
Ask HN: Average savings per month? - molmalo
Hi, I usually read about devs making 110-130k in the West Coast, and generally less in other states... But I&#x27;m curious about how much on average do they end up saving at the end of the month.<p>I know it differs a lot depending on the lifestyle, but how much is the norm? (For a single, with no kids, to simplify things)
A simple breakdown of the main expenses would be greatly appreciated, i.e. taxes, rent, food,  health, services, leisure, rest=savings.<p>What percentage of your salary do you end up saving? Thanks!<p>(Answers from other countries would be interesting too, for a richer comparison!!)
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iamjdg
I live in Vancouver Canada, married with 2 kids. We own our house.

We save 48% of our take home pay, so spend 52%. We live the extreme early
retire lifestyle, not for everyone. Some extreme early retire people would
laugh at our savings rate (only 48%!).

The breakdown of the 52% spend is

\- 27% goes to housing (mortgage, property taxes, house insurance)

\- 5% goes to fixed costs (car insurance, life insurance, internet, cell
phones, utilities, Skype phone, Netflix, VPN service, etc.)

\- 20% goes to variable costs (groceries, gasoline, supplies like toilet
paper, light bulbs, entertainment like restaurants, bars, movies, sport league
fees, etc.).

I know variable costs are big, but we only loosely keep track of this. We
control it by only allowing ourselves so much spend cash per month for these
variable things and we stick to it, if we get low, we don’t do it or we have a
serious discussion. We’ve tried to lower it more, but this seems the right
level for our lifestyle.

I know I know, we own a house in Vancouver. Hey, we bought fixer upper years
ago and got lucky with the market. I don’t count house equity in our extreme
retirement plan, as far as I am concerned, it will be icing on top of the
cake. Our only debt is mortgage (student loans paid off, 1 car that we paid
cash for).

~~~
bliti
Im with you. I save about 55%-60% (depending on month) because it provides me
with peace of mind. I enjoy the simple life and have always shunned away from
luxury. But dont confuse me with a penny pincher. I make sure to enjoy life.

~~~
iamjdg
damn you beat me on savings rate...please tell me you don't have kids so I at
least have an excuse.

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Epenthesis
I live in SF and make 140 k$/yr in pretax income.

On a per month basis:

    
    
      * 11.67 k$ in pretax earning
    
      * 7.85 k$ in posttax earning
    
      * 4.85 k$ in savings
    
        * In order, maxing out Roth IRA, then Roth 401k, then non-tax-advantaged brokerage account
    
      * 3 k$ in spending
    
        * 1 k$ in rent + utilities (I live in a dump with 3 roommates)
    
        * 400 $ on food
    
        * 300 $ on transportation
    
        * 1300 $ on miscellany (entertainment, clothes, travel)
    

I could probably put effort into tracking that last item better, but I'm happy
enough just tracking the top line.

~~~
aliston
If you are making 140k, aren't you above the limit for a Roth IRA?

~~~
Epenthesis
"Backdoor" Roth. See:
[http://www.bogleheads.org/wiki/Backdoor_Roth_IRA](http://www.bogleheads.org/wiki/Backdoor_Roth_IRA)

------
flexd
I make around $58k before taxes. Currently near 100% of that is going into a
savings fund to buy an apartment. My parents generously offered to let me live
in their street level basement for free until I can afford buying my own
place, so I moved in last summer after I finished university. I am close to
having enough money to get a loan, and I am looking for a suitable place now.
Trading some of my privacy and independence at 27 years old is probably hard
for some, but I have a good enough relationship with my parents that living
with them is not a huge problem, even if my social life (i.e having people
over) has been somewhat diminished.

This does not answer much of what you asked for though, since you are not in
the same situation.

When I was in university I worked part-time, and I also got a loan&stipend
from the government (as all students do in Norway). I usually made enough to
save 40-50% of my income, which is why I have money saved up now. I made maybe
$15k before taxes from work and got about the same in student loans. 40% of
the student loans gets converted to a stipend if you pass your exams.

By the budget I have planned for when I buy an apartment, it will look
something like this:

\- Rent/Loan: 40%

\- Groceries: 12%

\- Utilities/Electricity/Stuff: 16%

And then there are probably more expenses I have not accounted for, but
hopefully I will be able to save some money, but probably less than 32%

~~~
saiprashanth93
just curious, what are your reasons for buying an apartment? I never
understood why people bought homes when their parents already own a house.

~~~
flexd
I do not plan on living with my parents forever. Basically I can either pay
like $1000++ per month to rent, which would be money I never see again, or if
you have saved up money like I have, I can get a loan and buy something and
spend about the same paying down the mortage. Money well spent, because at
some point (like 25-30 years) I will own the apartment outright. Of course I
will probably not remain in that apartment for the next 25 years, but it is
basically an investment. There are only so many places to live in central
Oslo, and the demand is always going up. And even if the market crashes and I
lose a lot of money, the prices of all the other apartments will be lower as
well, so I would be able to buy another place at an equally lower price.

Loan interest is very low at the moment, around 2.7-2.9%, and to counter
everyone loaning way too much, you need to have 15% of the loan sum in order
to qualify. I can expect to pay maybe $320k for a apartment in Oslo, depending
on how big and where it is. $320k would typically be >50m2 somewhat central,
or 30-40m2 very central (those go for even more). I will need to have about
$48k in cash to be able to get a loan at that price.

I also have some student loans, but I have basically my whole life left to pay
them off at a very low interest, so I pay like $154 every two months or
something I think. It is the best interest loan I am ever going to get, so
there is no point just paying it down immediately even if I have the cash for
it.

TL;DR: Paying for a mortage is better than paying someone else rent, and I do
not want to live in my parents basement forever.

~~~
saiprashanth93
Cool. I guess in your case it makes sense because of the low interest rate. I
didn't mean that you would live with your parents forever. What I meant was
since your parent's already own a home, its already an investment by them that
you are going to inherit.

I never understood why buying a home is a good investment option since ROI is
very low for a very long time unless you sell the house for a higher price or
you make all the money through rent, which is probably never happening
considering other costs that come with owning a home.

This article makes all the point I was going to write and some more.

[http://www.jamesaltucher.com/2011/03/why-i-am-never-going-
to...](http://www.jamesaltucher.com/2011/03/why-i-am-never-going-to-own-a-
home-again/)

------
incomethrowaway
I live in the bay area (not the city) and make ~$300k per year. A chunk of
that is bonus and RSUs and is paid out in increments because of that.

$300,000 (work income)

+22,000 (rental income)

\-----------

$322,000 income

-90,000 (~30% effective tax rate for CA + Federal taxes + SSI, ignoring rental income)

-18,000 (401k contribution)

\-----------

$108,000 taxes and pre-tax investment

-36,000 (rent)

-17,000 (home mortgage, insurance, property taxes)

-8,000 (miscellaneous expenses, shopping)

-5,000 (groceries)

-5,000 (restaurants and bars)

-4,000 (property manager)

-2,500 (public transit, auto: gas, car insurance, maintenance)

-2,000 (vacation)

-1,800 (utilities)

-1,000 (pet)

\-----------

$82,300 spending

$322,000 - 108,000 - 82,300 = 131,700 savings per year

So, my total savings per year is $131,700 into taxable investment vehicles +
$18,000 401k (+ additional company match money) + equity in my rental property

If I made $130,000, my spending would be at about 60% of my income, my taxes
would be at about 20-25%, so my savings would be at 15-20%. However, I'd
likely cut back some of my spending pretty substantially if that were the
case.

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sahhhm
NYC, living single, making a bit less than the "West Coast" salary specified.
All percentages approximate, but pretty close.

Breaking down the original amount provided by the company:

28.5% - Tax

3.5% - Pre-tax contributions for healthcare and transportation

17% - 401k Savings

2.79% - ESSP Savings

3.67% - Direct Savings

23% - Rent

21% - monthly expenses

After taking out taxes and pre-tax deductions (the money I have more control
over):

17% - 401k Savings

5.5% - ESSP Savings

7% - Direct Savings

44% - Rent (it could be as low as ~33% if 401k contributions are eliminated)

27% - monthly expenses

------
edpichler
I make USD 17187 annually and save an average of 25%. I have a 2.0 liter car,
I rent a house and I do not live with my parents.

------
Jemaclus
Unmarried 30-something here, no kids.

When I made 100K, my monthly expenses were ~$3000, but I took home about
$5000, which left me with a little over 2K in savings each month. The #1
expense is rent (SF Bay Area is bad), followed by food (I eat out for lunch
every day, and I don't cook often in my shitty apartment).

One thing to consider is that $1 is $1 anywhere in the country. Consider the
following scenario:

50K salary = 37K take-home pay - 50% expenses (keep the math simple) = ~18K
savings

100K salary = 65k take-home-pay - 50% expenses = ~32K savings

In my experience, even though the cost of living is higher, the salary-to-
expenses ratio is _roughly_ the same (give or take a few K). In other words,
even if I have to pay $2500/mo for my 1BR apartment in San Francisco, and my
monthly expenses reach $4000, I'm still saving at least $1000/mo, which is
more than I'd be able to save making a comparable salary (~40K) back home in
Alabama.

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bowlich
No kids. I telecomute from Wyoming so my cost of living is quite low but I'm
paid comparible to developers in the research triangle area (NC). I do not own
a house, so no mortgage but I do have some large student loans. Most of my
leisure spending goes into groceries since I like to cook and everything else
that I do is pretty much free at this point (camping, hiking, biking, kyaking.
Once I bought the equipment I'm pretty much set for life).

Running the numbers quick. Based on my take-home paycheck, I have a cash
savings each month of 20% and on top of that I'm putting about 10% into
retirement. So 30% savings.

Full break down:

20% Cash savings

10% Retirement

30% Student Loans

5% Housing/Utilities/Phone/Internet

15% Groceries

20% Misc & Vehicle Expenses

------
stevenspasbo
I live in Oakland with my girlfriend and we rent a 1 bedroom apartment.

My roughly 7k (pre-tax) a month goes to:

28% Taxes

10% Rent

15% ESPP

7% 401k

4% Vanguard

Most of that is automatically deducted (except for rent), and I usually end up
with only a few hundred at the end of the month, meaning I'm saving about 25%.
The rest goes towards groceries, car insurance, student loans, and way too
many concerts/restaurants/nights out with friends.

I should probably increase my savings considerably but I like the lifestyle
I'm living too much.

------
yitchelle
Living in Cologne, Germany in a 2kid family, working as a lead software
engineer, saving about 25%/month of salary. Wish I could save more.

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thecopy
Will be making 44,4k USD each year starting september (student now). I will
according to my budget save around 28% of that. 35% goes to rent. Although
this is a trial employment, after i get a real employment (after 6 months
assuming i won't fuck up) i will make 53k USD. I am from Sweden, btw.

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gorankami
me: junior/medium sw developer in Belgrade, Serbia. I'm saving around 25% per
month, or 15% if i buy something new for myself. I don't know what a mortgage
is but I guess it's a loan for buying a place to live, which would probably
dry out all my savings I guess. My expenses are: around 20% to rent, 10% for
electricity, water, internet, phone and training expenses combined, 40% for
food and 10% just get lost somewhere without a trace :)

There are jobs with greater salary, but I'm suggesting a medium perspective in
the region of eastern Europe. I used to have a job in a smaller city which
left me with 0% savings, and I had to live without internet for that, it's
just the way it is/was, I'm just glad it's getting better for some cities and
young engineers.

~~~
twunde
Correct, a mortgage is a loan with a house/apartment as collateral. It's often
taken out to finance the buying of a home but if you already own a house can
be taken out for other reasons (paying for college or financing a business).
You generally have a number of years to pay it off (15-30 I think)

~~~
gorankami
Thanks for clearing that, it is exactly what I thought it was. But still, I am
curious: how do you solve the problem when you got only a house that your
parents own but its price its close to nothing, due to bad location?
Basically, you don't have much to guarantee for the mortgage. How do people
that get from low into middle class solve that? Save for decades until you
have enough? I am clueless of the options...

~~~
axaxs
You don't have to have much or any collateral really to begin with. The house
you are purchasing becomes the collateral. So you don't have to put up a
previous house to get a new house. Essentially, you find a house you like.
Let's say it costs $100,000 USD. You go to a bank and tell them you want a
loan for this amount with which to purchase the house. This is where it gets a
little muddy - depending on the loan type, some want 3% down, some 10% down,
etc etc. My most recent loan was 0% down, but a higher interest rate. The
reason that lenders are willing to do this is two-fold. Firstly, if you don't
pay, they will take the house back. So they generally make sure the house is
worth equal to or more than the loan amount - hence why many want a down
payment - so that the loan amount is less than the purchase price, in case
they have to take it back and resell it. Secondly, they stand to make much
interest over time. You can run the numbers, but that $100,000 house you'll
end up paying 50-60,000 or more in interest over the course of the loan. Hope
this helps.

~~~
gorankami
It helps a lot, very informational, thanks!

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colindean
US rust belt. I think I'm saving about 15% of my take home pay, which is after
a 10% 401k deduction, which my company matches 5% + 1% automatic. So, it works
out to about 26% total. I don't include bonuses in this, but I generally end
up not spending those.

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cgearhart
US East Coast; after-tax net pay ~100k -- 9.21% in pure savings; another 9%
goes into 401k. We have kids, so we have much higher expenses in housing,
food, daycare, etc., compared to DINKs; plus impacts from higher than usual
(even in the US) healthcare costs.

------
MalcolmDiggs
When my checks come in I tend to split them in thirds:

* 1/3 goes to tax withholdings (I'm a 1099 contractor so my taxes are a bit higher than normal)

* 1/3 goes to living expenses

* 1/3 goes to saving and investing

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arisAlexis
Amsterdam dev here, only 500e/m but I live well.

~~~
collyw
500 euros per month in Amsterdam? I find that hard to believe. Isn't it per
week?

~~~
S4M
Should be doable if he doesn't have to pay for the rent (already owning his
house or staying with his parents) and has a modest life style.

~~~
collyw
Starting salaries in the UK and Spain are usually around double that.

~~~
mod
That's how much he's saving. He just answered the question posted in the
title.

~~~
collyw
Ooops, my wrong.

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lgieron
London contractor, saving >80% of my post-tax income.

~~~
edpichler
Do you live in London?

~~~
lgieron
Yep. I rent a small room in Zone 1.

~~~
edpichler
You are getting rich! Keep doing it!

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ratfacemcgee
iOS dev, 90k. saving 0% cause I'm an idiot.

