How much cash do you save each month?

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Topic Author
PNWpilot
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How much cash do you save each month?

Post by PNWpilot »

Spouse and I fully fund two Roth IRA's and two Traditional 401Ks. In total, we contribute 16% of our income to retirement accounts.

Emergency fund contains 6-months expenses (VMFXX). We cash flow all fixed, and variable, expenses with our biweekly paychecks.

Aside from retirement savings, we save a variable amount of cash each month. Depending on circumstances, this ranges from 0-30% of our monthly take-home pay. I sweep the leftover cash into a taxable account at the end of each month.

Question:
- Beyond retirement savings, what is an ideal percentage of take-home pay (cash) to be saved each month?

Edited to add: I feel like we are "overspending" when we don't save a huge chunk of cash each month. Is this a correct feeling?
Last edited by PNWpilot on Tue Jul 09, 2024 10:20 am, edited 1 time in total.
jebmke
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Re: How much cash do you save each month?

Post by jebmke »

There is no ideal. this is a very personal decision. Retired now but we abandoned cash when we were in our early 40s I think.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

jebmke wrote: Tue Jul 09, 2024 10:18 am There is no ideal. this is a very personal decision. Retired now but we abandoned cash when we were in our early 40s I think.
I appreciate the reply. When you say that you abandoned cash, do you mean that you sent all your money to retirement/taxable brokerage accounts and kept only small amounts in cash?
Normchad
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Re: How much cash do you save each month?

Post by Normchad »

I don’t have a good answer for you. I’m sure it’s personal. The more you make, the easier it is to save big money.

For us, we weren’t budgeters. We pledged to max out our workplace savings accounts and ROTHs, and just spend the rest on whatever we wanted. After mid career, we were lucky that our income grew to greatly outpace our desired spending. So we spent whatever we wanted to, and all the excess would up in savings. We didn’t track it, but for a couple of years it was six figures…..

For most people, if you max out the tax advantaged plans that are available to you, you are doing great. Crushing most people. I think it’s only around here that you find people even talking about savings outside of those plans. But if you can do it, good on you.

All the best!
Last edited by Normchad on Tue Jul 09, 2024 10:24 am, edited 1 time in total.
jebmke
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Re: How much cash do you save each month?

Post by jebmke »

PNWpilot wrote: Tue Jul 09, 2024 10:21 am
jebmke wrote: Tue Jul 09, 2024 10:18 am There is no ideal. this is a very personal decision. Retired now but we abandoned cash when we were in our early 40s I think.
I appreciate the reply. When you say that you abandoned cash, do you mean that you sent all your money to retirement/taxable brokerage accounts and kept only small amounts in cash?
yes; we stayed fully invested and only held a modest cash balance in checking to pay the bills. Been that way for 30 years now (whew!)
When you discover that you are riding a dead horse, the best strategy is to dismount.
millennial1995
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Re: How much cash do you save each month?

Post by millennial1995 »

After our emergency fund and various sinking funds like vacations, car/house maintenance it all gets invested. I would say cash maxes out at around $50k for us.
sailaway
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Re: How much cash do you save each month?

Post by sailaway »

You can only save a certain percentage each month if you are diligent about sinking funds. Otherwise, expenses tend to be lumpy across the year. I have spent anywhere from $4k to $11k across a calendar month so far this year.

Like you, taxable savings are just overflow. Befor downshifting, we would front load the 401/MBR, so we might have six months with no take home pay, then six months with excess.
RetireWhen
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Re: How much cash do you save each month?

Post by RetireWhen »

jebmke wrote: Tue Jul 09, 2024 10:18 am There is no ideal. this is a very personal decision. Retired now but we abandoned cash when we were in our early 40s I think.
The best answer, period. It is a very personal decision that depends on what one wants out of life.
zag00
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Re: How much cash do you save each month?

Post by zag00 »

i personally have a goal every year of maxing my 401k, (2) rIRA's, and $10k to taxable. The taxable contribution is not a strict number but something to strive for. Sometimes i hit it, sometimes i don't - all depends what the year holds. We're in the thick of high childcare costs for 3 kids (5, 3, and 3mo) so there's always the possibility of lumpy expenses.

I also save in a HYSA to cover a vehicle purchase and other deductibles which i have a $75k cap on. I average about ~$1k to this account per month.
Onlineid3089
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Re: How much cash do you save each month?

Post by Onlineid3089 »

We don't target additional taxable savings. Our contributions to the various tax advantaged accounts make up about 35% of our annual gross income. Extra cash does flow into VUSXX and occasionally over into VTSAX, but it's just what we happen to not spend.

We don't have a problem with 'overspending' as neither of us are inherently spenders. Not that we don't spend or buy some nice things, but it just isn't a big driver for us.
vanuber
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Re: How much cash do you save each month?

Post by vanuber »

PNWpilot wrote: Tue Jul 09, 2024 10:16 am Spouse and I fully fund two Roth IRA's and two Traditional 401Ks. In total, we contribute 16% of our income to retirement accounts.

Emergency fund contains 6-months expenses (VMFXX). We cash flow all fixed, and variable, expenses with our biweekly paychecks.

Aside from retirement savings, we save a variable amount of cash each month. Depending on circumstances, this ranges from 0-30% of our monthly take-home pay. I sweep the leftover cash into a taxable account at the end of each month.

Question:
- Beyond retirement savings, what is an ideal percentage of take-home pay (cash) to be saved each month?

Edited to add: I feel like we are "overspending" when we don't save a huge chunk of cash each month. Is this a correct feeling?
I'm not sure what this thread is about other than bragging about your savings and income. Sounds like you are maxing out retirement accounts and taking big swings at cash savings and taxable accounts, which is much easier with a large income ($60K/16% = $375K). At that level of income, you are overspending if not saving a large chunk. Saving 30% leaves you $262.5K to spend each year.

Our household income is about $130K and we hope to save 20% this year (though I will be happy if we reach 15%).
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

zag00 wrote: Tue Jul 09, 2024 10:45 am i personally have a goal every year of maxing my 401k, (2) rIRA's, and $10k to taxable. The taxable contribution is not a strict number but something to strive for. Sometimes i hit it, sometimes i don't - all depends what the year holds. We're in the thick of high childcare costs for 3 kids (5, 3, and 3mo) so there's always the possibility of lumpy expenses.

I also save in a HYSA to cover a vehicle purchase and other deductibles which i have a $75k cap on. I average about ~$1k to this account per month.
Based on your response, I think we're in similar situations. I have a goal, but frequently encounter lumpy costs. Healthcare has been a big one this year. It's also been unpredictable with bills still arriving months later.

Given that many of these lumpy costs are hard to plan for, I have no idea what the ideal goal would be.
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

vanuber wrote: Tue Jul 09, 2024 10:53 am
PNWpilot wrote: Tue Jul 09, 2024 10:16 am Spouse and I fully fund two Roth IRA's and two Traditional 401Ks. In total, we contribute 16% of our income to retirement accounts.

Emergency fund contains 6-months expenses (VMFXX). We cash flow all fixed, and variable, expenses with our biweekly paychecks.

Aside from retirement savings, we save a variable amount of cash each month. Depending on circumstances, this ranges from 0-30% of our monthly take-home pay. I sweep the leftover cash into a taxable account at the end of each month.

Question:
- Beyond retirement savings, what is an ideal percentage of take-home pay (cash) to be saved each month?

Edited to add: I feel like we are "overspending" when we don't save a huge chunk of cash each month. Is this a correct feeling?
I'm not sure what this thread is about other than bragging about your savings and income. Sounds like you are maxing out retirement accounts and taking big swings at cash savings and taxable accounts, which is much easier with a large income ($60K/16% = $375K). At that level of income, you are overspending if not saving a large chunk. Saving 30% leaves you $262.5K to spend each year.

Our household income is about $130K and we hope to save 20% this year (though I will be happy if we reach 15%).
No bragging intended. This is the "personal finance" section of an investing forum. Seems like the perfect place to ask a question about savings rates.

Best of luck to you with your savings goal this year.
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

RetireWhen wrote: Tue Jul 09, 2024 10:42 am
jebmke wrote: Tue Jul 09, 2024 10:18 am There is no ideal. this is a very personal decision. Retired now but we abandoned cash when we were in our early 40s I think.
The best answer, period. It is a very personal decision that depends on what one wants out of life.
I suspect you are correct, which is why there is very little info to be found on this subject. I guess its a compilation of past experiences and future expectations.
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Re: How much cash do you save each month?

Post by sailaway »

PNWpilot wrote: Tue Jul 09, 2024 11:01 am
zag00 wrote: Tue Jul 09, 2024 10:45 am i personally have a goal every year of maxing my 401k, (2) rIRA's, and $10k to taxable. The taxable contribution is not a strict number but something to strive for. Sometimes i hit it, sometimes i don't - all depends what the year holds. We're in the thick of high childcare costs for 3 kids (5, 3, and 3mo) so there's always the possibility of lumpy expenses.

I also save in a HYSA to cover a vehicle purchase and other deductibles which i have a $75k cap on. I average about ~$1k to this account per month.
Based on your response, I think we're in similar situations. I have a goal, but frequently encounter lumpy costs. Healthcare has been a big one this year. It's also been unpredictable with bills still arriving months later.

Given that many of these lumpy costs are hard to plan for, I have no idea what the ideal goal would be.
We also have lumpy income. Between RSUs and bonus, my partner has been known to receive 1/3 of their compensation in a two week period. Before downshifting, our stretch goal was to save the RSUs. Since downshifting, our goal is to live off RSUs and ESPP, at least until the last full time RSU grant vests. Salary barely funds the ESPP and 401k/MBR and tax withholdings.
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Re: How much cash do you save each month?

Post by steadyosmosis »

Like jebmke, I don't do cash because I dislike paying unnecessary taxes.
Less than 0.5% of portfolio in cash, and most of that cash in HSA as a requirement to avoid monthly account fees.
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KlangFool
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Re: How much cash do you save each month?

Post by KlangFool »

OP,

I believe in saving 1 year of expense every year. Aka, save as much as you spend.

The saving is automated by send the amount to be saved into the taxable brokerage, 401K, HSA from the paycheck.

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Re: How much cash do you save each month?

Post by PNWpilot »

steadyosmosis wrote: Tue Jul 09, 2024 11:11 am Like jebmke, I don't do cash because I dislike paying unnecessary taxes.
Less than 0.5% of portfolio in cash, and most of that cash in HSA as a requirement to avoid monthly account fees.

Do you utilize sinking funds? How do you pay for things like vacation, car repair, healthcare, etc.? Do you withdraw money from your brokerage account?
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

KlangFool wrote: Tue Jul 09, 2024 11:14 am OP,

I believe in saving 1 year of expense every year. Aka, save as much as you spend.

The saving is automated by send the amount to be saved into the taxable brokerage, 401K, HSA from the paycheck.

KlangFool
KlangFool,

This includes retirement savings, correct?
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Re: How much cash do you save each month?

Post by jebmke »

The thread is confusing because it seems to be a mix of "how much to save" and "holding cash." Those are two different objectives.
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Re: How much cash do you save each month?

Post by TomatoTomahto »

KlangFool wrote: Tue Jul 09, 2024 11:14 amI believe in saving 1 year of expense every year. Aka, save as much as you spend.
I assume there’s no penalty for saving more than you spend. :D Aside from taxes, which obviously are non-discretionary, at this stage of our financial life, it would be difficult/profligate to spend more than we do. But, next time we fly, it will be at the front of the plane :beer
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Re: How much cash do you save each month?

Post by muffins14 »

PNWpilot wrote: Tue Jul 09, 2024 10:16 am
Question:
- Beyond retirement savings, what is an ideal percentage of take-home pay (cash) to be saved each month?
Enough to meet your goals. What are your goals, and how much savings do you need to reach them at the time you want to reach them?
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SmileyFace
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Re: How much cash do you save each month?

Post by SmileyFace »

Are you saving for retirement outside your retirement tax advantaged accounts?
It wasn't clear to me.
You say "retirement accounts" in first para - and then "retirement savings" in your question. Are these equal for you or is the latter a superset of the former?
Last edited by SmileyFace on Tue Jul 09, 2024 11:39 am, edited 1 time in total.
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

jebmke wrote: Tue Jul 09, 2024 11:19 am The thread is confusing because it seems to be a mix of "how much to save" and "holding cash." Those are two different objectives.
Sorry for the confusion. I'm trying to get advice on how much "extra" I should save beyond retirement savings. I calculate this as leftover cash at the end of each month. I understand not many people have this type of leftover, but I'm curious if I should be aiming for a certain % of savings beyond retirement each month.
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Re: How much cash do you save each month?

Post by muffins14 »

PNWpilot wrote: Tue Jul 09, 2024 11:33 am
jebmke wrote: Tue Jul 09, 2024 11:19 am The thread is confusing because it seems to be a mix of "how much to save" and "holding cash." Those are two different objectives.
Sorry for the confusion. I'm trying to get advice on how much "extra" I should save beyond retirement savings. I calculate this as leftover cash at the end of each month. I understand not many people have this type of leftover, but I'm curious if I should be aiming for a certain % of savings beyond retirement each month.
The question is what does “retirement savings” mean to you?

Simply maxing out a 401k / IRA is not enough money for many people to retire, so a lot of the “left over cash” is indeed savings intended for retirement, it is just in a brokerage account rather than a 401k or IRA

I save about 15k monthly outside of retirement accounts. I plan to use it for retirement before age 55
Last edited by muffins14 on Tue Jul 09, 2024 11:39 am, edited 1 time in total.
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

muffins14 wrote: Tue Jul 09, 2024 11:27 am
PNWpilot wrote: Tue Jul 09, 2024 10:16 am
Question:
- Beyond retirement savings, what is an ideal percentage of take-home pay (cash) to be saved each month?
Enough to meet your goals. What are your goals, and how much savings do you need to reach them at the time you want to reach them?
This whole thread probably comes down to me having poorly defined goals. My current approach of "Save-as-much-as-you-can-every-month!!" is not a clear goal. Thanks for the insight.
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Re: How much cash do you save each month?

Post by jebmke »

PNWpilot wrote: Tue Jul 09, 2024 11:33 am
jebmke wrote: Tue Jul 09, 2024 11:19 am The thread is confusing because it seems to be a mix of "how much to save" and "holding cash." Those are two different objectives.
Sorry for the confusion. I'm trying to get advice on how much "extra" I should save beyond retirement savings. I calculate this as leftover cash at the end of each month. I understand not many people have this type of leftover, but I'm curious if I should be aiming for a certain % of savings beyond retirement each month.
OK; in that case, I will change my answer. What we did is identify up front buckets of income that went to investing. Everything else was fair game. Some of it went to retirement accounts but there was additional that went to our taxable investing.
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Re: How much cash do you save each month?

Post by PersonalFinanceJam »

PNWpilot wrote: Tue Jul 09, 2024 10:16 am ...
Question:
- Beyond retirement savings, what is an ideal percentage of take-home pay (cash) to be saved each month?

Edited to add: I feel like we are "overspending" when we don't save a huge chunk of cash each month. Is this a correct feeling?
As others have said I don't believe there is an ideal, there's only what is right for you. Your feeling of overspending when not having a large chunk of savings at the end of each month resonates with my younger self and was something I felt I needed to work on. I don't particularly think it's a correct feeling given your situation of apparently decently high income. I think it leads to too many what if scenarios which can make you miss out on life if you are not careful because you always need to have money saved at the end of the month for "something".

We set a decently high savings goal of about 30%. This pretty much automatically happens and goes in at a set asset allocation of the total portfolio so not necessarily cash. Bonus/RSU payouts mean there is a little manual effort here but not too much. We have sinking funds for what we consider the knowable lumpy expenses. This is pretty much the stuff that happens like clock work every year such as taxes and auto insurance payments. The reset is available for spending. We are natural savers which it sounds like you are too so there is always some slush available to pay for vacations and other random lumpy expenses. If we truly get in a bind with a truly large unexpected bill then we can go to the portfolio, but so far that hasn't happened.

I became a much more enjoyable person once I let go of the constant need to save more and could look at it and say it's all taken care of. The reset is available to enjoy.
cshell2
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Re: How much cash do you save each month?

Post by cshell2 »

Nothing. Maxing a 401K, IRA and family HSA with catch-up contributions is over 70% of my gross income. Then tack on 529 contributions....
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Re: How much cash do you save each month?

Post by OatmealAddict »

We usually end up with a little over $2K/month in budget excess AFTER maxing our 401ks and paying a bit extra on the mortgage. We use this to max our respective Roth IRAs and contribute to our son's 529 plan. Anything beyond that (which isn't much) goes toward house maintenance and a modest vacation.
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Re: How much cash do you save each month?

Post by mhc »

Similar to what muffins14 said.

Define your goals.
Create a plan to meet your goals.
Execute your plan.
Adjust goals and plans as needed.

The ideal amount to save is the amount to meet your goals. If you are successfully executing your plans, then there should be no wrong feelings about saving too much or too little. It is important to know where you are going.
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KlangFool
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Re: How much cash do you save each month?

Post by KlangFool »

PNWpilot wrote: Tue Jul 09, 2024 11:18 am
KlangFool wrote: Tue Jul 09, 2024 11:14 am OP,

I believe in saving 1 year of expense every year. Aka, save as much as you spend.

The saving is automated by send the amount to be saved into the taxable brokerage, 401K, HSA from the paycheck.

KlangFool
KlangFool,

This includes retirement savings, correct?
I do not have the concept of retirement savings. They are all part of my portfolio.

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Re: How much cash do you save each month?

Post by jebmke »

KlangFool wrote: Tue Jul 09, 2024 11:54 am
PNWpilot wrote: Tue Jul 09, 2024 11:18 am
KlangFool wrote: Tue Jul 09, 2024 11:14 am OP,

I believe in saving 1 year of expense every year. Aka, save as much as you spend.

The saving is automated by send the amount to be saved into the taxable brokerage, 401K, HSA from the paycheck.

KlangFool
KlangFool,

This includes retirement savings, correct?
I do not have the concept of retirement savings. They are all part of my portfolio.

KlangFool
agree; OP may mean tax-deferred savings vs. taxable though. Taxes aside, I also look at it as one blob.
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Re: How much cash do you save each month?

Post by Hacksawdave »

PNWpilot wrote: Tue Jul 09, 2024 10:16 am Aside from retirement savings, we save a variable amount of cash each month. Depending on circumstances, this ranges from 0-30% of our monthly take-home pay. I sweep the leftover cash into a taxable account at the end of each month.

Question:
- Beyond retirement savings, what is an ideal percentage of take-home pay (cash) to be saved each month?

Edited to add: I feel like we are "overspending" when we don't save a huge chunk of cash each month. Is this a correct feeling?
There is no ‘rule of thumb’ or ‘best practice’ to follow. It is all personal to the individual based upon needs and future plans. I can only relate why and what I did during my working tenure. You still have 20 years to get to even the earliest retirement in your industry.

For 37 of my over 38-year career, I always had a payroll deduction of $25-$75 each paycheck to the credit union. CUs are co-ops and mine helped out when I was young so I returned the favor to ensure other ‘youngsters’ would have the same opportunity. I made four withdrawals during the period for two car downpayments and two Roth IRAs. I still left with over $20K, and it remains today in my fifth year of retirement.

Before I started to stash extra cash, I created five monthly automatic investment plans every month into a Vanguard taxable account of S&P 500 stock index, STAR balanced, and the three CA municipal funds. These would increase every year in some shape or form, even in bad years.

In 2013 I figured to be between 7-10 years out from early retirement. Since I had already decided on a hybrid withdrawal plan, I knew extra cash would be needed. I decided to add $300 a check to another bank account for the duration of employment through splitting my direct deposit. Eventually all these automatic plans grew over time to over $3K a month above maxing out all retirement account options. If I had anything left, I could then sweep it into a municipal fund. I was able to do this specific bank account for about 6 years.

It all boils down to the individual and their future plans for the funds. I would suggest that it should be made as automated as possible so that the good intentions do not get neglected.
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

PersonalFinanceJam wrote: Tue Jul 09, 2024 11:40 am
PNWpilot wrote: Tue Jul 09, 2024 10:16 am ...
Question:
- Beyond retirement savings, what is an ideal percentage of take-home pay (cash) to be saved each month?

Edited to add: I feel like we are "overspending" when we don't save a huge chunk of cash each month. Is this a correct feeling?
As others have said I don't believe there is an ideal, there's only what is right for you. Your feeling of overspending when not having a large chunk of savings at the end of each month resonates with my younger self and was something I felt I needed to work on. I don't particularly think it's a correct feeling given your situation of apparently decently high income. I think it leads to too many what if scenarios which can make you miss out on life if you are not careful because you always need to have money saved at the end of the month for "something".

We set a decently high savings goal of about 30%. This pretty much automatically happens and goes in at a set asset allocation of the total portfolio so not necessarily cash. Bonus/RSU payouts mean there is a little manual effort here but not too much. We have sinking funds for what we consider the knowable lumpy expenses. This is pretty much the stuff that happens like clock work every year such as taxes and auto insurance payments. The reset is available for spending. We are natural savers which it sounds like you are too so there is always some slush available to pay for vacations and other random lumpy expenses. If we truly get in a bind with a truly large unexpected bill then we can go to the portfolio, but so far that hasn't happened.

I became a much more enjoyable person once I let go of the constant need to save more and could look at it and say it's all taken care of. The reset is available to enjoy.
I really appreciate the reply. It seems you understand my emotions entirely. I always have this nagging feeling to save for "something." I guess I need to clearly define our goals to better understand what that "something" may be.
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PNWpilot
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Re: How much cash do you save each month?

Post by PNWpilot »

KlangFool wrote: Tue Jul 09, 2024 11:54 am
PNWpilot wrote: Tue Jul 09, 2024 11:18 am
KlangFool wrote: Tue Jul 09, 2024 11:14 am OP,

I believe in saving 1 year of expense every year. Aka, save as much as you spend.

The saving is automated by send the amount to be saved into the taxable brokerage, 401K, HSA from the paycheck.

KlangFool
KlangFool,

This includes retirement savings, correct?
I do not have the concept of retirement savings. They are all part of my portfolio.

KlangFool
True. I am a long ways away from being able to access my tax-advantaged accounts. Therefore, I consider them as separate from other, more accessible, funds.
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climber2020
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Re: How much cash do you save each month?

Post by climber2020 »

PNWpilot wrote: Tue Jul 09, 2024 12:35 pm I always have this nagging feeling to save for "something." I guess I need to clearly define our goals to better understand what that "something" may be.
The "something" is flexibility. You don't necessarily need to save for a specific purpose other than having options later on in life.

I've always saved a large percentage of my income for no specific reason other than to do it. After having years and years of a relatively predictable adult life, this year I had an unexpected and very expensive life event, and having that big pile of money that I didn't spend buying trash made all the difference.
Dpmbball
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Re: How much cash do you save each month?

Post by Dpmbball »

I have between $6,500-$7,000 in disposable income each month…Just about all of it goes into the market and or my RE business
sailaway
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Re: How much cash do you save each month?

Post by sailaway »

climber2020 wrote: Tue Jul 09, 2024 12:44 pm
PNWpilot wrote: Tue Jul 09, 2024 12:35 pm I always have this nagging feeling to save for "something." I guess I need to clearly define our goals to better understand what that "something" may be.
The "something" is flexibility. You don't necessarily need to save for a specific purpose other than having options later on in life.

I've always saved a large percentage of my income for no specific reason other than to do it. After having years and years of a relatively predictable adult life, this year I had an unexpected and very expensive life event, and having that big pile of money that I didn't spend buying trash made all the difference.
I agree. We were able to supercharge savings as soon as we moved in together, as he moved into my condo, eliminating his housing expenses, our joint car insurance was less than he could get on his own as a single young man, etc, etc. At first, we claimed to have goals. Well, we found cheaper ways to meet those desires and eventually admitted our savings are for keeping our options open.
Ron Ronnerson
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Re: How much cash do you save each month?

Post by Ron Ronnerson »

Mine is probably not the most common of approaches so I thought I’d share for just that reason. We are burning through our cash on purpose.

I have a lot of tax-deferred space available ($100k/year) and I use much of it. By doing this, our taxable income drops significantly and we qualify for subsidies (typically worth $15k-$20k per year) on the health insurance exchange.

We use up part of our cash reserves each month in order to meet expenses, which includes lots of discretionary spending. So our cash balance goes down maybe $1k-$1.5k each month. We have a decent chunk of cash remaining due to a cash-out refinance done on our house in 2021 (borrowed at 2.3% for 30 years).

My wife and I are both 49 years old. I’m a public-school teacher and she’s a stay-at-home-parent (likely already retired as of age 43). Our net worth has increased from $0 to $2m over the past 15 years. Our retirement expenses should be fully covered by a six-figure pension plus social security. I see cash as a handy tool that can be utilized to help achieve goals.
KlangFool
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Re: How much cash do you save each month?

Post by KlangFool »

PNWpilot wrote: Tue Jul 09, 2024 12:36 pm
KlangFool wrote: Tue Jul 09, 2024 11:54 am
PNWpilot wrote: Tue Jul 09, 2024 11:18 am
KlangFool wrote: Tue Jul 09, 2024 11:14 am OP,

I believe in saving 1 year of expense every year. Aka, save as much as you spend.

The saving is automated by send the amount to be saved into the taxable brokerage, 401K, HSA from the paycheck.

KlangFool
KlangFool,

This includes retirement savings, correct?
I do not have the concept of retirement savings. They are all part of my portfolio.

KlangFool
True. I am a long ways away from being able to access my tax-advantaged accounts. Therefore, I consider them as separate from other, more accessible, funds.
I disagreed. You can access your Roth IRA's contribution at any time without tax and/or penalty.

KlangFool
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sailaway
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Re: How much cash do you save each month?

Post by sailaway »

PNWpilot wrote: Tue Jul 09, 2024 12:36 pm
KlangFool wrote: Tue Jul 09, 2024 11:54 am
PNWpilot wrote: Tue Jul 09, 2024 11:18 am
KlangFool wrote: Tue Jul 09, 2024 11:14 am OP,

I believe in saving 1 year of expense every year. Aka, save as much as you spend.

The saving is automated by send the amount to be saved into the taxable brokerage, 401K, HSA from the paycheck.

KlangFool
KlangFool,

This includes retirement savings, correct?
I do not have the concept of retirement savings. They are all part of my portfolio.

KlangFool
True. I am a long ways away from being able to access my tax-advantaged accounts. Therefore, I consider them as separate from other, more accessible, funds.
I have ready access to all of my Roth contributions and most of my conversions at this point. I can gain access to tax deferred accounts over time via the Roth conversion ladder. If this situation calls for it, there is also the option to set up SEPP.
PersonalFinanceJam
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Re: How much cash do you save each month?

Post by PersonalFinanceJam »

PNWpilot wrote: Tue Jul 09, 2024 12:35 pm I really appreciate the reply. It seems you understand my emotions entirely. I always have this nagging feeling to save for "something." I guess I need to clearly define our goals to better understand what that "something" may be.
I'd agree with setting some goals, but my advice is don't go overboard with things you don't actually know will happen or more importantly when. Example: I don't have a specific savings plan or fund for a new car. At one point I thought I needed this and would just plan to replace every 10 years. Long story short my current car is over 10 years old, it could be replaced but there is no need right now. I think your goals are a great way to help you back into an asset allocation and it's why I'm quite comfortable with my 70/30 mix. Much like Klang Fool, I just have a portfolio which is spread across different types of accounts.
maddogio
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Re: How much cash do you save each month?

Post by maddogio »

This is a timely question for us. As state employees, we have more tax advantaged space than we have income. This includes two defined contribution retirement plans, plus 403b and 457 for each of us, Roth IRAs, and HSA. So the advice to fill all available tax advantaged space before saving in taxable doesn't exactly work for us. We need to have some cash for cars, home repairs, vacations and the like. Right now, we save in tax advantaged retirement accounts 75 cents for every dollar we spend. We'll certainly have to back off on that when we cash flow our kids' college expenses. I've never really been confident that I'm saving (and holding) the right amount of cash.
sailaway
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Re: How much cash do you save each month?

Post by sailaway »

maddogio wrote: Tue Jul 09, 2024 3:27 pm This is a timely question for us. As state employees, we have more tax advantaged space than we have income. This includes two defined contribution retirement plans, plus 403b and 457 for each of us, Roth IRAs, and HSA. So the advice to fill all available tax advantaged space before saving in taxable doesn't exactly work for us. We need to have some cash for cars, home repairs, vacations and the like. Right now, we save in tax advantaged retirement accounts 75 cents for every dollar we spend. We'll certainly have to back off on that when we cash flow our kids' college expenses. I've never really been confident that I'm saving (and holding) the right amount of cash.
Do you count your Roth IRA contributions as available funds during this period?

I am confident we are never holding the right amount of cash. While I have access to other funds, we are currently holding less than one month of expenses between checking and HYSA, as we expect both ESPP and RSUs within the next six weeks.
rockstar
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Re: How much cash do you save each month?

Post by rockstar »

My expenses are lumpy each month, so it’s hard to put a number on it. What I do do is set a limit on my checking account and rebalance to my investment account when it crosses a threshold. For example, if my threshold is $10k, I’ll move anything above $10k into my brokerage each month. However, I might have a big purchase like furniture or appliances. If that’s the case, I might set the threshold to $15k or more. It really depends. But rebalancing from checking I found to be an easy way to think about it.
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TomatoTomahto
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Re: How much cash do you save each month?

Post by TomatoTomahto »

rockstar wrote: Tue Jul 09, 2024 3:45 pm My expenses are lumpy each month, so it’s hard to put a number on it. What I do do is set a limit on my checking account and rebalance to my investment account when it crosses a threshold. For example, if my threshold is $10k, I’ll move anything above $10k into my brokerage each month. However, I might have a big purchase like furniture or appliances. If that’s the case, I might set the threshold to $15k or more. It really depends. But rebalancing from checking I found to be an easy way to think about it.
We also have lumpy income and expenses. What I do is put large expenses in my calendar (our rent, property tax, main credit card, etc) and also large inflows (RSUs mostly, paychecks are pretty static amounts) so that I don’t send too much to brokerage. I can probably get Quicken to do this, but lazy. I could also probably get overdraft protection on our checking account; hmmmm.
I get the FI part but not the RE part of FIRE.
maddogio
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Re: How much cash do you save each month?

Post by maddogio »

sailaway wrote: Tue Jul 09, 2024 3:41 pm
maddogio wrote: Tue Jul 09, 2024 3:27 pm This is a timely question for us. As state employees, we have more tax advantaged space than we have income. This includes two defined contribution retirement plans, plus 403b and 457 for each of us, Roth IRAs, and HSA. So the advice to fill all available tax advantaged space before saving in taxable doesn't exactly work for us. We need to have some cash for cars, home repairs, vacations and the like. Right now, we save in tax advantaged retirement accounts 75 cents for every dollar we spend. We'll certainly have to back off on that when we cash flow our kids' college expenses. I've never really been confident that I'm saving (and holding) the right amount of cash.
Do you count your Roth IRA contributions as available funds during this period?
I consider those funds to be behind glass to be broken only in case of emergency, like job loss. I'd not use them to fund a vacation. It's hard for me to imagine using them to pay for educational expenses for the kids.
sailaway
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Re: How much cash do you save each month?

Post by sailaway »

maddogio wrote: Tue Jul 09, 2024 4:06 pm
sailaway wrote: Tue Jul 09, 2024 3:41 pm
maddogio wrote: Tue Jul 09, 2024 3:27 pm This is a timely question for us. As state employees, we have more tax advantaged space than we have income. This includes two defined contribution retirement plans, plus 403b and 457 for each of us, Roth IRAs, and HSA. So the advice to fill all available tax advantaged space before saving in taxable doesn't exactly work for us. We need to have some cash for cars, home repairs, vacations and the like. Right now, we save in tax advantaged retirement accounts 75 cents for every dollar we spend. We'll certainly have to back off on that when we cash flow our kids' college expenses. I've never really been confident that I'm saving (and holding) the right amount of cash.
Do you count your Roth IRA contributions as available funds during this period?
I consider those funds to be behind glass to be broken only in case of emergency, like job loss. I'd not use them to fund a vacation. It's hard for me to imagine using them to pay for educational expenses for the kids.
So you will give up tax sheltered space rather than using it efficiently?
maddogio
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Re: How much cash do you save each month?

Post by maddogio »

I'm not sure what you mean by this.
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