Savings...

I read on MarketWatch that the U.S. personal savings rate jumped to 5.7%, which is a 14 year high. This is financial good news but not so much for retail. Not long ago, like last year, the average personal savings rate was actually negative. Is this new savings mentality commensurate with the TBR community?

 

Quicken tells me I have saved 17% of my money so far this year. Been building up my emergency fund. It was actually near 20% a few months ago before a couple of big purchases (fixing up my house and such) hit. I've got one more big event to save up for and I will cut back some on emergency/event savings and up my retirement saving even more. That event being the 20% we have to cover on the baby being born in October. Should have that done by July.

The other thing we will start working money towards is building a house. We are going to cash flow as many things as we possibly can and try to keep the mortgage as low as possible. Course, finding the land first would be helpful.

 

Fuck no. I'm the opposite, but that's because my income has dumped so badly the last 18 months.....

Hopefully that will change.

Maybe off topic - does the 'savings rate' referenced include contributions to retirement plans, or just money tossed into savings accounts? Doesn't change my personal situation, just how it's measured.

 

You know, i wondered that too. If I add in what I am putting into retirement, I am in the 20s no counting the company match. My 17% was only what I have put in a savings account for this year.

 

Here is what I found after looking at it:

Personal savings rate is calculated by subtracting the amount of spending from the amount of after-tax income. A negative savings rate means that consumers are spending more money than they have. The personal savings rate does not account for any money gained through investments or assets.

Puts me at 22% apparently

 

They basically calculate what gets spent vs what is earned.

interesting.

I gues that's the 'horde index'.

 

I calculate savings on everything except investment gains. As such, I would could what I put into my 401k each month as savings. If one puts say 6% in and is matched 6% that's 12% in savings without doing much of anything. Add that to what one can save from his/her paycheck each month and hitting 20% isn't that difficult if one chooses to live within ones means.

 

VA, doing it that way gets me into the 30s. Wow! I hadn't even really thought about it. Been looking at the trees instead of the forest. I'm really ready to get past some of the big events we've had lately and really start hammering away at retirement saving/college funding. But hey, in the past, the big events would have been more debt and now they are paid for big events not trailing me. Got to break that cycle which is tough.

 

Breaking a cycle is tough especially if you own a home due to what seems like constant projects that either you need or want to do. I do the 401k thing as well as have money ACHed into a seperate savings account each pay period. Every little bit helps. I tend to spend whatever cash I have in my pocket though which is why I try to keep as little cash on hand as possible.

 

See, I am just the opposite. The wife and I will try to see how little we can spend and then give some of that for a date night for us or use it as part of the next month's budget so we don't have to take out as much leaving more to do other stuff with. Course, I just detest spending now and need the wife to make sure I have a life.