Can a <median household save 1 year of expenses every year?

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Glockenspiel
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Re: Can a <median household save 1 year of expenses every year?

Post by Glockenspiel » Tue May 15, 2018 10:27 am

enclee wrote:
Tue May 15, 2018 10:21 am
stoptothink wrote:
Tue May 15, 2018 9:58 am

FWIW, no I am not in grad school (already have a PhD) and my income is slightly north of 100k, as is my wife's (who is finishing her undergrad while working full-time).
You're doing great and I admire both you and your wife's work ethic, and financial responsibility but you missed the topic of the thread.
Yep. The main point is that for at least 1/2 of the entire country, this is nearly impossible without some special circumstance (living with disabled relatives, mortgage paid off, early in career living with roommates, very low cost of living area, etc).

Glockenspiel
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Re: Can a <median household save 1 year of expenses every year?

Post by Glockenspiel » Tue May 15, 2018 10:28 am

Glockenspiel wrote:
Tue May 15, 2018 10:27 am
enclee wrote:
Tue May 15, 2018 10:21 am
stoptothink wrote:
Tue May 15, 2018 9:58 am

FWIW, no I am not in grad school (already have a PhD) and my income is slightly north of 100k, as is my wife's (who is finishing her undergrad while working full-time).
You're doing great and I admire both you and your wife's work ethic, and financial responsibility but you missed the topic of the thread.
Yep. The main point is that for at least 1/2 of the entire country, this is nearly impossible without some special circumstance (living with disabled relatives, mortgage paid off, early in career living with roommates (though the roommates SHOULD count towards household income), very low cost of living area, etc).

getthatmarshmallow
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Re: Can a <median household save 1 year of expenses every year?

Post by getthatmarshmallow » Tue May 15, 2018 10:29 am

stoptothink wrote:
Tue May 15, 2018 9:58 am


Huh, I directly answered the question. I have done it myself, in fact more than doubled it for many years (read my previous response), and we could do it right now: easily. We choose not to. My wife is a type-A with major professional aspirations and we simply prefer being a two-income family. What we earn right now is irrelevant to the question because we choose a different lifestyle, and we save well over twice our annual expenses; doesn't change that we "can", which is the very question you originally posed.

FWIW, no I am not in grad school (already have a PhD) and my income is slightly north of 100k, as is my wife's (who is finishing her undergrad while working full-time). If my wife was just a SAHM (we have a 6 and 3yr old), and we changed literally nothing else (ie., still had the 15yr mortgage), our total household expenditures would have been about $24k last year. You do the math.
I agree that it's possible in your neck of the woods (which I believe is near mine, from what you've said about cheap unis), but I also think it's important to recognize that there's a difference between having expenses of about $40K + education per year with a +$200K income in an area where that means you make about three times the local average and having $24K per year in expenses when the ceiling is less than $60K (and the job benefits/perks are likely less) and where housing eats up a much greater percentage of the budget.

I mention this not to pooh-pooh you, but because of mine own story. A couple years ago our household income was $52K, and while we weren't saving a year of expenses, it was only because I was also cash-flowing my spouse's undergraduate education. Absent that it would have been pretty close. But we were in a position where we had a year and a half in an emergency fund, cheap tuition, no debt besides the mortgage, where work gave me ~15% in deferred compensation toward retirement plus decent benefits, and most importantly, our household income had been higher in the years previous to that. We didn't dip into savings at all, but we had the peace of mind of a large cushion. I don't want to downplay the good decisions we've made, but I also am wary of thinking that there wasn't quite a lot of fortune playing into what we've been able to do. (Maybe fortune favors the frugal? Hard to say.)

So I doubt our experience generalizes to anyone who is cobbling together $60K with two earners, especially in a higher cost of living area.

enclee
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Re: Can a <median household save 1 year of expenses every year?

Post by enclee » Tue May 15, 2018 10:32 am

stoptothink wrote:
Tue May 15, 2018 10:26 am
enclee wrote:
Tue May 15, 2018 10:21 am
stoptothink wrote:
Tue May 15, 2018 9:58 am

FWIW, no I am not in grad school (already have a PhD) and my income is slightly north of 100k, as is my wife's (who is finishing her undergrad while working full-time).
You're doing great and I admire both you and your wife's work ethic, and financial responsibility but you missed the topic of the thread.
:oops: The title of the thread is "Can a <median household save 1 year of expenses every year?" I very simply defined how my family could easily do it, with one change that we could make tomorrow (my wife becoming a SAHM, and changing literally nothing else). We choose not to. So, please explain how I missed the topic of the thread?
1) 59,000 is median household income for the US

2) You're not actively doing it, and what you stated is hypothetical.

Kudos to you though for setting your family up with security and prosperity regardless of income.

enclee
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Re: Can a <median household save 1 year of expenses every year?

Post by enclee » Tue May 15, 2018 10:36 am

Glockenspiel wrote:
Tue May 15, 2018 10:27 am
enclee wrote:
Tue May 15, 2018 10:21 am
stoptothink wrote:
Tue May 15, 2018 9:58 am

FWIW, no I am not in grad school (already have a PhD) and my income is slightly north of 100k, as is my wife's (who is finishing her undergrad while working full-time).
You're doing great and I admire both you and your wife's work ethic, and financial responsibility but you missed the topic of the thread.
Yep. The main point is that for at least 1/2 of the entire country, this is nearly impossible without some special circumstance (living with disabled relatives, mortgage paid off, early in career living with roommates, very low cost of living area, etc).
I think the two main areas that make it possible seem to be controlling housing costs and employer provided benefits.

MrBeaver
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Re: Can a <median household save 1 year of expenses every year?

Post by MrBeaver » Tue May 15, 2018 10:40 am

We are no longer in this situation, but we were not able to save 100% of expenses when we were.

I think the big unstated assumption that drives discussions like this into confusion is whether non-monthly or lumpy expenses count as 'savings' (toward emergency fund) or as regular expenses because you likely will spend the money at some point in the next several years.

Some (especially in the MMM crowd) may view money meant for non-monthly expenses as savings toward an emergency fund and then 'emergency' spending that doesn't count toward spending:
  • Car maintenance
  • Saving toward future car
  • Home maintenance
  • Medical expenses (trying not to use HSA money until later)
  • Future lumpy expenses (down payment for next house, future tech purchases phones etc., future vacations)
For reference, we spend as much in the above non-monthly 'lumpy' categories as we spend in monthly living expenses (with a paid-off house), and I count the sum of both of these plus charitable giving as our total expenses. With that definition, I save 50% and spend 50%. If I were to count the above items as 'savings' since it's not a monthly expense, my savings rate would be over 70% of my income. Magic!

To be fair, if you don't save anything for a replacement car and then need a replacement car, you will probably end up spending very little on one. I view this as time-forced-frugality: don't plan for known future expenses so that when they come you will have to be ultra-frugal assuming you are averse to debt. I also view this as risky.


For those who claim they are doing this as a grad student, I would suggest to be equitable you must include the in-kind discount of any provided or subsidized housing as expenses since that would be closer to what it would cost if you were to rent/buy on the open market.
Last edited by MrBeaver on Tue May 15, 2018 10:41 am, edited 1 time in total.

stoptothink
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Re: Can a <median household save 1 year of expenses every year?

Post by stoptothink » Tue May 15, 2018 10:40 am

enclee wrote:
Tue May 15, 2018 10:32 am
stoptothink wrote:
Tue May 15, 2018 10:26 am
enclee wrote:
Tue May 15, 2018 10:21 am
stoptothink wrote:
Tue May 15, 2018 9:58 am

FWIW, no I am not in grad school (already have a PhD) and my income is slightly north of 100k, as is my wife's (who is finishing her undergrad while working full-time).
You're doing great and I admire both you and your wife's work ethic, and financial responsibility but you missed the topic of the thread.
:oops: The title of the thread is "Can a <median household save 1 year of expenses every year?" I very simply defined how my family could easily do it, with one change that we could make tomorrow (my wife becoming a SAHM, and changing literally nothing else). We choose not to. So, please explain how I missed the topic of the thread?
1) 59,000 is median household income for the US

2) You're not actively doing it, and what you stated is hypothetical.

Kudos to you though for setting your family up with security and prosperity regardless of income.
Whether we choose to is totally different than whether we can. I stated exactly how we could easily do it, tomorrow, with one decision. Maybe a change in title is in order?

frugalmama
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Re: Can a <median household save 1 year of expenses every year?

Post by frugalmama » Tue May 15, 2018 10:41 am

We don't make less than 59...last year we came in about 10 more than that but we've come in that low as well before. We are a family of 12 so we are larger than average as well. I think we could do it if we didn't have as many kids as we have as we are currently on target to save between 20 to 25K this year and we still have a mortgage, etc. However, to get to our current savings rate we grow some of our food, reuse everything, constantly shop around for the lowest price for all food items purchased (pricebook and buying in bulk), do all our own repairs and rarely purchase anything new. Our big splurge every year is our vacation - we always drive and camp and then do the free/family pass things at the location. We consider tax implications in everything we do and are constantly looking for new ways to save, etc - credit card points, saving aluminium cans, etc.. The thing that really drives our living costs up are property taxes/insurance, healthcare, and kids' activities as public school activity fees/supplies, etc. are a huge part of our budget since we have so many kids. So, if we took out some of that and after we are done paying of the mortgage in the next 10 years (quite a large payment for us since we didn't move when we quit our high paying jobs) I think we would be able to save more as we essentially live like we did in college with cheap hobbies and haven't increased our standard of living very much except for our house purchase. We drive old cars and repair ourselves, etc. We are committed to paying for college educations for the kids so we have committed to living in this manner for the foreseeable future.

enclee
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Re: Can a <median household save 1 year of expenses every year?

Post by enclee » Tue May 15, 2018 10:43 am

stoptothink wrote:
Tue May 15, 2018 10:40 am
enclee wrote:
Tue May 15, 2018 10:32 am
stoptothink wrote:
Tue May 15, 2018 10:26 am
enclee wrote:
Tue May 15, 2018 10:21 am
stoptothink wrote:
Tue May 15, 2018 9:58 am

FWIW, no I am not in grad school (already have a PhD) and my income is slightly north of 100k, as is my wife's (who is finishing her undergrad while working full-time).
You're doing great and I admire both you and your wife's work ethic, and financial responsibility but you missed the topic of the thread.
:oops: The title of the thread is "Can a <median household save 1 year of expenses every year?" I very simply defined how my family could easily do it, with one change that we could make tomorrow (my wife becoming a SAHM, and changing literally nothing else). We choose not to. So, please explain how I missed the topic of the thread?
1) 59,000 is median household income for the US

2) You're not actively doing it, and what you stated is hypothetical.

Kudos to you though for setting your family up with security and prosperity regardless of income.
Whether we choose to is totally different than whether we can. I stated exactly how we could easily do it, tomorrow, with one decision. Maybe a change in title is in order?
We'll just agree to disagree on this issue, as you laid out multiple points (SAHM, no college expenses, 30 year refi, cutting back on child care, etc) you would do while still maintaining the current income level.

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triceratop
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Re: Can a <median household save 1 year of expenses every year?

Post by triceratop » Tue May 15, 2018 10:48 am

People whose stories about how they can/do save 1 year of expenses every year don't count for this thread:

1) Those who can, but don't, but list how they could.

2) Those who live with a roommate.

3) Those without a partner and those without kids

4) Those with few bills/responsibilities

I am sure that if someone else finds a 5th way to manage the OP's question they will be disqualified for some reason too. Is the reason to find out if this is possible or to prove that it is not possible for any true Scot?
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

enclee
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Re: Can a <median household save 1 year of expenses every year?

Post by enclee » Tue May 15, 2018 10:53 am

triceratop wrote:
Tue May 15, 2018 10:48 am
People whose stories about how they can/do save 1 year of expenses every year don't count for this thread:

1) Those who can, but don't, but list how they could.

2) Those who live with a roommate.

3) Those without a partner and those without kids

4) Those with few bills/responsibilities

I am sure that if someone else finds a 5th way to manage the OP's question they will be disqualified for some reason too. Is the reason to find out if this is possible or to prove that it is not possible for any true Scot?
I think the point is that if you're younger and actually responsible, it's very much in reach as a goal. I don't think you're situation is that uncommon among graduate students.

You have to remember this isn't a discussion of being able to just make a comfortable life, it's about the level of difficulty/attainability of achieving a savings rate equal to expenses.

Introducing a partner, adds a whole new layer of financial behavior including wants and needs. There are choices that you're comfortable that a partner wouldn't want to deal with and vice versa.

Absolutely, keeping bills and responsibilities to a minimum is the key to the equation. It's the benefit of being younger and more flexible to roommate and living arrangements.

I don't really see anyone being discounted for their own experiences, just acknowledging that controlling a couple key expenses to a budget makes the difference.
Last edited by enclee on Tue May 15, 2018 11:17 am, edited 2 times in total.

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HomerJ
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Re: Can a <median household save 1 year of expenses every year?

Post by HomerJ » Tue May 15, 2018 10:59 am

Glockenspiel wrote:
Mon May 14, 2018 3:58 pm
Is there anyone here, in this forum, that lives in a household making less than $59,000 gross income per year that saves as much money as they spend, every year?
It's certainly possible, but not really necessary.

Work on getting the house paid off over 30 years, and SS alone would cover a large percentage of your expenses in retirement.

You don't need to save 25x or 30x your current expenses, just 25x or 30x your left-over expenses after SS, and no house payment.
The J stands for Jay

NotWhoYouThink
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Re: Can a <median household save 1 year of expenses every year?

Post by NotWhoYouThink » Tue May 15, 2018 11:17 am

Yes, some households with less than median income can save a year of current expenses every year, as many above have described.

But it is by no means a necessary condition to reach financial independence. We have been well above median all of our married life. During most of those years we spent more than we saved. During some of those years we got big bonuses which went straight to the investment accounts and so those years we saved more than we spent. In all years we saved 20% or more of gross income. We have 401ks and taxable accounts and had 529s until the kids finished college.

There are many paths to financial independence. Choose your own. One poster on this forum recommends saving a year of expenses every year, other posters have other advice that has worked for them. Real estate, for instance. Climbing the corporate ladder. Running up 6 figure college loans getting a medical degree and then earning 6-7 digit income for a couple of decades. Marrying a person with rich and very old parents. Saving 15-20% a year for a few decades, and investing it wisely. Lots and lots and lots of ways.
Last edited by NotWhoYouThink on Tue May 15, 2018 11:46 am, edited 1 time in total.

terran
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Re: Can a <median household save 1 year of expenses every year?

Post by terran » Tue May 15, 2018 11:36 am

Glockenspiel wrote:
Mon May 14, 2018 3:58 pm
Is there anyone here, in this forum, that lives in a household making less than $59,000 gross income per year that saves as much money as they spend, every year?
We both make and spend more than this, but by basing this on our actual situation and eliminating some of our extravagances I'll take a crack at this.

Assumptions:
>$59k will pay gross income
> $4,056.80 FICA after HSA deduction (see below)
>6% = $3540 401k/403b match

Resulting in and annual save/spend of (59000 - 4,056.80 + 3450)/2 = $29,196.60, or $2,433.05/month

Now lets look at their payroll deducted expenses:
> $170.20 family HSA Eligible HDHP (comes with $930/year employer contribution to HSA)
> $43.54 family dental insurance
> $17.01 vision insurance
> $38.84 short term disability (we self insure for this, but just for arguments sake I've included it)
> $16.64 long term disability
> Total payroll deducted expenses = $286.23 ($230.75 of which reduce taxable income)

So we now have $2,146.82 to spend.

$900 rent (2 bedroom apartment)
$488 Groceries (we spend $75/week for 2 people, so this is 1.5x that to account for a kid or maybe 2)
$44 household goods, like cleaning supplies, toiletries, etc ($10/week -- we never seem to hit this)
$22 Cell phones (2 phones on Ting)
$45 Electric (all electric, warm climate, little A/C used, a bit of heat in the winter)
$40 Internet
$55 water and trash
$50 clothing
$14 haircuts (for my wife, I do my own, so lets say our fictional kid is a boy)
$11 Renters insurance
$26 Employer subsidized gym membership
$50 healthcare (twice our actual average, and this doesn't account for the $930 employer HSA contribution)
$30 Life insurance ($1million 20 year term on the primary bread winner)
= 1775 Core expenses

A few extravagances
$9 netflix
$100 Gifts (we budget less than this, but if we had a kid this might be more realistic)
$100 Family visits (travel to see family once a year plus other family on occasion, so we might need to change the frequency if we had a kid)
$85 going out (more than we actually spend)
$25 Electronics replacement (we save twice this but have two fancy/mac laptops, an iPad, and two iPhones).
= $2094, leaving $52.82 to spare

Notable exceptions:
> We do have a car, but we walk to work and could walk, bike or take public transit to get groceries, so I've excluded car maintenance, insurance and replacement from this.
> I've excluded travel which we spend a lot on. That's a luxury and we know it.
> I'm sure that those with kids will have all kinds of problems with this budget, which is totally fair. I don't know what it's like. I will say that despite what I've removed there's still a lot of fat that could be trimmed from this budget. That could get us through some expensive extras. I realize I'm saying this from my childfree ivory tower, but I also think a lot of the efficiencies we find to apply to ourselves could also be extended to kids (hand-me-downs/second hand items, trading child care, free entertainment at/from the library, making things from scratch, etc).
> If we both had to work to hit this median income, we'd need to pay for day care for a time, which could really derail this plan, so I think we have to say this is a single income household.
> While I've seen better, the employer benefits here are pretty good, so if you had worse benefits you might be in trouble.
> I haven't accounted for state income tax, so I'm effectively assuming they live in a no tax state. I tried a few states and you're probably looking at $100-150/month at this level of income.

Now to the savings:
$3450 Employer match
$5970 HSA (plus $930 from the employer)
$12261 traditional 401k/403b
7,515.60 Roth IRA and or 401k/403b
= $29,196.60 saving

I didn't include the employer HSA contribution in the total savings figure, so you can decide if that should be considered savings or used to boost what some might consider low healthcare spending.

Now, federal tax:
$59000 income
- $2,769 payroll deducted expenses that reduce income
- $5970 HSA contribution
- $12261 traditional 401k/403b
= $38000 AGI
- $24000 standard deduction
= $14000 taxable income
= $1400 tax
- $2000 Savers tax credit (non refundable)
= $0 federal income tax

So we'd have to eliminate some of the spending we value (although not really as much as I thought, mostly the travel), but I think it would definitely be doable to save as much as you spend on a median income. Definitely not as easy as it is for us to save (more than) what we spend, but also not impossible. If you start lowering the income below median, then yeah, that's going to get pretty tough if you're talking about someone with kids and/or don't want to see them making some real lifestyle sacrifices. I think that's ok though. Saving as much as you spend is a huge accomplishment, so like any huge accomplishment I think it's alright that it requires you to do unconventional things.

winterfan
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Re: Can a <median household save 1 year of expenses every year?

Post by winterfan » Tue May 15, 2018 11:47 am

frugalmama wrote:
Tue May 15, 2018 10:41 am
We don't make less than 59...last year we came in about 10 more than that but we've come in that low as well before. We are a family of 12 so we are larger than average as well. I think we could do it if we didn't have as many kids as we have as we are currently on target to save between 20 to 25K this year and we still have a mortgage, etc. However, to get to our current savings rate we grow some of our food, reuse everything, constantly shop around for the lowest price for all food items purchased (pricebook and buying in bulk), do all our own repairs and rarely purchase anything new. Our big splurge every year is our vacation - we always drive and camp and then do the free/family pass things at the location. We consider tax implications in everything we do and are constantly looking for new ways to save, etc - credit card points, saving aluminium cans, etc.. The thing that really drives our living costs up are property taxes/insurance, healthcare, and kids' activities as public school activity fees/supplies, etc. are a huge part of our budget since we have so many kids. So, if we took out some of that and after we are done paying of the mortgage in the next 10 years (quite a large payment for us since we didn't move when we quit our high paying jobs) I think we would be able to save more as we essentially live like we did in college with cheap hobbies and haven't increased our standard of living very much except for our house purchase. We drive old cars and repair ourselves, etc. We are committed to paying for college educations for the kids so we have committed to living in this manner for the foreseeable future.
That's really great! I love reading stories about larger families and how they save. I grew up in a large family and in some ways it was easier. We only have one child and I think we pay a lot for social opportunities (i.e. activities, lessons, camps, etc.). I think we should be saving more. We saved a lot years ago, but we haven't been banking the majority of our salary increases. We are only a family of three and my husband makes more now than he ever did. Scope creep is real, lol. I find that we go out to eat more now that our child is older. I never wanted to out to eat or vacation much with a young one. I thought it was more hassle than it was worth.

enclee
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Re: Can a <median household save 1 year of expenses every year?

Post by enclee » Tue May 15, 2018 11:56 am

There are so many things I could learn from you terran (Edited: Thank you, Winterfan), I don't know where to begin.

1) How did you get your cell phone bill so low?
2) Also, you're electric bill is low, but I found out I can actually shop for electric providers here in Central Texas. So, next year I can get my cost down.
3) Only $14 for haircuts for 2 people? I couldn't find one that cheap even on a military base, where they get you in and out in under 5 minutes.

Could you explain the savings portion, I understand where you got the employer match is from for the 401k and the HSA.

What are payroll deducted expenses and how do those drop your AGI?
Last edited by enclee on Tue May 15, 2018 12:20 pm, edited 1 time in total.

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Smorgasbord
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Re: Can a <median household save 1 year of expenses every year?

Post by Smorgasbord » Tue May 15, 2018 12:01 pm

chevca wrote:
Mon May 14, 2018 7:24 pm
To those talking about grad school days and to Triceratop... could you pull that off with a family and all involved there? That's what I think of when the median household is talked about. Not single folks with little responsibilities and minimal bills.
If we are limiting households to just families with multiple people, the median income numbers need to also be adjusted. Based on the data from the census bureau, the median household income among 4-person households is close to $80,000 a year.
https://www.census.gov/data/tables/time ... erson.html
https://www.justice.gov/ust/eo/bapcpa/2 ... _table.htm

chevca
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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 12:03 pm

stoptothink wrote:
Tue May 15, 2018 9:58 am
chevca wrote:
Tue May 15, 2018 9:41 am
stoptothink wrote:
Tue May 15, 2018 9:33 am
chevca wrote:
Mon May 14, 2018 7:24 pm
To those talking about grad school days and to Triceratop... could you pull that off with a family and all involved there? That's what I think of when the median household is talked about. Not single folks with little responsibilities and minimal bills.
If my wife was willing to stay home and not continue with her education: absolutely. For a single data point, last year our total household expenditures for a household of 4 was <$45k. This included paying $1500/month in childcare, cash flowing wife's full-time college education, and a 15yr mortgage. Without childcare, tuition and associated costs, and possibly refinancing to a 30yr mortgage we could easily get household expenses <$25k/yr. Cut out a few activities for my kids and I think we could do <$20k. We're not going to do it, but we absolutely could. That's the freedom not buying more home than we needed and designing our life around not being dependent on cars has afforded us.
Okay, that's great. But, you didn't mention if you are in grad school, didn't list your income, and only laid out ways to cut expenses. I'm not sure what you feel you answered there?
Huh, I directly answered the question. I have done it myself, in fact more than doubled it for many years (read my previous response), and we could do it right now: easily. We choose not to. My wife is a type-A with major professional aspirations and we simply prefer being a two-income family. What we earn right now is irrelevant to the question because we choose a different lifestyle, and we save well over twice our annual expenses; doesn't change that we "can", which is the very question you originally posed.

FWIW, no I am not in grad school (already have a PhD) and my income is slightly north of 100k, as is my wife's (who is finishing her undergrad while working full-time). If my wife was just a SAHM (we have a 6 and 3yr old), and we changed literally nothing else (ie., still had the 15yr mortgage), our total household expenditures would have been about $24k last year. You do the math.
Umm, you currently don't fit the model of the point of this thread. So again, I don't know what you feel you're answering about your current situation and how you could cut expenses. Congrats to you for what you could do. But, it has nothing to do with the thread topic.

You responded to my post about grad students with your current situation and what you could do... not your grad student days. What was your point?

chevca
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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 12:05 pm

Smorgasbord wrote:
Tue May 15, 2018 12:01 pm
chevca wrote:
Mon May 14, 2018 7:24 pm
To those talking about grad school days and to Triceratop... could you pull that off with a family and all involved there? That's what I think of when the median household is talked about. Not single folks with little responsibilities and minimal bills.
If we are limiting households to just families with multiple people, the median income numbers need to also be adjusted. Based on the data from the census bureau, the median household income among 4-person households is close to $80,000 a year.
https://www.census.gov/data/tables/time ... erson.html
https://www.justice.gov/ust/eo/bapcpa/2 ... _table.htm
I didn't meant to "limit" it to multiple people households. There are single folks living alone and making six figures or more as well, right?

How about established households... not grad students living on a cot and eating Ramen in someone's basement? :happy

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Re: Can a <median household save 1 year of expenses every year?

Post by winterfan » Tue May 15, 2018 12:18 pm

enclee wrote:
Tue May 15, 2018 11:56 am
There are so many things I could learn from you winterfan, I don't know where to begin.

1) How did you get your cell phone bill so low?
2) Also, you're electric bill is low, but I found out I can actually shop for electric providers here in Central Texas. So, next year I can get my cost down.
3) Only $14 for haircuts for 2 people? I couldn't find one that cheap even on a military base, where they get you in and out in under 5 minutes.

Could you explain the savings portion, I understand where you got the employer match is from for the 401k and the HSA.

What are payroll deducted expenses and how do those drop your AGI?
LOL I think you meant terran, not me. I spend a ridiculous amount on my hair. It's the one thing that is really hard to cut back on. I used to go to those cheapo places too, but once I started getting gray, I started having my hair highlighted and cut by the same stylist. It costs $125 every 10 weeks. Yikes. What's hard is that my hair has never looked better! I finally have a great haircut and no more bad hair days. That's one thing that would be really hard to cut out.

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Re: Can a <median household save 1 year of expenses every year?

Post by Smorgasbord » Tue May 15, 2018 12:19 pm

chevca wrote:
Tue May 15, 2018 12:05 pm
I didn't meant to "limit" it to multiple people households. There are single folks living alone and making six figures or more as well, right?
How about established households... not grad students living on a cot and eating Ramen in someone's basement? :happy
Sure, there are single people making millions, but the median income number thrown out by Glockenspiel includes all households. My main point is that if we start excluding those that make up the low end of the income we need to also adjust the median income number in this exercise. Except for in Arkansas and Mississippi, a family of four with a household income of $59,000 is going to be far below the median income for that area.

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Re: Can a <median household save 1 year of expenses every year?

Post by enclee » Tue May 15, 2018 12:20 pm

winterfan wrote:
Tue May 15, 2018 12:18 pm
enclee wrote:
Tue May 15, 2018 11:56 am
There are so many things I could learn from you winterfan, I don't know where to begin.

1) How did you get your cell phone bill so low?
2) Also, you're electric bill is low, but I found out I can actually shop for electric providers here in Central Texas. So, next year I can get my cost down.
3) Only $14 for haircuts for 2 people? I couldn't find one that cheap even on a military base, where they get you in and out in under 5 minutes.

Could you explain the savings portion, I understand where you got the employer match is from for the 401k and the HSA.

What are payroll deducted expenses and how do those drop your AGI?
LOL I think you meant terran, not me. I spend a ridiculous amount on my hair. It's the one thing that is really hard to cut back on. I used to go to those cheapo places too, but once I started getting gray, I started having my hair highlighted and cut by the same stylist. It costs $125 every 10 weeks. Yikes. What's hard is that my hair has never looked better! I finally have a great haircut and no more bad hair days. That's one thing that would be really hard to cut out.
Haha, thanks for pointing that out!

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 12:22 pm

Smorgasbord wrote:
Tue May 15, 2018 12:19 pm
chevca wrote:
Tue May 15, 2018 12:05 pm
I didn't meant to "limit" it to multiple people households. There are single folks living alone and making six figures or more as well, right?
How about established households... not grad students living on a cot and eating Ramen in someone's basement? :happy
Sure, there are single people making millions, but the median income number thrown out by Glockenspiel includes all households. My main point is that if we start excluding those that make up the low end of the income we need to also adjust the median income number in this exercise. Except for in Arkansas and Mississippi, a family of four with a household income of $59,000 is going to be far below the median income for that area.
I'm not even excluding grad students. But, claiming they are a household when they live in mom's basement simply isn't true and it shouldn't be bragged about how they save so much. They are a part of that household, but not thee household. So, the numbers for some examples brought up aren't true a a household.
Last edited by chevca on Tue May 15, 2018 12:24 pm, edited 1 time in total.

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Re: Can a <median household save 1 year of expenses every year?

Post by metrunt » Tue May 15, 2018 12:27 pm

triceratop wrote:
Tue May 15, 2018 10:48 am
People whose stories about how they can/do save 1 year of expenses every year don't count for this thread:
Pull over, the thread police has arrived!

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Re: Can a <median household save 1 year of expenses every year?

Post by HomerJ » Tue May 15, 2018 12:29 pm

stoptothink wrote:
Tue May 15, 2018 9:33 am
Without childcare, tuition and associated costs, and possibly refinancing to a 30yr mortgage we could easily get household expenses <$25k/yr.
I'm a guy who has stated before that it's not that hard to retire well with low expenses. But I assume a LCOL area, a paid-off house, and no kids. I mean, food and utilities just don't cost that much.

But I really cannot imagine living on $2000 a month with a mortgage (even if small) and a kid. You have to figure in occasional house repairs and unexpected expenses. A new roof or a new air conditioner absolutely destroys your budget if you are living on $2000 a month.

I mean one can do it for a year or two, but after 10-15 years, I'd imagine it would get tiring living like a student.

And do you ever travel anywhere? All family is close by, I guess?
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Re: Can a <median household save 1 year of expenses every year?

Post by David Jay » Tue May 15, 2018 12:33 pm

triceratop wrote:
Tue May 15, 2018 10:48 am
...not possible for any true Scot?
well played...
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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 12:54 pm

triceratop wrote:
Tue May 15, 2018 10:48 am
People whose stories about how they can/do save 1 year of expenses every year don't count for this thread:

1) Those who can, but don't, but list how they could.

2) Those who live with a roommate.

3) Those without a partner and those without kids

4) Those with few bills/responsibilities

I am sure that if someone else finds a 5th way to manage the OP's question they will be disqualified for some reason too. Is the reason to find out if this is possible or to prove that it is not possible for any true Scot?
A much easier way would just be to follow the qualifications.... actually count everyone in the household and make < the median income.. combined. Then tell us about savings rates... combined again. I.E. you have/had a roommate... what was the combined income, expenses, and savings rate. Then we're talking about a household.

For all we know, your roommate make $150k/year, pays most of the rent, you pay a little, and never leave your room? :happy I kid...

Many of you folks being "disqualified" are talking about individual expense/savings rates, while being a part of a household. You are not a household unless you live by yourself. And, if you do that, you probably make plenty of money. See....

Or, some talk about making over $100k/year and how if they cut expenses to the bare bones they could save what they spend each year to fit the thread topic... :confused

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Re: Can a <median household save 1 year of expenses every year?

Post by alfaspider » Tue May 15, 2018 1:00 pm

Of course it's possible. The question is whether the household is willing to cut spending far below the median to get there. Depending on one's location, that may involve sacrifices few are willing to make.

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Re: Can a <median household save 1 year of expenses every year?

Post by triceratop » Tue May 15, 2018 1:14 pm

chevca wrote:
Tue May 15, 2018 12:54 pm
triceratop wrote:
Tue May 15, 2018 10:48 am
People whose stories about how they can/do save 1 year of expenses every year don't count for this thread:

1) Those who can, but don't, but list how they could.

2) Those who live with a roommate.

3) Those without a partner and those without kids

4) Those with few bills/responsibilities

I am sure that if someone else finds a 5th way to manage the OP's question they will be disqualified for some reason too. Is the reason to find out if this is possible or to prove that it is not possible for any true Scot?
A much easier way would just be to follow the qualifications.... actually count everyone in the household and make < the median income.. combined. Then tell us about savings rates... combined again. I.E. you have/had a roommate... what was the combined income, expenses, and savings rate. Then we're talking about a household.

For all we know, your roommate make $150k/year, pays most of the rent, you pay a little, and never leave your room? :happy I kid...

Many of you folks being "disqualified" are talking about individual expense/savings rates, while being a part of a household. You are not a household unless you live by yourself. And, if you do that, you probably make plenty of money. See....

Or, some talk about making over $100k/year and how if they cut expenses to the bare bones they could save what they spend each year to fit the thread topic... :confused
"You are not a household unless you live by yourself."

The IRS disagrees about your definition of a household. And, the survey methodologies are not consistent with your definition.

FYI, my roommate makes less than I do.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 1:35 pm

Maybe you would care to share a link or at least the definitions you speak of?

And, combined are you under or over the median income level?

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Re: Can a <median household save 1 year of expenses every year?

Post by zuzimb » Tue May 15, 2018 1:40 pm

chevca wrote:
Tue May 15, 2018 12:54 pm

A much easier way would just be to follow the qualifications.... actually count everyone in the household and make < the median income.. combined. Then tell us about savings rates... combined again. I.E. you have/had a roommate... what was the combined income, expenses, and savings rate. Then we're talking about a household.

For all we know, your roommate make $150k/year, pays most of the rent, you pay a little, and never leave your room? :happy I kid...

Many of you folks being "disqualified" are talking about individual expense/savings rates, while being a part of a household. You are not a household unless you live by yourself. And, if you do that, you probably make plenty of money. See....

Or, some talk about making over $100k/year and how if they cut expenses to the bare bones they could save what they spend each year to fit the thread topic... :confused
I'm probably disqualified, but I'll comment anyways.

Currently earn ~48k gross
Current spend - 29% of gross (calced using mint tracking for past 16 months and adding back in car depreciation)
Caveats - Live at parents, split some food expenses with GF (her earnings would put us right at median).

If I were to move out into my own place spending would look something like
Basic decent 1 BR apartment near work- 45%
1 BR Apartment with amenities (gym,pool,dog park, ect.) - 50%
Above with roommate - 39%

Reduced car depreciation wasn't factored into the second scenario. Reduced tolls/gas were factored into the numbers however.

I could cut back in at least 3 different areas, of course doing so and saying it are two different things. Vacation and pet spending are relatively easy to cut back on, and are the largest spending categories after gas/food.

I could move out and still hit my savings goal, but I choose to sacrifice in that area so I can easily do it and still have an insane (imo for income) amount of spending in other areas. So I make the choice to stay home save more and spend more on things I wouldn't otherwise be able to do.
Moving out will involve a roommate of some sort, if everything is split 50/50 then what's it matter what their saving rate/income is? Even so I could go solo and still hit the 50% mark, though just barely with current spending.

It's possible, but it's all about choices. Things will have to give to be able to save at that rate at such an income. I choose to give up the freedom and autonomy that living alone gives. Along with a cheap car, and very little spending outside of those areas I really care about.

**Edit: I didn't really factor in taxes with the initial calculations. So that would probably skew things to a lower savings rate.

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 1:51 pm

Yep, disqualified. Can I be the judge in this thread? :happy

You didn't say what your savings rate is anywhere in there, zuz. That would be nice to add.

It doesn't matter if roommates split everything 50/50 and one wants to calculate their own savings to expense ratio. But, if they want to chime in on this particular thread topic, they should include all income/expenses/savings, IMO. That is what the thread is asking after all. It's not asking how one can save an equal amount to their yearly expenses by whatever means necessary.

I don't think the OP asked that complicated a question. But, leave it to Bogleheads to make it so complicated. :happy

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Re: Can a <median household save 1 year of expenses every year?

Post by triceratop » Tue May 15, 2018 1:56 pm

chevca wrote:
Tue May 15, 2018 1:35 pm
Maybe you would care to share a link or at least the definitions you speak of?

And, combined are you under or over the median income level?
The IRS considers someone single if one is considered unmarried and does not qualify for any other status.

Yes combined we are over the median income level for individuals (but not households which as stated above is about $80k), but who cares about our combined income? Having a roommate is a way for a <median household to save 1 year of expenses. Objections to that method is what I was referring to above by "no true scot".
metrunt wrote:
Tue May 15, 2018 12:27 pm
triceratop wrote:
Tue May 15, 2018 10:48 am
People whose stories about how they can/do save 1 year of expenses every year don't count for this thread:
Pull over, the thread police has arrived!
Some of my posts must be read with a heavy helping of satire. ;)
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Can a <median household save 1 year of expenses every year?

Post by MrBeaver » Tue May 15, 2018 1:57 pm

terran wrote:
Tue May 15, 2018 11:36 am

$900 rent (2 bedroom apartment)

Notable exceptions:
> We do have a car, but we walk to work and could walk, bike or take public transit to get groceries, so I've excluded car maintenance, insurance and replacement from this.
> I haven't accounted for state income tax, so I'm effectively assuming they live in a no tax state. I tried a few states and you're probably looking at $100-150/month at this level of income.
Where is this mythical LCOL area where one can rent a two bedroom apartment for $900 a month, get groceries, monthly needs, and travel to necessary appointments on public transit or walk/bike, and within a state that has no state income tax? Seriously, I'd love a list of such places if anyone has one.

It sounds like a dream come true for a destination retirement even though I'm still many years away from that.

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Re: Can a <median household save 1 year of expenses every year?

Post by randomguy » Tue May 15, 2018 1:59 pm

Lots of people raise families on 20-25k/year so it is doable. How many of them would choose to do that versus living on say 35k? Not many.

I know when I started out as a single guy I was close. Making 60k, living on 24k, and saving the rest. I was cheating in the sense I had a paid off car, 0 dollar health insurance and so on. Did that for like 4 years. Expenses except rent stayed the same while the salary went to 110k. Savings rate went up a lot

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 2:05 pm

triceratop wrote:
Tue May 15, 2018 1:56 pm
chevca wrote:
Tue May 15, 2018 1:35 pm
Maybe you would care to share a link or at least the definitions you speak of?

And, combined are you under or over the median income level?
The IRS considers someone single if one is considered unmarried and does not qualify for any other status.

Yes combined we are over the median income level for individuals (but not households which as stated above is about $80k), but who cares about our combined income? Having a roommate is a way for a <median household to save 1 year of expenses. Objections to that method is what I was referring to above by "no true scot".
So, the median of %59k/year brought up by the OP referred to whom... just single people living alone?

And, just because I was curious and you didn't answer...

https://www.census.gov/programs-surveys ... #household

The census definition jives pretty well with my thinking of what a household is. What did you find that is so different?

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Re: Can a <median household save 1 year of expenses every year?

Post by triceratop » Tue May 15, 2018 2:12 pm

I quoted the IRS for defining a single person. I don't disagree with the census definition, it's a fine definition for a household. I do find your reasoning for dismissing a valid way to meet the OP's question to be utterly bizarre. Since our finances are separate it's inappropriate to combined our incomes. It is simultaneously true that many people are unwilling to live with a roommate. That's fine too.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 2:14 pm

triceratop wrote:
Tue May 15, 2018 1:14 pm
And, the survey methodologies are not consistent with your definition.
Hmm, that's funny. :wink:

And, I never asked for the IRS definition of single. That has little to do with this topic.
Last edited by chevca on Tue May 15, 2018 2:15 pm, edited 1 time in total.

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Re: Can a <median household save 1 year of expenses every year?

Post by triceratop » Tue May 15, 2018 2:15 pm

chevca wrote:
Tue May 15, 2018 2:14 pm
triceratop wrote:
Tue May 15, 2018 1:14 pm
And, the survey methodologies are not consistent with your definition.
Hmm, that's funny. :wink:
Got me. I'm definitely smiling. :)

I do wonder how people with roommates actually respond to such census questions given the counterintuitive definition for households with independent adults sharing a living space.
And, I never asked for the IRS definition of single. That has little to do with this topic.
Fortunately, I was responding to the OP and answering their question. :)
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Can a <median household save 1 year of expenses every year?

Post by terran » Tue May 15, 2018 2:18 pm

MrBeaver wrote:
Tue May 15, 2018 1:57 pm
terran wrote:
Tue May 15, 2018 11:36 am

$900 rent (2 bedroom apartment)

Notable exceptions:
> We do have a car, but we walk to work and could walk, bike or take public transit to get groceries, so I've excluded car maintenance, insurance and replacement from this.
> I haven't accounted for state income tax, so I'm effectively assuming they live in a no tax state. I tried a few states and you're probably looking at $100-150/month at this level of income.
Where is this mythical LCOL area where one can rent a two bedroom apartment for $900 a month, get groceries, monthly needs, and travel to necessary appointments on public transit or walk/bike, and within a state that has no state income tax? Seriously, I'd love a list of such places if anyone has one.

It sounds like a dream come true for a destination retirement even though I'm still many years away from that.
Where I live has an income tax, so there's another $100/month as I said (requiring a bit more belt tightening, or prioritizing more tax deferred savings over Roth), but I would guess parts of Nevada, Florida and maybe Texas would have similar cost of living.

In retirement, the $29k of spending outlined here would have state tax of about $500 (if it all came out of tax deferred accounts, less from other sources). Taxes really aren't that big a deal at lower incomes.

I can PM you where I live if you want, but I really don't think it's all that special if you stay away from the northeast and west coast. I've lived in NY too (not NYC obviously) with similar experiences.

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 2:20 pm

Pretty sure the OP asked only about households. I may have missed where they asked about single people and their savings rates no matter what the living situation though? :happy

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Re: Can a <median household save 1 year of expenses every year?

Post by triceratop » Tue May 15, 2018 2:23 pm

chevca wrote:
Tue May 15, 2018 2:20 pm
Pretty sure the OP asked only about households. I may have missed where they asked about single people and their savings rates no matter what the living situation though? :happy
If you want to get really technical about it, the OP didn't state that they were interested in the combined household income.

The following statement is true: I live in a household (according to the census, though I see no reason to follow their definition for the purposes of this topic) and make less than $59k gross income per year.

So, I answered the OP's question.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 2:25 pm

So, this thread has run it's course then since anyone can make up their own definition of household and claim they answered the OP's question? :happy

Can we get the lock out yet.....

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Re: Can a <median household save 1 year of expenses every year?

Post by frugalmama » Tue May 15, 2018 2:38 pm

terran wrote:
Tue May 15, 2018 2:18 pm
MrBeaver wrote:
Tue May 15, 2018 1:57 pm
terran wrote:
Tue May 15, 2018 11:36 am

$900 rent (2 bedroom apartment)

Notable exceptions:
> We do have a car, but we walk to work and could walk, bike or take public transit to get groceries, so I've excluded car maintenance, insurance and replacement from this.
> I haven't accounted for state income tax, so I'm effectively assuming they live in a no tax state. I tried a few states and you're probably looking at $100-150/month at this level of income.
Where is this mythical LCOL area where one can rent a two bedroom apartment for $900 a month, get groceries, monthly needs, and travel to necessary appointments on public transit or walk/bike, and within a state that has no state income tax? Seriously, I'd love a list of such places if anyone has one.

It sounds like a dream come true for a destination retirement even though I'm still many years away from that.
Where I live has an income tax, so there's another $100/month as I said (requiring a bit more belt tightening, or prioritizing more tax deferred savings over Roth), but I would guess parts of Nevada, Florida and maybe Texas would have similar cost of living.

In retirement, the $29k of spending outlined here would have state tax of about $500 (if it all came out of tax deferred accounts, less from other sources). Taxes really aren't that big a deal at lower incomes.

I can PM you where I live if you want, but I really don't think it's all that special if you stay away from the northeast and west coast. I've lived in NY too (not NYC obviously) with similar experiences.
Texas is pretty close to that MrBeaver. https://www.apartmenthomeliving.com/dal ... room/cheap That said, $900 is on the really low end for apartments in my area right now and you do get what you pay for. Housing prices here are on the rise as supply isn't meeting demand.

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Re: Can a <median household save 1 year of expenses every year?

Post by zuzimb » Tue May 15, 2018 2:42 pm

chevca wrote:
Tue May 15, 2018 1:51 pm
Yep, disqualified. Can I be the judge in this thread? :happy

You didn't say what your savings rate is anywhere in there, zuz. That would be nice to add.

It doesn't matter if roommates split everything 50/50 and one wants to calculate their own savings to expense ratio. But, if they want to chime in on this particular thread topic, they should include all income/expenses/savings, IMO. That is what the thread is asking after all. It's not asking how one can save an equal amount to their yearly expenses by whatever means necessary.

I don't think the OP asked that complicated a question. But, leave it to Bogleheads to make it so complicated. :happy
Well by default savings is anything that isn't spent....and per my calculation nothing that is meant to be spent (IE car savings doesn't count)

Current is about 69% - but that doesn't count because I've chosen a path that allows me to do that (though to be fair I agree on this point)


Okay, lets take the "live on my own basic apartment" since roommates don't count for whatever reason (don't agree with this one)

Savings rate would be roughly 50% +/- 5% for taxes 401k match/vesting/ect.
Last edited by zuzimb on Tue May 15, 2018 2:43 pm, edited 1 time in total.

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Re: Can a <median household save 1 year of expenses every year?

Post by wrongfunds » Tue May 15, 2018 2:43 pm

As long as moderators are participating, the hammer does not come down.

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Re: Can a <median household save 1 year of expenses every year?

Post by triceratop » Tue May 15, 2018 2:46 pm

wrongfunds wrote:
Tue May 15, 2018 2:43 pm
As long as moderators are participating, the hammer does not come down.
There is an implicit actionable question of "how" it possible to achieve such a result that the OP asked about.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 2:47 pm

wrongfunds wrote:
Tue May 15, 2018 2:43 pm
As long as moderators are participating, the hammer does not come down.
. :beer :happy

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Re: Can a <median household save 1 year of expenses every year?

Post by chevca » Tue May 15, 2018 2:49 pm

triceratop wrote:
Tue May 15, 2018 2:46 pm
wrongfunds wrote:
Tue May 15, 2018 2:43 pm
As long as moderators are participating, the hammer does not come down.
There is an implicit question of "how" it possible to achieve such a result.
And, the answer has been found.... make up one's own definition and anything is possible to achieve. :happy

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Re: Can a <median household save 1 year of expenses every year?

Post by terran » Tue May 15, 2018 2:50 pm

enclee wrote:
Tue May 15, 2018 11:56 am
There are so many things I could learn from you terran (Edited: Thank you, Winterfan), I don't know where to begin.

1) How did you get your cell phone bill so low?
2) Also, you're electric bill is low, but I found out I can actually shop for electric providers here in Central Texas. So, next year I can get my cost down.
3) Only $14 for haircuts for 2 people? I couldn't find one that cheap even on a military base, where they get you in and out in under 5 minutes.

Could you explain the savings portion, I understand where you got the employer match is from for the 401k and the HSA.

What are payroll deducted expenses and how do those drop your AGI?
1) Ting: $6/line (2 lines), we usually stay in the first bucket for voice and text and don't use data (wifi is usually enough, and you can download google maps including turn by turn directions for your area) which totals $18 plus tax. We have iphones as do most people we text with, so that's imessage not texting so sometimes we can eek through the month without texting. We use facetime for other iphone users and google voice for other numbers. I've actually been considering switching to another prepaid provider (maybe airvoice?) because we haven't even been coming close to the top of the 100 min/text buckets with ting, so it's a little frustrating to pay $3 for just a few texts that we use in a month (usually some kind of automated thing like an airline or something).

2) Yeah, we moved from Upstate NY to a state that neighbors yours last summer and I was really worried about electric costs, but so far so good. We live on the first floor with concrete floors, so that helps and I think it's possible that we're "stealing" some cool air from the upstairs neighbor (they probably steal some heat from us in the winter). Other than that I open the windows and put in fans at night, and keep them closed during the day, and we've developed a wide "comfort" range of as low as 60 degrees in the winter to a high of 84 or so in the summer. My wife likes being warm anyway, and we've found that 60 degrees inside with an outside temp in the 40s here in the south is actually more comfortable that the 68 in a drafty house with outside temps in the teens we used to experience. I think your body can feel the cold from windows and walls when there is a greater temperature differences between inside and outside. Our highest bill so far has been $75 in February (January usage).

3) Nothing magical. My wife has pretty short hair, so she doesn't like to push longer than 3 months (if she had long hair she could go longer) and I think she pays $35 plus a $5 tip, so averaged out that's just under $14. I cut mine myself (with some help on the back from my wife) using clippers. We're getting pretty good at it. It would be super easy if we just buzzed the whole thing, but I keep it a little longer on top than the sides.

The savings are just contributions to a traditional workplace retirement plan and traditional IRAs such that federal income tax can be reduced to $0, an employer match, maxing out an HSA (after the employer contribution) and then contributing the remainder up to the savings goal set by the prompt to Roth (either workplace plan or IRA) since you can't reduce tax tax lower than $0 (except when you can if your income is low enough and/or you have kids). Whether you prioritize the workplace plan or IRAs would depend on your investment options in each, but it doesn't really matter for the sake of this example. Here's info on the recommended investment order. Does that answer your question?

Payroll deducted expenses are just employer benefits that you partially pay for like health, vision, and dental insurance, sometimes some commuter benefits and things like that. In this example everything except the short and long term disability will not be included in box 1 of the employee's W2, so they won't owe taxes on it. Many people don't really think of these as expenses because they come out of your paycheck before you actually get it, but they're still things you're paying for one way or another.

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