"So if I am not saving enough then I just need to switch to a job that pays less and then I hit my number?

This formula doesn't make sense unless your salary is pretty static; my pay has increased substantially in the past 5 years. I am actually right at my number (if I count my retirement and non-retirement savings), but if I hadn't increased my pay so much I would look like a much better saver;)"


Just like with any rule of thumb, one is expected to put a modicum of though into it (like you just did). The rule applies to people who have a typical income growth. Its meant to be simple, not perfect.

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-----------------------------Baron Von Speedypants
-----------------------------RunTraining articles here:
http://forum.slowtwitch.com/...runtraining;#1612485

Don't hate me for bringing the median income of the LR down, but I'll bite.

By this formula, I'm astronomically low.

($30,000/10)(19 years old)= $57,000.



Yeah right.

It is overly simplistic, earnings are seldom linear. It also is most inaccurate when you have just begun your working life.

Yeah, I figured as much :)

I've also not begun my eventual career yet, as I'm still in college, so the good earning years are hopefully still ahead of me :)

I am going to open a Roth IRA soon, I'm just trying to figure out if I go through my local credit union, Charles Schwab, or somewhere that I don't know about yet...

This post is depressing. I am really curious to know what some of you are making a yr.

I make almost 85k and wife makes almost 70k. We put 2.5% in to a pension automatically and then we each have our own small 401k. I put 200 in a month and she almost does 100 a month (that needs to change). We have 20k in savings and that is it. We might have 100k in home equity but we are also only paying for a mortgage, car loan (4 yrs left) and daycare (2 yrs left).

We both are educators and have 15 years left. Guess we have a lot to adjust. I should probably sit down with someone to give us more guidance.

Unless you have an ungodly high mortgage, you need to be putting away more than $300 a month. I would think at least $1k/month

I think you'd need to list exactly where your expenditure is going

Your joint income is high, you need to determine how you're spending it

A good friend of mine and his wife were making about the same gross as you, the split was different, 120/40. They lived on her salary and saved his.

We both are educators and have 15 years left. Guess we have a lot to adjust. I should probably sit down with someone to give us more guidance.

It sounds like you have no idea where your money is going each month. You and your wife should pull out your bank and credit card statements and write down every single thing spent in the last month including all expenses that come out automatically. For many, they have set up so many monthly payments that come out automatically "for their convenience" that they lose track of their money. The mindless daily habits like coffee shops, magazine subscriptions, buying things you don't need because they are on sale etc., can kill any chance of savings.

As others said, look at the spending side. $155k combined income is more than enough to have built a substantial nest egg. My wife does not work, and only about 3 or 4 years ago was my single income higher than your combined. But even when I first started working and had a significantly lower salary, the first thing was to pay future self. I always maxed out my 401k space. It was taken off the top so I had to adjust to a lower take home pay.

Obviously if you live in a high cost of living area it will be more of a challenge. Fortunately we live in an average cost of living area, but we have never lived to keep up with the Jones's, paid off our house early to avoid as much debt as possible, buy new cars but drive them until their death, etc. We don't have kids, so we saved a chunk there. Today, because we have low expenses, I can easily save at least $4k/month on an income about 5% higher than your combined.

Our basic expenses (home/auto insurance, property taxes, utilities, HOA) come to under $24k. Even when we had a mortgage, that figure would only be another $15k or so. Butnnthat leaves a ton of headroom for food, entertainment, additional saving, etc. But the etc is where you can get killed on saving. Just because you make more than you need to live doesn't mean you should spend it all each month...

We make around 175k but our mortgage, for a small 70 year old house, and childcare for 1 kid is close to 70k a year.

We aren't saving nearly as much as I would like to.

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Long Chile was a silly place.

First few years of marriage early 90's 2 incomes total income then was probably 60Kish, I put 10% into 401k but that was only my half, wife did an IRA. Have ever since never really changed, after about 3 yrs had a kid went down to 1 income probably . 3 kids, have always put 10% in my 401k, and aggressively invested, have made about 9% avg return over the 28ish yrs. Income maybe 5 - 8yrs ago crossed into 6 figure, now slightly above. Mortgage paid off, same house we bought in the early 90's though did an addition (which cost more than the original purchase price, and just did a kitchen overhaul that cost about 2/3rds the initial house cost). I attribute it to putting in early, steadily and AGGRESSIVE investing. Had a year with 75% growth.. had a year with 50% loss. Have now gone to 30% cash as I am within 10yrs of retiring. the other 70% is all in market index funds

The sad reality, if you didn't start young, and didn't invest aggressive, its very very very hard to make it up.

All of my kids know Day 1 of your job put at least 10% or more into the retirement plan. If you never see it in a paycheck you will never miss it. You will learn to live a lifestyle of someone with 90% of your income.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

I say excuses. Put 10% in your retirement from day one no matter what you make, You will adjust your lifestyle accordingly.

So much harder to take a pay cut later and change your lifestyle. At 150K income your probably close to paying 30% total in income take so put $15k in 401k and bring home 10k less per year. Yup might mean moving into a smaller place or further out, but I bet they can make it work.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Sorry, it's been a while.

A few more tidbits about us. We live near DC and cost of living can be high. We do give money each month towards church groups. Some of you might not understand, but that won't change. We give the majority of our money donations to compassion international. check them out. We also donate to a small local radio station 91.9 wgts.

We have a 3 yr old and that ties up some money, but we aren't afraid to fo to places like once upon a child for clothes. Our biggest problem is eating out. We definitely need to get better at it.

We don't have credit card debt. I guess we've been too lazy with our money and need to invest it better. Thanks.

My story. Read Millionaire next Door, Wealthy Barber, Rich Dad Poor Dad. Followed the advice. Worked my butt off and invested.

Ex-wife, who really didn't like me after five kids over 25 years, had everything put in my name. Her reason was that if sued, they couldn't get both of us.

During the divorce, the judge gave her control of all of the real estate plus temporary support that was greater than state formula support. This put me in a bad spot as the rental homes went into foreclosure and the child support was so great that I was always on the back foot.

I was on target - no wait I was the target - to be a Millionaire. However, my ex got 2/3 of what I had and the lawyers got the other 1/3 over the 5 year divorce. My ex has since remarried a CFO and is living happily ever after.

Like +80% of divorced men, this really marginalized me with my children, church, etc. even though juvenile court turned the custody of the boys over to me during the divorce so I could get them through high school. Custody without child support from her.

My ending is that I'm living a retirement on 30k non taxable in a peaceful resort with no one unhappy with me. Living simply, cheaply and saving about $1k a month which I learned from Millionaire while sacrificing for my family. My only asset is my home in FL so it's hard to lose that. Keeping myself "judgement" proof so I'm not plucked like a ripe tomato again.

So yes, you can be a millionaire. Or, you can live modestly and be less of a target to lawyers and government. A millionaire these days is a fat target. A million dollars is not enough protection. A billion dollars would probably leave you with something.

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Indoor Triathlete - I thought I was right, until I realized I was wrong.

Its entirely up to you how you spend your own money, but don't you think that perhaps showing as much consideration to your own financial well being as you appear to do towards others might be worthwhile?

Do you really need to eat out with a three year old? or take out? do you have any idea how much money you hemorrhage?

A few more tidbits about us. We live near DC and cost of living can be high. We do give money each month towards church groups. Some of you might not understand, but that won't change. We give the majority of our money donations to compassion international. check them out. We also donate to a small local radio station 91.9 wgts.

I've given to a church and an orphanage most of my life and also will never give that up. No matter how little you think you save, you are still far better off than about 95% of the world's population, a good thing to keep in perspective.

We have a 3 yr old and that ties up some money, but we aren't afraid to fo to places like once upon a child for clothes. Our biggest problem is eating out. We definitely need to get better at it.


Young kids really makes saving tough and for most people, they only start saving once their children grow up. That's just part of life.

We don't have credit card debt. I guess we've been too lazy with our money and need to invest it better. Thanks.

Not having credit cards is probably the best thing you have done, it's a killer. It sounds to me like you just need to make sure you pay yourself each month. I remember early on thinking I can't save but managed to put $100/month away for 2 years. I invested it well and then could start increasing my savings but just starting helped develop a habit which I've never stopped. I set up an automatic transfer at the end of each month and it would go to an investment account. If I was running short of spending money, I simply waited until the next pay day but for over 20 years, I've continued that habit as a forced savings. If I earned more or got money (ie. a tax refund), it would go directly into the investment account. I didn't give up anything, I just forced myself to stop wasting money on little things.

3 year olds do tie up money, but at the same time they aren't teenagers. They don't care what they wear, don't eat a ton and toys are cheap. Our 2 year old wears 2nd hand clothes (unless gifted by grandma), eats basic meals and her favorite toys are either gifted, found at garage sales (we call it treasure hunting), or stupid things like a cardboard box.

Eating out is killer on the budget. We eat out (including lunch) maybe 2x a month. Eating out with young kids is stressful and then you learn the kid just eats french fries. Only time we go out is a date night (maybe once a month) or wife and I meet for lunch. 90% of the time wife and I bring leftovers for lunch, other 9% is peanut butter and jelly sandwiches.

It is really the little things that count. I know people who buy a coffee every day. If I buy a $2 coffee everyday 5 times a week 52 weeks a year, that is $520. If you make coffee at home that is maybe $100 a year tops. I used to go through a pair of work shoes every 2 years or so. Then I found if I keep my work shoes at my desk and wear sneakers in with my suit the shoes last over 2x as long (no snow/rain). I thought about upgrading my suits and work clothes but then realize I sit in an office and no one sees me so I don't need a $700 suit, a $200 one will fit. I'm coming to the point of just keeping one suit jacket in the office.

Finally for investing, bogleheads.org is by far your best friend. David Ramsey is good when it comes to getting your spending down.

Two kids under five

We eat out once per week. Fries are not an option in our house :) but it is a treat for our kids. They like it. Its good. Eating our is usually a brasserie or pizza and costs 60 bucks, we have a short window for their attention and we don't do tablets

You are 100% correct about coffees and I'd extend that to lunches, extra movie packages, new phones, cars etc

I interviewed this morning for a role in a location where you can't really do anything, eat out, drink, spend money and the guy made the point you can save a lot there

My point to him was I have two small kids. I can't really spend a lot anywhere

If two teachers in London UK were banking 70-80k combined. Mortgage is 8k interest only on 400k, repayment probably double. Even London that's livable