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This one will hurt. There’s no sugarcoating it. Part of me debated whether it was even worth covering because, honestly, our job is to entertain you. But it’s out there, and this conversation needs to happen. We’re biting the bullet. Together.
CNBC spoke with Kimmie Greene, a money manager with Intuit and spokesperson for Mint.com, about how terrible Americans are at saving money, and what we should be aiming for. Hold onto your butts.
In your 20s: Aim to save 25% of your overall gross pay, Greene tells CNBC. “That 25% is the combination of 401(k) withholdings, matching funds from your employer and any cash savings that you have,” she notes. “It can also include debt repayment.
Well, that’s lofty, no? My twenties are long gone, but I’m still haunted by juiced-up wedding seasons, bachelor parties, and boys’ trips that were just too wild to say no to. That’s the problem. Your twenties are all about saying no to expenditures like that, but in the age of Instagram Albums, it’s nearly impossible to go into hiding after saying no.
Greene also notes that we should, “Just make sure your lifestyle expenses don’t exceed 75% of your gross income,” because fuck all of us.
Now it gets fun.
By age 30: Have the equivalent of your annual salary saved, Greene says. If you earn $50,000 a year, aim to have $50,000 in savings when you hit 30.
What do you want me to say? That it’s doable? I’m sure it is if you have a time machine. I know a few people with some very profitable side hustles that probably knocked this out of the park. But my goodness, this is painful. We’re in it together.
By age 35: Have twice your annual salary saved.
By age 40: Have three times your annual salary saved.
By age 45: Have four times your annual salary saved.
By age 50: Have five times your annual salary saved.
That’s enough. You get the idea. Let’s just all agree to chill out on the postgraduate degrees, and to say no to the occasional destination wedding. And maybe chill on the golf. Green fees are getting out of control and you can’t even hit your 1200 dollar irons. Also, maybe don’t pull the trigger on that jet-ski – unless it’s a super tight one that actually makes a lot of fiscal sense since your buddy’s brother has a lake house that’s only a couple hours away, and he’ll probably let you and your boys chill there when he’s not relaxing with his family..
[via CNBC]
Image via Shutterstock
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Dave
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Looks like I’m having nothing for dinner tonight.
“Why is no one commenting on what’s for dinner anymore?”
To busy closing deals
Obviously this guy has never lived in a major metropolitan area where your spending 30 to 40 percent of your take home on rent. Guy must be from the sticks in some fly over state.
Even in the Midwest these goals are simply ridiculous to accomplish.
Can’t wait to move to the burbs.
Just bought a house in the burbs. PITI is 20% of combined net take home pay. So worth it.
I have 500 bucks and a few pieces of art worth some money. Am I adulting?
Get that emergency fund up to $1000 before beginning your debt snowball
Dave Ramsey yo! The paid off home mortgage is the new BMW
Your savings account needs to be like at least 3 times bigger than that
What is this? A savings account for ants?
Laughed way too hard at this…
When you retire, by definition you stop closing deals.
Never retire. Never stop closing deals.
Hey, if the Dow keeps going up 300 points everyday we’ll be at Dow 50,000 in no time and all this will work out perfectly for us.
It must be nice living in a fantasy.
Is this savings plan contingent on not getting married until you are old enough to start collecting social security?
what the fuck is the point of even having money if I save it all until I’m too old to enjoy it?
That’s not financially possible with grad school loans.
Amen brother.
Pretty sure compound interest is very helpful here. Start early my friends.
Amen. Each of the goals after saving your salary by 30 (which is admittedly a bear) are actually progressively easier because of the compounding.
Parents made me start saving my paycheck at 16, and I’ve continued it. I could stop now at age 26 and compound would be nice to me.
Don’t be a quitter, Jim