How much do you save a month in proportion to your earnings?

Frugality_2

I am not asking this question to be nosy it is genuine.

Since I won't be entering the economy for another year or so (uni), I would like to start saving as soon as possible but would like to have an idea of what people put away each month in relation to their income.

E.g. if I get a graduate job of around £23k - is it feasible to put away £500 per month. £500 is my target amount to save each month but wonder if people who regularly deposit this much a month are super rich hi-flyers or just regular graduates/earners, etc.

Thanks

isofa

I'd say it's definitely possible, it'll still leave 17K of your salary (depending on taxes) left. If you don't have a mortgage or massive other outgoings you might be able to save more too.

In my first few work years, whilst still living with my parents, I saved as much as possible ready to buy a house, 50% to 75% of what I was earning at that stage. Ahhh those were the days!

Frugality_2

Good point but it would most probably include a mortgage as well to reap all the benefits of being a homeowner - of course without it makes saving easier but a mortgage really is a must surely.

[Deleted User]

When I was house sharing (prior to buying my house) I managed to put between 300-500 away each month. I managed to move into my OH's parent's house for a couple of months and put away 2k in that period!

Nowadays.. erm, not much. Expecting a payrise soon, then I can probably put 300 away again

Frugality_2

OK the question is really in relation to income, for example that 300-500 you once put away each month is dependent on what you earn (not specifically, just the bracket). So if you earned 50k then of course life is easy whereas if you did that with a graduate salary then its different.

isofa

Frugality wrote: »

Good point but it would most probably include a mortgage as well to reap all the benefits of being a homeowner - of course without it makes saving easier but a mortgage really is a must surely.

Might be best to save as hard as possible for a good deposit for at least 6 months, if not 12 months + (if you have somewhere you can live in the meantime, cheaply!), then you will be able to get a better house, and/or a smaller mortgage. That's my principle to start with anyway.

Frugality wrote: »

OK the question is really in relation to income, for example that 300-500 you once put away each month is dependent on what you earn (not specifically, just the bracket).

But it's just as connected with your outgoings, if you have a massive mortgage taking 75% of your wage, then you can't save as much. If you have a small mortgage and small outgoings you can save much more.

Budget first what you need to live on, food, running a car (or travel), etc - if you are going to buy a house, this'll including all the household bills, gas, electric, water, 'phone etc. Then a percentage for luxuries. Finally work out what is available, this will show what monthly mortgage payments you can afford and you'll be left with a figure for saving.

torbrex

It is all relative.
My top line is approx £13500 and this gives me a take-home pay each month after deductions (including pension) of approx £980 including ave bonus. From this I save £640 which includes an overpayment to my mortgage.

All this adds up to me saving 65% of my take-home earnings.

I know people that earn twice what I do and save less than half, I am a saver by nature these day having peed it against the wall in my youth (and beyond).
I was lucky and learned my lesson and these days I am looking forward to paying off my mortgage 8 years early and also retiring aprox 8 years early.

[Deleted User]

ok... well, i was saving 500 a month when I was earning 22k... but it's not your earnings that matter, it's your (earnings - outgoings) = disposable income

By the time i'm earning 50k (maybe the next 5 years) I'll most likely have moved to a bigger house and have huge outgoings

So, how much of your disposable income do you save?

Frugality_2

Thats a better question: how much/what proportion of your disposable income do you save.

I am a student and save as and when, for now.

isofa

Disposable, about 60-75%, but at times 100% as it's often saved in instant access, so can then be used for disposal, luxury purchases.

torbrex

It may sound a bit boring but I take advantage of the fact that drinking, smoking and a constant steam of take-aways are not compulsary and also a bit boring, I do not have a highly active social life at the moment so I am almost embaressed to say that I am saving approx 90% of my disposable during my current drive to pay off my mortgage early.

Part of my savings do go into my holiday fund so I have a blow-out of about £3000 minimum every year on holidays.