021 and push it over 65%.

We plan to spend more in 2021 to knock out some pending projects and prepare for our indefinite sabbatical.

NotJen

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Re: Share your 2020 savings rate!
« Reply #4 on: December 31, 2020, 03:13:37 PM »
For the first time in my life, 0% (maybe -9%? I earned $5600 and failed to reinvest $500 of the dividends from my taxable investments).

I quit last year, and planned for no income and no savings this year.  It doesn't feel as weird as I thought it would, but aside from that accidental-ish $500 I kept, I haven't had to touch my investments yet.  I always thought I might be able to save even if I made a miniscule amount, but proved myself wrong this year!


Great job everyone over 50%!

Blissful Biker

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Re: Share your 2020 savings rate!
« Reply #5 on: December 31, 2020, 04:05:19 PM »
We achieved 41% of gross income or 53% of net, which I am really pleased with.  It's the highest we've achieved since I (the breadwinner) downshifted to part time work about 5 years ago.  Certainly, being homebodies this year helped us ramp up our saving but we also had a lovely year.  I am considering lowering our FIRE target having experienced excellent quality of life with lower spending.
« Last Edit: January 01, 2021, 09:15:43 AM by Blissful Biker »

oneslypig

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Re: Share your 2020 savings rate!
« Reply #6 on: December 31, 2020, 07:20:48 PM »
Actual: 51.56%
Average monthly: 53%
Minimum monthly: 10%
Maximum monthly: 80%

We cancelled a big vacation planned for this year, so if the stars align and we are able to do that, it might be impactful negatively. Hoping to see salary and increased employer ESPP contributions off set it though.

Weisass

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Re: Share your 2020 savings rate!
« Reply #7 on: December 31, 2020, 07:34:05 PM »
Could have been so much better....11%, in large part due to paying for childcare so that we could stay employed.

Zikoris

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Re: Share your 2020 savings rate!
« Reply #8 on: December 31, 2020, 07:36:14 PM »
69% for us, spending about 24K total. We normally fall somewhere between 60-70%, so we're happy with that.

MudPuppy

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Re: Share your 2020 savings rate!
« Reply #9 on: December 31, 2020, 08:04:09 PM »
It was an expensive year for us medically. Our pure savings rate was 25% but including the extra mortgage principal payments it was about 30%. Wish it were better, but oh well.

Freedomin5

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Re: Share your 2020 savings rate!
« Reply #10 on: January 01, 2021, 03:12:04 AM »
About 80%, using savings/net income. We had to pay for very expensive flights to and from China, but did not spend anything on vacations, and we received bonuses from work for coming back to our jobs despite our government’s recommendation to avoid travel, so it kind of evened out.

Morning Glory

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Re: Share your 2020 savings rate!
« Reply #11 on: January 01, 2021, 05:26:08 AM »
A solid 56% Spending was a bit higher than last year, mainly due to a large medical bill. Income was a bit higher even though I worked less and husband quit his part time job. I tracked every receipt for a detailed spending report too!!! PDF is attached. We have 2 adults and 2 young children in MCOL area of US midwest.

« Last Edit: January 01, 2021, 07:31:41 AM by Morning Glory »

hal

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Re: Share your 2020 savings rate!
« Reply #12 on: January 01, 2021, 07:57:33 AM »
42% for us. Most of that was in the latter half of the year, once I had found a new job (spent about 6 months solely on my wife's income, which covered expenses only). Can't wait to ratchet it up in 2021.

Queen Frugal

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Re: Share your 2020 savings rate!
« Reply #13 on: January 01, 2021, 08:04:10 AM »
Wow you all are bad ass!

I am at 46% net taxes and business expenses. It includes savings and the extra money I put down on my mortgage when I refinanced this year. I am just over the moon pleased with myself for hitting this savings rate.

American GenX

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Re: Share your 2020 savings rate!
« Reply #14 on: January 01, 2021, 06:39:01 PM »

Just calculated per the 2020 spending thread:

https://forum.mrmoneymustache.com/welcome-to-the-forum/2020-spending-thread/

It turns out my savings rate was 80.2% for all of 2020 using the MMM calculation method.


American GenX

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Re: Share your 2020 savings rate!
« Reply #15 on: January 01, 2021, 07:03:02 PM »
You can find MMM's method for calculating savings rate here, from which I have copied his examples:

https://www.mrmoneymustache.com/2015/01/26/calculating-net-worth/

Check the Spending section

Everything that flows out of your wallet, bank account, credit cards,  or automatic payroll deductions for things like insurance.

Finer Points:
I include property taxes and sales tax, but do not count income tax or other payroll taxes.
I include all loan interest and fees, but do not count the principal portion of loan payments

Read the section called Take Home Pay

The MMM Take Home Pay calculation would thus be:

Gross Pay + Employer 401(k) match – taxes and fees
= $8620 gross pay + $300 employer 401(k) match – $1724 federal tax – $689 state tax -$200 professional fees
= $6407 biweekly or $13,839 per month


After determining Take Home Pay and Spending, see the Savings Rate section:

The savings rate is simply the percentage of your take home pay that you’re not spending.

(Take home pay – spending) / (take home pay) , then multiply by 100 to get a percentage

For Joe, it would look like this:

($13,839 – $8919) / ($13,839)    x    100

= 35.5%
« Last Edit: January 02, 2021, 06:41:53 PM by American GenX »

ender

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Re: Share your 2020 savings rate!
« Reply #16 on: January 01, 2021, 10:34:44 PM »
We were, by some absurd miracle, about 50% in 2020 still. We saved about what we spent. Closer to 35% of gross.

I'd like to say it's because of badassity but it's really because of "still pretty frugal" and high income ity.

SpareChange

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Re: Share your 2020 savings rate!
« Reply #17 on: January 01, 2021, 11:14:22 PM »

You can find MMM's method for calculating savings rate here, from which I have copied his examples:

https://www.mrmoneymustache.com/2015/01/26/calculating-net-worth/

First you need to read the section called Take Home Pay

The MMM Take Home Pay calculation would thus be:

Gross Pay + Employer 401(k) match – taxes and fees
= $8620 gross pay + $300 employer 401(k) match – $1724 federal tax – $689 state tax -$200 professional fees
= $6407 biweekly or $13,839 per month

Then once you determine take home pay, see the Savings Rate section:

The savings rate is simply the percentage of your take home pay that you’re not spending.

(Take home pay – spending) / (take home pay) , then multiply by 100 to get a percentage

For Joe, it would look like this:

($13,839 – $8919) / ($13,839)    x    100

= 35.5%

I was curious how I'd do this year on this one. Savings rate, though not perfect, has always had a place in my heart as a measure of Mustachian muscle. My last year as a full-timer I was over 80% using the above method. 2020 was my first full year pt...still made it to 59.1%. Worked more than I had planned though. What a wild year. Very unlikely to hit that high this year. :)

overwhelmed

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Re: Share your 2020 savings rate!
« Reply #18 on: January 02, 2021, 07:58:09 AM »
Happy New Year to all!

When I answered the poll, I forgot to add in the 401k employer match - 32%.
When I put my employer match it moved to 45%. I just used savings/gross.
I'm happy with that.


MasterStache

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Re: Share your 2020 savings rate!
« Reply #19 on: January 02, 2021, 08:22:35 AM »
Hmmm, based of what will be reported as income on our taxes, I think we were probably around 35-40%. That's with me being retired and my spouse working on average 32 hours per week. Funny thing is, we aren't really in accumulation phase either. It was definitely a great year for us as far as finances is concerned. 

Gingersnaps

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Re: Share your 2020 savings rate!
« Reply #20 on: January 02, 2021, 08:50:57 AM »
Very rough tally but 55.6%

Very happy with that as was aiming for 50%+, now that's savings as a percentage of our take home salary - and pensions and shareschemes are taken out before that but it's the best way I can work it out

RobertFromTX

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Re: Share your 2020 savings rate!
« Reply #21 on: January 02, 2021, 09:43:38 AM »
69% savings rate on $23,796 of annual expenses.

I've made some adjustments and think 2021 will be even better.

the_gastropod

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Re: Share your 2020 savings rate!
« Reply #22 on: January 02, 2021, 11:08:35 AM »
69% savings rate on $23,796 of annual expenses.

I've made some adjustments and think 2021 will be even better.

Nice

force majeure

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Re: Share your 2020 savings rate!
« Reply #23 on: January 02, 2021, 12:13:16 PM »
150% of monthly salary.
Thats what I am at now,
and ready to quit on FEB.

Pot size is 700k
spent 4600 last year.

Sandi_k

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Re: Share your 2020 savings rate!
« Reply #24 on: January 02, 2021, 05:08:54 PM »

The MMM Take Home Pay calculation would thus be:

Gross Pay + Employer 401(k) match – taxes and fees
= $8620 gross pay + $300 employer 401(k) match – $1724 federal tax – $689 state tax -$200 professional fees
= $6407 biweekly or $13,839 per month


This makes no sense. What if the tax withholding is wrong, and you owe $10k in April?

What if you choose to enroll in disability insurance programs, or legal insurance, or pet insurance programs, or have to pay for parking out of your paycheck?  Those are entirely voluntary, and not really outside of your discretionary choice, so should not be counted as excluded from gross income.

Sandi_k

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Re: Share your 2020 savings rate!
« Reply #25 on: January 02, 2021, 05:20:25 PM »
OK, I added up:

Mandatory pension payments
Voluntary retirement contributions
Increase in value of savings accounts

That total, divided by gross salary, minus estimated 1040 and 540 taxes due.

That gives us a savings rate of 40% for 2020.

 

American GenX

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Re: Share your 2020 savings rate!
« Reply #26 on: January 02, 2021, 06:21:27 PM »

The MMM Take Home Pay calculation would thus be:

Gross Pay + Employer 401(k) match – taxes and fees
= $8620 gross pay + $300 employer 401(k) match – $1724 federal tax – $689 state tax -$200 professional fees
= $6407 biweekly or $13,839 per month


This makes no sense. What if the tax withholding is wrong, and you owe $10k in April?

What if you choose to enroll in disability insurance programs, or legal insurance, or pet insurance programs, or have to pay for parking out of your paycheck?  Those are entirely voluntary, and not really outside of your discretionary choice, so should not be counted as excluded from gross income.

Personally, I don't think you should subtract insurance of any kind that isn't specifically required to do the job, whether it's health, umbrella, dental, for your pet, etc.  Same with parking fees.  That's money spent.  It's irrelevant whether something automatically comes out of your paycheck, or if you pay another way.  I have insurance, flex spending, and charity donations that come out of my paycheck, but that's still spending.  I'm only subtracting taxes.

Here's from MMM spending section: (I hadn't included this in my previous post, so just added it there.)

Everything that flows out of your wallet, bank account, credit cards, or automatic payroll deductions for things like insurance.

Finer Points:
I include property taxes and sales tax, but do not count income tax or other payroll taxes.
I include all loan interest and fees, but do not count the principal portion of loan payments


If you think you will get a big refund or owe more on taxes, you could estimate what your actual taxes are vs. what was withheld.  I didn't do that, and I'm expecting a big return this year because I increased my withholding more than I should have, but some quick calculations of estimating the difference doesn't increase my savings rate much above 80.2%.

"Increase in value of savings accounts" should only include your new contributions, not any gains/interest/dividends, etc., since those are not considered part of your take home pay.  If your employer contributed anything towards your retirement, that should be added to BOTH SIDES of the equation as part of the take home pay.
« Last Edit: January 02, 2021, 06:52:38 PM by American GenX »

Morning Glory

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Re: Share your 2020 savings rate!
« Reply #27 on: January 02, 2021, 07:13:32 PM »

The MMM Take Home Pay calculation would thus be:

Gross Pay + Employer 401(k) match – taxes and fees
= $8620 gross pay + $300 employer 401(k) match – $1724 federal tax – $689 state tax -$200 professional fees
= $6407 biweekly or $13,839 per month


This makes no sense. What if the tax withholding is wrong, and you owe $10k in April?

What if you choose to enroll in disability insurance programs, or legal insurance, or pet insurance programs, or have to pay for parking out of your paycheck?  Those are entirely voluntary, and not really outside of your discretionary choice, so should not be counted as excluded from gross income.

Personally, I don't think you should subtract insurance of any kind that isn't specifically required to do the job, whether it's health, umbrella, dental, for your pet, etc.  Same with parking fees.  That's money spent.  It's irrelevant whether something automatically comes out of your paycheck, or if you pay another way.  I have insurance, flex spending, and charity donations that come out of my paycheck, but that's still spending.  I'm only subtracting taxes.

Here's from MMM spending section: (I hadn't included this in my previous post, so just added it there.)

Everything that flows out of your wallet, bank account, credit cards, or automatic payroll deductions for things like insurance.

Finer Points:
I include property taxes and sales tax, but do not count income tax or other payroll taxes.
I include all loan interest and fees, but do not count the principal portion of loan payments


If you think you will get a big refund or owe more on taxes, you could estimate what your actual taxes are vs. what was withheld.  I didn't do that, and I'm expecting a big return this year because I increased my withholding more than I should have, but some quick calculations of estimating the difference doesn't increase my savings rate much above 80.2%.

"Increase in value of savings accounts" should only include your new contributions, not any gains/interest/dividends, etc., since those are not considered part of your take home pay.  If your employer contributed anything towards your retirement, that should be added to BOTH SIDES of the equation as part of the take home pay.
This. I add back tax refunds from the prior year as income.

Sandi_k

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Re: Share your 2020 savings rate!
« Reply #28 on: January 02, 2021, 08:06:37 PM »

The MMM Take Home Pay calculation would thus be:

Gross Pay + Employer 401(k) match – taxes and fees
= $8620 gross pay + $300 employer 401(k) match – $1724 federal tax – $689 state tax -$200 professional fees
= $6407 biweekly or $13,839 per month


This makes no sense. What if the tax withholding is wrong, and you owe $10k in April?

What if you choose to enroll in disability insurance programs, or legal insurance, or pet insurance programs, or have to pay for parking out of your paycheck?  Those are entirely voluntary, and not really outside of your discretionary choice, so should not be counted as excluded from gross income.

Personally, I don't think you should subtract insurance of any kind that isn't specifically required to do the job, whether it's health, umbrella, dental, for your pet, etc.  Same with parking fees.  That's money spent.  It's irrelevant whether something automatically comes out of your paycheck, or if you pay another way.  I have insurance, flex spending, and charity donations that come out of my paycheck, but that's still spending.  I'm only subtracting taxes.


Agree! I am only subtracting taxes as well. That's why his list makes no sense.

- Refunds get added back as income.
- The tax stimulus payment gets added back as income.
- Principle payment against the house counts as savings.
- Change in account value due to increased savings --> counts as savings.
- Contributions to retirement accounts counts as savings - but the net gains do not.

SotI

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Re: Share your 2020 savings rate!
« Reply #29 on: January 03, 2021, 02:13:27 AM »
53%.
Which is worse than the previous year but I counted in my spend some loan to family that I hope to see again.

I calculate this as anything going into my savings or investment accounts against net income, i.e. after tax and social contributions.

hounton

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Re: Share your 2020 savings rate!
« Reply #30 on: January 03, 2021, 08:07:49 AM »
Well, that was a wake up call.  I would have estimated 20-30 percent and numbers came out a whopping 72 percent.  That can't be right and I'll still go back over it.  I am a medium wage worker (high school teacher) and my husband is a part time bus driver (critically, this pays the health insurance for our family).  We have three teenagers and the boys eat a lot!  In fact, one of our sons is having trouble keeping weight on and we have allowed him to indulge in a daily high calorie restaurant breakfast burger which he is craving. 

But then I reflected that covid has played a big part in saving:  no parking, packing lunches, kids spending too much at school, gas, insurance (we cut down to sharing one car), gym, summer camps, bus passes for kids and no vacation.  I've cooked more at home.  No restaurants except the daily breakfast burger for the teenager who has grown four inches in the last year.  our house and car is paid for. 

I expect next year will not be as high and dd will be going to college, but coronovirus really gave us a bump in our savings. I am enjoying the lower expenses.

Cindi

FI45RE

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Re: Share your 2020 savings rate!
« Reply #31 on: January 03, 2021, 09:28:26 AM »
150% of monthly salary.
Thats what I am at now,
and ready to quit on FEB.

Pot size is 700k
spent 4600 last year.

$4,600 total annual spend? Do tell!

FI45RE

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Re: Share your 2020 savings rate!
« Reply #32 on: January 03, 2021, 09:31:21 AM »
Well, that was a wake up call.  I would have estimated 20-30 percent and numbers came out a whopping 72 percent.  That can't be right and I'll still go back over it.  I am a medium wage worker (high school teacher) and my husband is a part time bus driver (critically, this pays the health insurance for our family).  We have three teenagers and the boys eat a lot!  In fact, one of our sons is having trouble keeping weight on and we have allowed him to indulge in a daily high calorie restaurant breakfast burger which he is craving. 

But then I reflected that covid has played a big part in saving:  no parking, packing lunches, kids spending too much at school, gas, insurance (we cut down to sharing one car), gym, summer camps, bus passes for kids and no vacation.  I've cooked more at home.  No restaurants except the daily breakfast burger for the teenager who has grown four inches in the last year.  our house and car is paid for. 

I expect next year will not be as high and dd will be going to college, but coronovirus really gave us a bump in our savings. I am enjoying the lower expenses.

Cindi

Wow, 72% is phenomenal! Let us know what you find when you recalculate.

American GenX

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Re: Share your 2020 savings rate!
« Reply #33 on: January 03, 2021, 09:46:07 AM »
Agree! I am only subtracting taxes as well. That's why his list makes no sense.

- Refunds get added back as income.
- The tax stimulus payment gets added back as income.
- Principle payment against the house counts as savings.
- Change in account value due to increased savings --> counts as savings.
- Contributions to retirement accounts counts as savings - but the net gains do not.

Oh, I forgot to add the stimulus into my calculations!  And depending on how much of a tax refund I get, my savings rate could jump up to 82%+.  I probably missed something on the spending side, so that might balance it out a little.

Total change in savings account value doesn't count - only contributions made to savings.  Same thing as retirement accounts.  I mentioned that in my previous post.  That goes along with the MMM method.

Sandi_k

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Re: Share your 2020 savings rate!
« Reply #34 on: January 03, 2021, 10:30:46 AM »

Total change in savings account value doesn't count - only contributions made to savings.  Same thing as retirement accounts.  I mentioned that in my previous post.  That goes along with the MMM method.

Agreed. Interest was so low for 2020 that it doesn't change the percentages...

2Birds1Stone

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Re: Share your 2020 savings rate!
« Reply #35 on: January 03, 2021, 10:37:31 AM »
60%, but only because I was not working for 45 weeks and DW for 42. Our spending was <$17k for the year.

Kazyan

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Re: Share your 2020 savings rate!
« Reply #36 on: January 04, 2021, 08:55:55 AM »
Something like 61%? My spreadsheet doesn't lend itself well to finding an instantaneous savings rate, but the value was consistently around there.