This crazy thread on Bogleheads....

[chicagomeg]

http://www.bogleheads.org/forum/viewtopic.php?f=1&t=119049&newpost=1739186

Salary of 180-210 annually, putting only $40k into savings and "can't imagine pinching any more pennies from our budget" to save more. What the what?!?!

[Joet]

Looks like they budget 8100/mo spending including childcare. Also the commissioned based income is a little irregular although they did give a range of 180-210.

Speaking as someone in their shoes, the answer is staring them in the face

[arebelspy]

http://www.bogleheads.org/forum/viewtopic.php?f=1&t=119049&newpost=1739186

Salary of 180-210 annually, putting only $40k into savings and "can't imagine pinching any more pennies from our budget" to save more. What the what?!?!

You missed another key point: WANT to be putting 40k in savings, but will only manage 20k.

From the thread (emphasis added):

We will not meet that this year due to debt payoffs but are on-target and withholding / budgeting to meet the 40K for 2014. We will probably end up in the 20K range FY 2013 to 401K only.

Only hitting half their goal means who knows if they'll even get close next year.

That should be the easiest thing to hit: max out 401ks.  Done.  I'm sure they're getting hit with the AMT, so it'd save them taxes and they'd never see the money so they couldn't spend it.

I just feel bad for people like this.  They seem to be (rare exception aside) so unhappy.

[chicagomeg]

http://www.bogleheads.org/forum/viewtopic.php?f=1&t=119049&newpost=1739186

Salary of 180-210 annually, putting only $40k into savings and "can't imagine pinching any more pennies from our budget" to save more. What the what?!?!

You missed another key point: WANT to be putting 40k in savings, but will only manage 20k.

From the thread (emphasis added):

We will not meet that this year due to debt payoffs but are on-target and withholding / budgeting to meet the 40K for 2014. We will probably end up in the 20K range FY 2013 to 401K only.

Only hitting half their goal means who knows if they'll even get close next year.

That should be the easiest thing to hit: max out 401ks.  Done.  I'm sure they're getting hit with the AMT, so it'd save them taxes and they'd never see the money so they couldn't spend it.

I just feel bad for people like this.  They seem to be (rare exception aside) so unhappy.

Yeah, I didn't really read it very thoroughly because my head felt like it was going to explode after the first little bit...

[dragoncar]

Eh, they are doing better than many.  In typical bogleheads style, they aren't counting debt payoff as savings (that's why they won't hit the 40k-- debt payoff, so I'd call it a full 40k savings or 33% saving rate). 

Sure they could plan better.  It sounds like they basically live paycheck to paycheck on salary and then "save" the commission/bonus after taxes.

I imagine I work with a few who have similar numbers

[kyleaaa]

Eh, they are doing better than many.  In typical bogleheads style, they aren't counting debt payoff as savings (that's why they won't hit the 40k-- debt payoff, so I'd call it a full 40k savings or 33% saving rate). 

Sure they could plan better.  It sounds like they basically live paycheck to paycheck on salary and then "save" the commission/bonus after taxes.

I imagine I work with a few who have similar numbers

Yeah, they really aren't doing that bad. A 33% savings/debt-payoff rate is pretty solid. I don't get what's so crazy about this thread.

[wepner]

If you phrase it like that it's not too bad, but the fact is that man people (myself included) think that spending 150k or whatever a year is pretty outrageous in jut about any circumstances.

If these guys were making 18-21k per year and saving 4k then that's pretty awesome but not all percentages are created equal.

[dragoncar]

If you phrase it like that it's not too bad, but the fact is that man people (myself included) think that spending 150k or whatever a year is pretty outrageous in jut about any circumstances.

If these guys were making 18-21k per year and saving 4k then that's pretty awesome but not all percentages are created equal.

Yeah, apparently they spend 8k/mo and save around 3-4k/mo.  But they've doubled their income in the past few years, which means they are rapidly increasing their spending.  And on top of that, the "lifestyle they want to lead" will cost 10k/mo.  Ack!  I take it back, they are going to be in trouble in the future.