For a long time I was patting myself on the back for saving between 42-48% of my income each month. These savings include investments (401K and IRA), a mortgage down payment, an emergency fund, higher education, a Swiss watch, a used car, and a vacation.
As a recent MMM reader it occurred to me that while my investments are going towards retirement, nearly all my other perceived “savings” are actually going to be spent -- but in the near future (mortgage, watch, car, vacation, higher education, etc.). So are these true savings? They are not bringing me closer to retirement, but rather are ways to maturely purchase things/experiences to avoid unnecessary debt.
Now, it appears I am only saving 23% of my income towards retirement with the other money going towards different purchasing goals.
So what constitutes savings (ie when MMM advocates saving 50% of your income)? Do only retirement savings count? And how do these saving/purchasing goals play a role? Thanks.