How can I save 30% of my income?

Question

There are other countries that save a higher percentage of their yearly income than Americans do on average. I'd rather be on the higher end for once. What reasonable things could I do to put aside a large portion of my income?

Answer 1

This may sound crazy - but you just start by doing it - putting that money somewhere difficult to access (savings, investments, whatever you prefer).

You'll figure out what you can adjust when you force yourself into a position where you have to. It may be difficult for the first month or two, but you'll figure it out.

Answer 2

I got to where I was saving over 50% of my gross salary by saving every raise, bonus, tax refund, etc. I started doing this about 12 years ago because I realized I was living just fine on my current income; so when I got my raise that year, I saved the difference in my paycheck. After 12 years of raises, the percentage you're saving really accumulates.

Answer 3

Arrange for the 30% to disappear before you see it.

The best way we've found to save a lot is for the maximum to be deducted for our 401k/403b (pretax deduction), to put away enough for 2 Roth IRAs automatically, to have other money deducted automatically to go straight into a stock purchase program, savings accounts, etc.

If you never see it, it's actually easier to figure out how to live on the part you do see, and just pretend that you make a lot less than you do. For us, at least, it's a lot more effective that way than nickel-and-diming about whether we can afford a mocha at Starbucks.

Answer 4

Well, if you can, contribute 10-15% (or whatever percentage your employer matches) pre-tax dollars to a 401K, 403b, HSA, etc. Then create an automatic savings transfer for your "emergency" cash account of 10% take-home pay then max out your contributions to a ROTH IRA. That should bring you to about 30%.

Answer 5

Keep track of everything you spend, and figure out what you need. Some suggestions--quit smoking, don't buy soft drinks, don't buy the expensive coffees, drive less (possibly a lot less), etc.. You will know the things that you can cut back on if you look at everything you are spending. Oh, and put as much as possible in retirement vehicles that aren't taxed.

Answer 6

In the United States of America the savings rate is negative.

Even in Somalia they save more than in the United States of America.

Those Soldiers in Irak are expensive and you are paying for them. (It looks like your grandchildren will pay for them too)

Do not go to Blockbuster ever (Use Peerflix)
Go to McDonald's at least twice a week (Buy only a $0.99 Hamburger)
Buy fluorescent bulbs for each room in your house.
Buy a used Toyota Prius.
Do not use Credit Cards ever (If you are an employee)

Answer 7

Another way that no one has brought up is to create multiple streams of income so your are earning more than you spend.

Start a good business up then sell franchises to others and then spend your time teaching others.

The more you help the more you will make.

Its up to you and no one can make you do it.

If thats what you want then go for it.

I wish you all the best

Answer 8

This is very difficult (at least for me) especially if you have a family. Try cut back all unnecessary expenses, like bring your own lunch, taking public transportation, etc. But I would say this will make your life really difficult.

Answer 9

Spend less than half of what you did last year on entertainment and eating out.
This year , vacation somewhere that you spend less than a tank of gas to get there.
Switch to a lower car insurance rate.
Spend less than half of what you did last year on hygiene products. Go to a dollar store, wal-mart or costco for it.
Fix your morning coffee at home.