What percentage of your wage do you save?

throughtheblue

Out of interest, what percentage of your wages do you try to save?

I began following the FIRE (financial independence, retire early) movement 4 years ago, and managed to save 30 – 40% for the first year or so. Over the years with slight increases to my salary, as well as reducing most of my outgoings, I can save 65-70% of my salary.

It's not for everyone, but I have a lot of colleagues at work that live pay-day to pay-day, but have a lot of baggage in expenses that could be optional.

El_Torro

Somewhere between 40% and 50% of my annual incomings end up as savings or investments. The rest I spend. 

I haven’t made a conscious decision to limit my spending, it’s just that over the years as I have had higher paying jobs I haven’t really increased my spending at the same rate. Being single with no kids helps to keep spending down too.

RyanHello

If you've saved up enough money to cover six months' worth of living expenses. That's all you need really. It's a good feeling to have that cushion, and it allows you to focus on investing the rest of your money and enjoying yourself without worrying about the basic needs.

throughtheblue

RyanHello said:

If you've saved up enough money to cover six months' worth of living expenses. That's all you need really. It's a good feeling to have that cushion, and it allows you to focus on investing the rest of your money and enjoying yourself without worrying about the basic needs.

I've saved enough for 2-3 years living expenses, but have the bulk of it in an instant access saver, earning me monthly interest.
I'm at the point where I need to look at assets and diversifying, but I tend to be very cautious.

thebikemechanic

We are currently saving 12% of our net take home household pay. Looking like that will go down to 10% in the next few months as our mortgage rate rises. Feels like swimming against the current, but aware we are fortunate to save anything at all. This is currently building an emergency fund, and we hope it will allow us to front the money required for some home extension work as we are in a 2 bed house with a family of 4. Once/if that is out of the way, more will be put towards investments rather than cash savings. 

throughtheblue

thebikemechanic said:

We are currently saving 12% of our net take home household pay. Looking like that will go down to 10% in the next few months as our mortgage rate rises. Feels like swimming against the current, but aware we are fortunate to save anything at all. This is currently building an emergency fund, and we hope it will allow us to front the money required for some home extension work as we are in a 2 bed house with a family of 4. Once/if that is out of the way, more will be put towards investments rather than cash savings. 

I can see how a mortgage, especially with rates increasing, would limit opportunities to save. I'm lucky to be renting at the same rate I was in 2018 and have an enough for a deposit on a first time house purchase, however, it would easily double by monthly outgoings.

Good luck.

housebuyer143

60% household income saved here. We don't consciously limit spending but my husband and I are not big spenders so it just happens 🤷‍♂️ 

El_Torro

throughtheblue said:

thebikemechanic said:

We are currently saving 12% of our net take home household pay. Looking like that will go down to 10% in the next few months as our mortgage rate rises. Feels like swimming against the current, but aware we are fortunate to save anything at all. This is currently building an emergency fund, and we hope it will allow us to front the money required for some home extension work as we are in a 2 bed house with a family of 4. Once/if that is out of the way, more will be put towards investments rather than cash savings. 

I can see how a mortgage, especially with rates increasing, would limit opportunities to save. I'm lucky to be renting at the same rate I was in 2018 and have an enough for a deposit on a first time house purchase, however, it would easily double by monthly outgoings.

Good luck.

Without knowing what your current rental arrangements are, the low rent you're paying may not last forever. Why not get on the property ladder ASAP and start paying down the mortgage? 

As you say you are a recent convert to the FIRE movement. Congrats on saving as much of your income as you do. You're going to find it hard to become financially independent without owning the property you live in and being reluctant to invest (rather than save). Do you not even have a pension which is invested? Saving a big chunk of your income is a great first step, what you do with that money once you have it is important too though. 

I don't mean to be critical, just hopefully giving you some food for thought.

throughtheblue

El_Torro said:

throughtheblue said:

thebikemechanic said:

We are currently saving 12% of our net take home household pay. Looking like that will go down to 10% in the next few months as our mortgage rate rises. Feels like swimming against the current, but aware we are fortunate to save anything at all. This is currently building an emergency fund, and we hope it will allow us to front the money required for some home extension work as we are in a 2 bed house with a family of 4. Once/if that is out of the way, more will be put towards investments rather than cash savings. 

I can see how a mortgage, especially with rates increasing, would limit opportunities to save. I'm lucky to be renting at the same rate I was in 2018 and have an enough for a deposit on a first time house purchase, however, it would easily double by monthly outgoings.

Good luck.

Without knowing what your current rental arrangements are, the low rent you're paying may not last forever. Why not get on the property ladder ASAP and start paying down the mortgage? 

As you say you are a recent convert to the FIRE movement. Congrats on saving as much of your income as you do. You're going to find it hard to become financially independent without owning the property you live in and being reluctant to invest (rather than save). Do you not even have a pension which is invested? Saving a big chunk of your income is a great first step, what you do with that money once you have it is important too though. 

I don't mean to be critical, just hopefully giving you some food for thought.

My rental arrangement is secure to an extent for a few years, but not guaranteed.

I have a DBS pension with the NHS, that I make a 7.1% contribution to. 5/10% of money I have available is invested in speculative biotech, a long position I've held for a couple of years.

My intentions over the last two years have been to buy a house, however I'm more interested in finding something that I'd be content to live in, for the foreseeable future. I wanted a 2/3 bed in a small town/village in a certain location, however these type of properties don't come up frequently. If I can get close to what I'm after, then it should limit concern of house prices/mortgage rates in the shorter term. I could opt for an apartment, but I'd probably want to be there for a limited amount of time, which I think could make moving difficult with short-medium term uncertainty.

Thanks for your input.

Novice_investor101

I invest over 50% of my salary, with the caveat being that most of this is free money I wouldn’t ordinarily receive - matched pension from my employer with me paying in the max to get the matching by salary sacrifice (so tax & NI saved). Then a buy1get2free share incentive plan. Then a LISA with 25% bonus added. 

I worked out a while ago that I personally contributed just under 50% to the total invested a month so probably works out as 25% of my salary invested by me & another 25% in free money. 

I also put a little cash away some months but not religiously as my emergency fund is sufficient & I don’t need more cash. 

Flugelhorn

we save 50% of our pension - no good must spend some more