Let’s talk savings for a second. I saw an article the other day that was pretty eye opening to me. Did you know that 35% of Americans have nothing in savings at all. Not even a dollar? 34% have only a few hundred. 52% of Americans don’t own a single stock or stock-based account like a money market account. Almost half of working adults have nothing saved for retirement at all. Of those that do have any money set aside for retirement, the average amount saved is only $25k, which might seem like a nice chunk of change, but most Americans will blow through in less than a year. What does that mean? It means 22% of married Social Security recipients and 47% of single recipients depend on Social Security for 90% or more of their income, not drawing a penny from any retirement savings.
So where is this lack of savings coming from? The current non-savings climate hasn’t always been the case. Our grandparents scrimped and saved all the time, but it seems the current generations aren’t fond of it. There are some that believe the “live for today” or YOLO ideology are to blame and have been adopted by millions.
Life is short, so live every moment to the fullest and figure out the rest later. I do get the sentiment behind that. I want to travel and have adventures and live a full life before retirement age. I want to take advantage of my youth and health now. But, the thought of having nothing stashed away for retirement and depending on social security to pay my bills freaks me out. If I blow everything living it up now, what happens when we’re in our 60s or whenever and ready to retire and we simply can’t because there is no money to do so. We keep on working, just like millions of Americans forced to work passed “retirement age.” Or we’d go into massive debt after we retire like 61% of 60+ households!
What are your thoughts on this? Do you think it makes sense to spend now and save later? Is there a benefit to enjoying what your hard works pays for while you are still a spring chicken? Do you think saving for retirement is important? Is it a priority for you?
The following is what experts say you should have saved at every age. Do you agree?
- In your 20s: Aim to save 25 percent of your overall gross pay
- By age 30: Have the equivalent of your annual salary saved
- 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.
Do you agree? Was that pretty eye opening? Are you panicking a bit or is your saving on track?
Save on,
~Mavis
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sheila says
These stats scare me, but don’t surprise me. Personally, I’m not depending on SS at all. My husband and I are well ahead of the savings game according to those numbers, but I’m more concerned with what will happen to our nice nest egg because of the poor savings habits of everyone else. Will the market tank by the time we need it?
Linda says
Last few yrs of no kids at home we saved, but when kids were growing up, it was slim pickings. There was no way to really save. We had a lot of medical bills. You just do the best you can. We’ve always lived frugally.
Julie P says
I couldn’t live like that, we have lived our lives working hard to provide something for when we retire. So have a lot of people here but there is a very large percentage of people who are due to retire in the next 10 years who have no provision but the state pension. In the uk we have always had a percentage of our income taken directly for tax etc. We have PAYE (pay as you earn) for taxable pay and this is 20% of gross income over £11,000 under this you don’t pay any taxes and the ceiling for 20% is £45,000, those who earn over £45,000 pay 40% up to £150,000 and so on. Unless you are self employed then you fill in a tax return. There is also a percentage deducted at the same time for National Insurance. This is for our State Pension which we should get when we are around 66 but this age is intended to go up somewhat. So theoretically everyone should get a state pension which is around £155 per week at the moment. It was decided quite some time ago to encourage companies to provide personal pensions with a view to making it mandatory for everyone in employment to have their own pension. This came into law this year and the government will pay so much into your pension by way of tax deductions so they are going all out to ensure that people in employment have a pension. But what about those who don’t work? Well they will get the state pension whether they have paid in or not although I’m not sure if they get the same amount. The worry here for people who don’t have a private pension for whatever reason is whether the state pension pot will be able to continue to pay out. We have people not just living for today they are living for tomorrow and the next day too, personal unsecured debt is on the rise again. I just don’t know how people live like it. Perhaps they think the apocalypse will come and so they spend, spend, spend. But what if it doesn’t?
Patty P says
All we have left is to pay off the house (and we’re planning on doing that early). We have some savings and retirement accounts, but not the amount recommended yet. We are working at it though! It takes a lot of will power and focus to save money and/or pay down debt, but is totally possible.
Holly says
This is something I discuss a lot. I don’t actually think the Yolo attitude is totally to blame, though perhaps in part. I think it’s more a problem of careers and the lack thereof. University degrees no longer necessarily mean a steady income. People are taking that mo EY they would have previously saved, and putting into further education, or saving for a house, which costs so much that it eats all of their savings immediately. Or, they’re paying extortionate rent which doesn’t allow for much extra each month. I am 31, very good with money, very decent normal job, and have yet to save a thing. Just paying my expenses is really all I can manage, and that’s with only spendinga110 euros on groceries each month. And yes, if you ask me if I’d like to work hard and take two weeks off to go on a holiday, or work hard all year and take two weeks off (mandatory) but save the money, I’m taking a holiday. Many of my friends are in the same position. Those previous generations were living in a totally different economy.
Mich says
Agreed, my roommate and I were just discussing what the future will look like for people our age when they hit retirement age, since so few of our contemporaries have much savings, nor are they offered retirement plans through their work. As a 35 y/o professional I am working hard to make ends meet and pay off my student loans leaving very little left over to save any additional $ for retirement. I live on a strict, frugal, bare-bones budget, causing me to constantly tell myself no to traveling, eating out or buying things. I see my (non-work) retirement saving slowly increase, but I know it won’t be enough to fully live on and causes me so much anxiety! Not only has the cost of living and education increased disproportionately to wages but retirement packages offered by employers are far less generous these days. I am so, so lucky to have a job that actually offers a pension plan and despite disliking what I do, I don’t feel like I can leave since I know that I probably won’t be able to find a comparable retirement/ pension plan locally.
Holly says
Exactly my point and thanks for bringing up loans. Thankfully I was able to pay mine off in only 10 years.
I’d add to that that during the crisis unemployment went way down in many countries, and one of the ways in which they are dealing with that is to give people zero or 10 or 15 hour contracts. They have their employees, maybe there are 3 people doing 15 hour weeks instead of one full timer earnings g a bit of overtime. Those three people have something coming in, but definitely no pension, and in the meantime unemployment is ‘decreasing’.
I think that people who simplify it to a change in attitude are lucky enough to belong to a different generation or financial background. It’s much more complex an issue than a lot of 20-30 something’s saying that they need to spend all their money on living in the moment.
R says
YES! My husband and I are in our 30’s and are educated (for reasonable cost universities) and we have a hard time saving. We have scrimped and we are frugal and we do have a child that has medical needs that cost more than average but it’s not like we are living extravagantly or having fun. I get so annoyed when everybody just assumes we are in our position because we are spending money like it’s no big deal. It’s something I stress about every single day despite our jobs and our living situation. I think it’s this generation’s “trial” of sorts because many of us are trying but the numbers just don’t exist like they did even fifteen or twenty years ago to allow for success.
Aunt G says
I think the instant gratification mind set is to blame. Buying stuff on credit today robs us of tomorrow. Most people eat, drive and live in their retirement today.
As far as us. We are on track to have a nice retirement along with a pension and we are looking at buying rentals now for another source of income. We are not rich. One income of 70k per year. With two kids looking at college. We have just followed Dave Ramsey’s plan and it works.
Our kids 15 and 18 work the plan too. They both have paid for cars that are nice and plan to pay for half of their college in cash. We will pay the other half.
If you work a good plan, anyone can do this…
I’m not counting on social insecurity.
Sheila from Alabama says
I would like to say that we read Dave Ramsey’s total money makeover and followed the plan and it changed our lives forever. Buy it used for cheap and try it for a year, nothing to lose in trying. You can pay to take some of his classes but we found reading the book was all we needed. It is very easy to understand and follow.
Karin says
I’ve always been a saver. I think the amounts you list as the expert’s advice are pretty good. I can’t imagine having nothing to fall back on. When we were in our 20’s, just out of college, we were super frugal. When all our friends were spending tons of money on everything from new cars to eating out and drinking at bars we were saving. Everyone looked down on us then since we didn’t “act” like we had money. Well 30 years later we are laughing all the way to the bank!!! And now, even though we can afford pretty much whatever we want, we make sure we still live below our means.
Bridget p. says
For my husband I, we r just the past few years really being able to save. This was due to about the first 15 years if our marriage my husband having a job that always had layoffs in the winter when we needed money the most! We also almost lost our middlest child during that time and while I am grateful to the hospital, doctors, and nurses that saved her life it left us with a butt load of debt! That being said, we scrimped,saved, and made payments. I know some people say not to take a vacation until all of your debt is paid off but my husband and I take a modest vacation to places we can afford and not break the bank. I think it’s all about balance, let’s enjoy life to a degree now but let’s also do our best to save for the future too.
Stephanie says
I’ve always been a saver, and I married a saver. Our retirement savings are on track and we hope to be able to retire early if we want to. We’re in our 30’s and we maxed out both of our IRAs for the first time last year. It’s amazing how if you pay yourself first, you find a way to make do with the remaining money for the rest of the month.
Mavis Butterfield says
YES! –> It’s amazing how if you pay yourself first, you find a way to make do with the remaining money for the rest of the month.
Anonymous says
Posting this anonymously just in case. I’ve watched my FIL’s health begin to take a swift decline at the age of 72 , but he HAS to keep working! He and his wife have debt (including a mortgage on a home they’ve lived in over 40 years) up to their eyeballs!!! Watching this unfold over the years has really put a fire under my husband and me!
Best trick…max out your retirement savings deposits BEFORE you even see the paycheck. (If your emoloyer does this!)
Anonymous says
Omg, my in-laws still have a $140,000 balance on a mortgage they initially got in 1992 for $120,000. Several refinances to pay credit card debt for vacations, meals out, random purchases. They just turned 70 and are talking about a reverse mortgage. I’m terrified to think of what is going to happen if that money runs out.
Mavis Butterfield says
And that’s the key. BEFORE you see the paycheck. You can’t spend it if you don’t have it. It may hurt when you first start having your savings deducted, but after a while, it doesn’t even register in your mind the money is being taken out. I wish more people would get that.
Carrie says
I’m 30 and apparently not on track. I worked PT after college barely getting by until I found a FT job when I was 27. I started to save 12% of my income (by Dave’s rules) off the bat and continue to do so. I have a state retirement plan, 401k and Roth IRA and it all is taken out before I get my paycheck. It’s the money I get after those deductions that I need to learn how to manage.
Amy says
Yes! My parents were in this boat. Had taken out second and third mortgages on their home. My mother spent money as fast as it came in. She passed away a couple of years ago. All that “stuff” amounted to a couple thousand dollars in estate sale revenue. Now, my father, 83 years old, has nothing to show for a lifetime of hard work (sometimes two jobs), health declining and barely covering his bills month to month on social security and a little pension. Just Medicare for insurance. Because they didn’t want to spend money on supplemental insurance. No life insurance. Again, why spend that money when you can buy junk instead. I still send out checks every month to continue to pay off debt for him. Wondering, as his medical needs increase, how long until his money runs out. It has certainly been a lesson in what not to do! And to never put my children through.
Miriam says
In your 20’s, save 25%… So if you are in school and getting into debt, 20% of $0 is $0…
But in all seriousness, the friends I had in college are struggling to just pay off their student loans, let alone actually save money for anything.
People are retiring later in life because they need the work, but that means those positions aren’t open for the next generation. I know too many people who have college degrees and are working entry level positions, like cashier or fast food. Work experience is often more important than schooling until you hit arbitrary moments where a degree is required.
Sallie Borrink says
I think you are starting from a faulty premise. Many people who have little to nothing saved are not irresponsibly living it up now. Many are barely making it. I cannot tell you how many people I know whose financial lives have been absolutely ruined by medical bills. They don’t take vacations. They don’t live it up in any way. I know many others over fifty who cannot find a job to support them and their family. We know one man over fifty who has been out of work for over two years after a downsizing. He faithfully has looked for jobs the entire time. He now has a serious cancer (and still no job). It’s tragic. I know many homeschooling families who have been forced to give up their second income/career because the schools are so bad where they live or their child has special educational needs that the schools cannot or will not meet. Multiply that loss of income over twenty or more years. Unless the spouse who is working has a job that pays well with excellent benefits, that couple may never recover financially.
I think there is this narrative out there that people are squandering their money and not saving. While it may be true for some, there are many people who are barely making it or are falling deeper in the hole every year through no fault of their own.
Emily E. says
This is such a good point. Anyone who’s been laid off or hit with serious medical bills holds little chance of recovering to live comfortably, even if they are really careful and don’t make frivolous purchases. I used to work with an RN who’s husband had major medical issues, multiple surgeries, etc. and had well over a million in medical bills and that was what was NOT covered by insurance. She worked full time and did extra hours and is now retired and can barely walk. You definitely have to plan for tomorrow, but I see no problem with enjoying some times in the present. To me one of the most important things is to teach our live beyond their means and to always put something aside- even if it’s only a dollar.
Emily E. says
Sorry should have said “to teach our children not to live beyond their means…”
Dolores says
I believe in balance–save for tomorrow and enjoy life (within reason) in the present– it is called having a budget and adhering to it. Unfortunately a lot of people have no concept of that. Instant gratification and entitlement seem to be the mindset of so many. We are retired and have a comfortable retirement- pensions, Social Security and savings– but we still adhere to a budget. We also try to add to our savings each month and continue to live below our means.
Beth says
We are a little behind the savings game. I don’t think we will have 3 times our annual salary in two years when we are 40, but we will have a paid off rental house and a paid off primary house, and two paid off cars and about double our current salaries in savings/retirement accounts. I think that is pretty good…if we count the rental house value as investment $$ then we would be on track…
I think that personal finance should be taught in high school…I think we are letting down our kids by not teaching them about credit card interests, mortgages, stock markets, etc…
Lara says
Great point – I never know if I should count my rental properties’ values in what I have saved.
Meredydd C says
I think it all depends upon the relationship between the debt you carry and your income. I think these formulas don’t take in to account the car loan, school loan, taxes, minor and major disasters etc. If you are part of the working poor, your paycheck does not keep pace with prevailing costs. Add support of children in a single parent household and the thought of doing anything other than working becomes pie in the sky.
On a more positive note, putting aside money earmarked for a particular item or event can be as simple as putting your pocket change away at the day’s end. It isn’t much to start, but it is a start, and now is a great time to begin. Investments are great if you know what you are looking at. The point is that you have to chip away at the savings thing. It is rare that lightening strikes and you actually get rich quick. I buy lottery tickets occasionally and, of course, they hit for someone else. I could add those dollars that I spend to the jar instead.
In the end, life is about quality, and it does not always follow that having money adds quality. Given the choice of being rich or poor, I prefer rich, mainly because worrying about how my bills, loans, disasters will be covered each month is unnecessary stress. Money is a fabulous tool and wielded well and wisely, it can make your life and the lives of everyone around you run much more smoothly. Done with an eye to budgeting “fun” into your financials, you can have an occasional “treat” to provide a reward for sticking to your financial diet plan.
Gina says
We are on track. We drive cars that have been paid for years ago. Friends can’t believe I won’t buy a new one. It drives well! House paid for this year. Son’s college paid for.
My family looked down at our small home in a great neighborhood because we could afford a larger one. Since then: my sister divorced a was forced to sell hers, my brother foreclosed on his, my mom had to downsized not by choice.
I’m content with my small home and old car. I’m content with our happy 17 year marriage that began at a small wedding chapel, tiny wedding reception.
We have no credit cards. We eat at home most of the time. We are looking at getting long term care insurance.
Our grandparents were never a burden to anyone. Hopefully we won’t be. I feel rich because the bank does not own me. But if you are looking for me to impress you with a fancy car, fancy house, it says more about them than me.
I wish my mom didn’t live it up. She’s now had to give a lot up.
Jill says
I feel the same way! Love my old paid for car!
Mable says
I feel the same way, too. Add in friends who sneer at my $10 a month cell phone bill because I can wait until I get home or work to look something up on line. And no cable, more disbelief from friends. And although I don’t love, love, love my job it is okay and gives us both wonderful health insurance so I find ways to make the job more fulfilling. Husband works a job and takes side gigs to increase our income…We paid off our mortgage in 10 years and we are on track to both be able to retire and be free at 47. My regret is that I didn’t become frugal crazy earlier in life. I went to college on scholarships but wasted money I could have been saving. And, luckily, both sets of our parents were savers so won’t need us to support them in their old age. And I could not have done this if I had to struggle, like so many women seem to, with a partner who was not on the same page—that makes all the difference in the world.
Everlee says
I know this was posted a year ago but I’m glad you brought up the cheap phone
I got a smart phone finally when I had a baby because my old phone wasn’t working well and also a smart phone has been a very helpful tool as a mom
However all these years past people actually became upset and almost suspicious of me because I chose to save money
I made sacrifices and don’t regret it once
Now I am able to live in a one income home and life is so peaceful and simple until school starts in a couple years
Make sure you have great life insurance because you never know I can tell you that from personal experience
But yah live life simply and eventually you will have more security than most everybody else! It’s worth more than objects that have to be upgraded every couple of years
Angela @ Tread Lightly, Retire Early says
My husband and I are both 29 and shooting for financial independence by 45. While we likely won’t both retire then, we want to flexibility that comes with stable finances. I work with too many people in their 50s and 60s who are so unhappy with their jobs but can’t quit. If I’m working at that age, I want it to be because I want to, not because I have to.
We still live an amazing life now. We just have to pay more attention and be mindful of where our money goes.
Cindy Brick says
The struggle is that the people who really need to Do Something about your question…
are probably not the people reading this blog. Sad, but true.
The Brick and I both grew up in families that we now realize were modest at best, poor at worst. But we were always taught we’d have to work and save to get anything we wanted. That’s what our parents did — that’s what we did. (And I started part-time at age 15 in the hardware store, after years of babysitting before that. The Brick worked in the local A&P.)
Our two daughters followed this same pattern. One spent her money freely, but has come to see the light. Daughter #2 has always been more careful with her funds. I have great confidence that they’ll both be ok, Social Security or not.
Meanwhile, Husband has been retired for 2 years, at age 62 — and I (age 58) work when I choose to. We’re not fabulously wealthy, but we have modest savings accounts and a monthly pension. House paid for. One loan, because we bought a 5th wheel trailer last year that we’ll be moving into. (That gets paid off when the house sells this coming spring.) No other loans.
I only wish that I could teach these struggling people the tricks and methods we use to save money. If only they’d listen…but this is something every single person has to decide on — and take action — for themselves.
Diana says
It’s really shocking how little people have saved. I’ve never been comfortable with debt, worked from 15, all through college, paid my own way, ate ramen and hot dogs to save money, made do with what I had. Other friends took out students loans and bought laptops and new clothes.
One thing that I don’t think we can do though is generalize so broadly. Saying ‘the current generation’ doesn’t save, while our grandparents did, isn’t totally true. My Grandparents saved everything, built their own house, were the beacons of frugality. My husband’s Grandparents owed $100,000 on a house they bought 60 prior for $25,000 because his Grandma had to have the newest this and that. My husband and I (both in our early 30s) are very frugal, always finding ways to cut this and that, coupon, bump up our retirement savings with every pay increase, while other friends get a big new house, new cards because they deserve it and on and on.
I don’t think it’s generational, I think it’s a personality thing.
Marie says
Banks used to be the safest way to save. It was easily a no brainer. My alliance to savings began in the 2nd grade as a local PNW bank helped to teach us to save our pennies with their banking signs proudly displayed in classrooms, “Bank day tomorrow”, “Banking day today” etc. I never wanted to miss a deposit day. Even giving up penny candy at the local grocery when my brothers gorged themselves! I’m sure other saving institutions were “green with envy” due to my uncensored brainwashing. Soon my brothers began asking me for loans against my savings and once I pulled the “with interest” card they too discovered I was onto something.
When our society started to depend on 401s/offshore savings/money markets, we began to set ourselves up for continual reruns of the 2007-2008 financial cycles. Accounts only offer 10% FDIC (if that) for deposit insurance, if offered at all now. Interest rates/mortgage rates fell and savers looked elsewhere. I firmly believe that most people do not know who to invest with, how to do it, monitor it or verify the security of the offering hence “why bother”. Immediate distractions move into play and $$ starts to “buy happiness”.
I feel modified, diversified savings for your first home should be paramount. Your location should be closer to a major metro area for your job as you can not rely on “business as usual” for long anymore. Best investment over time anyone can make. Then, once you acquire equity, sell and trade up to where/how you really want to live. As they say, “They aren’t making land anymore”.
Educate yourselves people. Vote for candidates who protect our environment. Voice your opinions regarding big conglomerates buying up all of the small businesses and stay alert!
Judy says
Hear hear!
renay says
There has been this mindset for some time that the ‘government’ will take care of you. I just don’t get that. To add on to what Marie said, vote for candidates that put saving and budgeting as a priority. Some of us (not all) have become a nation of consumers and it has, IMO, created this live for today mentality. As my smart step dad says…use it up, wear it out, make do and do without!
Linda Sand says
When young we were frivolous and didn’t save. Fortunately our income grew enough to let us make up for that. At age 70 we’ve been living off savings then savings plus SS for ten years already and don’t expect to run out of money before we die. We are among the lucky ones who lived through the boom times and sold our last house just before the bubble burst.
Lorie says
I agree that it is not a generational thing. Unless you take into account that jobs, job security, unemployment, etc. has changed for this generation. My father worked for the same company his entire adult life and had great benefits and retirement plan. That is not very common anymore. Top executives jump from company to company, economic changes cause downsizing, and on it goes. I too know many young people who are not finding good paying jobs out of college. I know older people who have lost jobs due to downsizing or going out of business. And as technology changes so rapidly jobs become obsolete or become entry level instead, with entry level pay. The majority of people I know who have little savings are not the ones out spending it as fast as they make it. They are the ones living almost paycheck to paycheck just trying to keep up. Sad but true.
Sheri says
so I am almost 50..my annual salary is only just over $24.000 ( 11.60 an hr) $120 grand isnt gonna last long either.I had just over $100,000 in savings before I became unemployed …but one year with no income( didnt qualify for unemployment since I had some surgery and wasnt ‘eligible’ for work) and some medical expenses ( plus COBRA insurance rates) took around 20.000. so yeah.. it doesnt take long to spend money
I do have a small ROTH ( lost half of it in the crash of 2008..finally back to what it was before that) and the new job also has a pension plan but ..late getting started on that.
My parents built their house in 1972.Its a good sturdy plaster ( not drywall) split level with three smaller bedrooms, one full bath , living dining and small kitchen by todays standards..full unfinished basement and one car garage. It cost them $25,000 to build.
My first apartment ( 1994) was a half a farmhouse that I rented for $375 plus utilities. Same apartment he is getting almost $1000 a month for now. Yet when I was looking for a job this past year…first time unemployed since 1992.starting wages for most factory type unskilled labor ( I did horse farms since I as 19) starting wages were the same or maybe $1-$2 more than the $8 an hr I got when I started my last job in 1994..
So it isnt that we dont WANT to save .. I cant live to the same standard as I could 24 years ago making a few dollars more. Money was tight but I was supporting myself. Now I could probably barely make it if I had rent or a house payment , and needed a new vehicle.. all at the same time
Side hustles like ebay help but it isnt consistent. I am single and I do worry about what will happen to me when I can no longer work.
Lara says
I don’t know if know if it is ok to mention other blogs here, but look up Donna freedman’s blog. She has great advice for such situations
Sue says
My husband started investing when he got his first teaching job. We raised 3 children who all have college degrees. We retired from teaching started our own business, now after 20 odd years retiring again, we have two homes paid for, our cars are paid for. And we are very comfortable financially and I can happily say it’s because these investment were not touched for 40 years. To all younger people if you can no matter now small start with a small investment as it grows add a little along as you can.
SandyF says
My husband is great with money-me not so much.I worked of the Federal Govt, and he a city govt. We choose those professions for they retirement system, health coverage, and job stability. We are both college educated. We have always lived way below our means, cook at home, we have been able to travel because my job required travel weekly for years. We have been able to travel internationally because of saved miles and hotel points. I shared them all with my kids as well. We have a high amount of equity ( Southern CA real estate) and we have never refinanced. Our mortgage could be paid off but being so low-it is good to have some right off. Our property taxes are low as we own an historic home with a Mills Act contract. Cars paid off. No credit card debt. I have never felt that we didn’t live well, and even if I had tons of $$$-I wold still watch what I spent. I have not touched my savings plan from work, and live on our retirement from our jobs. I took an early retirement at 54, and my husband at 59. He had 30+ years, I had 25. We feel so fortunate. BUT:
We had three sons. My oldest recently passed away, after working so hard in college, doing all of the right things in life. He had a high paying job at NBC in NYC. So-that drastically changed my other 2 boys attitudes. My youngest is living life to the fullest-he lives with us, as rent in SoCA is so high. After the tragedy of losing their brother-they see life differently than we do…well, I have to agree as well. Life is short-balance is the answer. The fear they must feel and experience of losing their brother-changed their outlook on life. So-don’t be too frugal, don’t stop living and enjoying your life. Don’t regret not living and enjoying life. If you want to go somewhere-save and go. Experience life!! Just live with enough-but enjoy life!!!! Hopefully you al live a long and healthy life, but I say-Live it up!!
Sheila from Alabama says
I am so sorry for the loss of your son Sandy.
Torry says
Sandy, I’m so sorry for your loss.
Here is my story: when I was 7, my 6 year old brother died. I think that I have always felt like I was living for both of us. I understand the way your other sons are thinking.
While I was looking at life from the “What if tomorrow never comes” viewpoint, I had a little voice that reminded me that today had come. So I saved when I was in the Army. I married a saver and when we had children, I was a SAHM and we lived on only one income and still managed to save.
When our children were going to college, DH put me through college too. (That was the only time when we didn’t save and we had to get a loan for the year I was getting my teaching certification. I had it paid off by the time the next school year came.)
I am now a substitute teacher and he is retired. I recently went back to work (on Monday!) after 18 months off. (Back surgery and breast cancer) For most of that time, I didn’t have an income and we were just fine on DH’s retirement income. In fact, we were still saving. So I know we will be okay in the future. (I did go on SS about a year into the 18 months.)
One of my siblings always says I’m lucky. No, I worked my butt off to be where I am now. Deferred spending, he drove the same car until it was not worth putting money into it, I don’t drive, so we only had one car. Bought a small house and stayed in it.
Amy says
Absolutely we need to save for the future, even a honey bee “saves” for the winter. I know that some people are not in positions to save (I have been there myself) but many people are! We come up with the most amazing excuses not to.
Having the money come out automatically really helps because we then think of the transaction as a bill, not a choice. I don’t want to have to call my financial advisor to say I cannot make this month’s contribution because I squandered my money. We do still treat ourselves and enjoy what we earn but having a plan for the future helps us to enjoy what we have now.
We need to be careful about the “YOLO” lifestyle. We received bad advice from my step mother to take out $20,000 from our house equity and spend it on a 2 week trip of a lifetime as “you only live once”. That would take my husband and I YEARS to pay back if we had done it! But she was very serious, her first husband had passed away very abruptly and she had almost died herself. Moral of the story: even though we only live once we still need to live wisely.
I really recommend “The Total Money Makeover” by Dave Ramsey and his radio program. I just wish he had people here in Canada (our laws take issue with the “University” in the name of Financial Peace University), finding a competent and knowledgable investment advisor is the scariest part! I think that is a huge hurdle for many people for saving and investing- it froze me for years.
And yes, I think the lack of savings and debt loads are with the majority of people, not just to one age group. However… money management was not discussed or taught in my family, and this is something that we have to change at home, our governments cannot do that for us.
Best wishes for everybody as they start or continue their saving journeys! One step at a time my friends.
Lynne says
I hope I have enough put away that I can live on my pension, social security, and my side jobs, and leave the IRAs to my kid. I have zero debt; house & car paid for. But I fear that I will be out of $ two weeks after I retire and be a burden. The reality is somewhere in the middle I’m sure. But it drives me nuts to see people waste $ on “necessities” like mani-pedis, home theaters, expensive cable, $50,000 cars, etc. that’s just wasteful. I enjoy the balcony seats after arriving in my paid off car as much as you enjoy front row center & the limo. Maybe even more.
sharon says
When our children were growing up, we were always short of money. But my husband absolutely insisted that we put 8% of his pay away before spending anything. At that time the company would match half of it, so it was like making extra money for later. The children grew up, house was paid for, and we took our honeymoon. That was our first real vacation. We took many other vacations. Years later we are in the 75-85 bracket. DH worked until 80 as he loved his work. I wish that he had quit earlier and we had spent more time together having fun. At this time, his health is keeping us from doing much. My health is good and our savings are allowing us to help others and not worry about the future. Still we buy carefully. I’m glad we saved.
Krista says
This is a complicated one. I think that the relative ease of borrowing has made a big difference to the attitude to debt of younger generations. Banks are lending extraordinary amounts to people with little to no vetting, and I think that makes a difference. I think if an authority figure (say a bank, or loans for tertiary education) says “borrow money, no problem, just pay us back a bit at a time”, people assume that it’s not a risky thing to do.
I personally have always lived beneath my means, as having no spare money terrifies me. I’ve had a lot of housemates and friends though that don’t seem to have that terror though, and live paycheck to paycheck. I don’t know how they do it, but I guess you get used to it after awhile.
However, I find personal finance issues really scary though, and I’ve been a bit of an ostrich around retirement savings and other long term saving plans. The advice I got was either so simple that it wasn’t enough of a plan, or too specific for someone who like me who didn’t really know what I wanted in my 20s, or so complicated that they were incomprehensible. I’m just now at 38 working out what my priorities are. I don’t regret travelling as much as I have, but I do regret not being more intentional with my finances since I graduated 15 years ago.
Traci says
While my husband and I are finally (in our 50’s) in a position where we’re on track according to the recommendations, it is always in the back of my mind that my mom passed away at the age of 52 from ovarian cancer, and she didn’t get to enjoy the fruits of her & my dad’s savings for retirement. They always lived very frugally, planning for time in the future. So I try to strike a good balance of enjoying life now and saving for the future.
Marcia says
I think it’s pretty complicated. I agree with everyone who says “pay yourself first”. I was lucky that a college friend of mine ended up working with me at my first job. He introduced me to someone who could help me invest. So I started putting money into my IRA right in my first job, almost my first paycheck. While getting paid peanuts, paying off my college loans, and living in an expensive place.
So the things that I did that were not exactly normal for the time – I had a cheap old car (and I did not own a car until I graduated from college). I never ate out. I ate a lot of pasta. I had roommates, and I lived in a room in a cold, dank basement that was never warmer than about 55-60 degrees. I found a “gym” that was a local community center for $45 a year.
I did not vacation. I did not eat out. I did not party. I paid bills and paid my loans.
These days, it’s different, and in many cases – harder. College loans are higher. Starting salaries are about the same, adjusted for inflation. So you have more debt for the same pay. Expectations are also higher. Cell phones were not a thing when I graduated, so I didn’t have that recurring bill. Health care costs have also gone up. Vacations were also not a thing back then – not as much as they are now.
Even if you are frugal and save – a downturn like the last one where you are unemployed for a year or two or three can eat up your entire life savings. So can a medical issue. So in many cases, the difference between a family that is able to “retire” and not isn’t necessarily who was better with money – it’s who had the crappy luck to go and get cancer or get laid off.
But still, a fair bit of it is what we consider “normal”. Sometimes it’s worth reading books about life in the past – anywhere from the 1920’s until now, and see what people lived without.
Lisa MTB says
Less spending now = less stress today (i.e. truly living for today) and more money (and less stress) in the future. That’s my stance, anyway.
Christine says
I have always wanted to save a lot, but my husband wanted to have great experiences. We compromised and did some of both. I have been the major breadwinner for about 30 of our 40 years of marriage because I was more focused, wanted to have management jobs and he wanted to teach or do some other type of service job with no interest in managing. Frankly, sometimes he wasn’t very practical and wasn’t nearly as persistent as me, so I out earned him by quite a lot. But he always was a hard worker and very focused on the family. When I had a lot of business travel he was always a real trouper with the kids. So we have done some smart financial things and we have done some not so smart. We paid for both our kids college educations – because even good students don’t get much help if their family income is higher. And we are the so called “millionaires next door” with a middling house that is paid for and older cars that are paid for and comfortable retirement savings. We have done lots and lots of traveling and plan for more in retirement that is coming soon. Overall, I would probably make most of the same choices again. (Though we have helped the real estate industry too much by owning 9 different houses.)
Emily says
Social security was created as a safety net for those who didn’t have enough saved for retirement. It’s hardly fair to say that millennials created the tendency to spend rather than save. If anything I would say most of my friends talk more about paying down debt and saving for the future than my parents’ ever did. It is probably a combination of the reality of living with staggering educational loans and the increased loss of the stigma associated with talking about money.
Kimberly says
Although I would agree with the idea, in theory, in reality it’s not so simple, at least it wasn’t for us. We are totally debt free by God’s grace (including mortgage). We even use cheap pay as you go phones. We are super frugal. However, after a series of layoffs, including one that started without warning, showing up at work to find it boarded up and the last two paychecks bouncing (this was about 17 years ago)…well, that’s where it gets complicated.
The cost of living, even if you’re frugal and not buying the latest iPhone, is zooming out of control faster than wages. My husband makes less now per year than he did 20 years ago, and yet the cost of living is higher. This is not due to laziness or stupidity, but just how the market is. He tried to apply for educational opportunities to change fields, but we didn’t want to go into debt, and no programs were available to help us as we fell into some hazy middle ground.
He is now 50. We have $5000 saved for retirement, plus an emergency fund we just depleted with a car emergency. Now that the kids are older, I’m back at work, but after 20 years off, my bachelor’s degree is obsolete. I make a little more than minimum wage, working part-time as that’s all there is, while slowing building my business at home.
so when you hear about people who have “nothing” saved…we’re not all out spending money lavishly with a carpe diem mindset. Some of us work hard and save what we can, no matter how small that is, while the world reminds us our sacrifice is not going to be enough.
Our only hope is if one of us dies young, so the other gets to live it up with life insurance.
michelle says
My heart goes out to you. I see so many people in the food bank lines who are where they are through no choice of their own– and it is always either medical issues and bills; employment opportunities and jobs vanishing; or more often than not, both. Poverty comes in many different faces, in many different ways.
michelle says
I’ve lived on Social Security Disability for 20 years for health reasons– believe me, if you have a choice, save, Save, SAVE! Social security is no way to live. I am now 48. My dog and I get by with a food pantry card (which we can use 1x/month at a local church), $15 in food stamps a month, and income less than $1,000 a month. (That’s just $120 above the federal poverty level in a year.) I make monthly payments to at least 8 doctors, in addition to regular living and vet expenses. It is amazing how little money you really can live on; but I don’t advise it for anyone. Anyone who has a choice or who really understood what it means, would never choose to live off of social security alone. Yet that is what so many people do by not saving.
I am thankful for what I do have and for Medicare– but I so wish I had saved money for the possibility of disability or retirement when I first started working a “real” job in a restaurant at age 13, all the way through 30. Even that little bit would’ve helped. But I thought then that I “couldn’t afford” to save anything. Nor did my parents ever teach me to prepare for it. It is so not true that you can’t afford to save. The truth is, you really can’t afford not to. Take it from someone who knows. Save anywhere and everywhere that you can for your future, because you really don’t know what it holds.
Lolly says
There are many people who’ve mentioned not vacationing….or living life like it’s a free for all. We fall in between those….well, kinda….but travel is important to us, and always has been. When dh was an army private, making $12k/yr, we lived on that. We had a cheap, used car. I budgeted for groceries, and cooked at home. After paying bills and setting aside $ for food and gas, we could sometimes go out after payday and see a movie (on base….cheaper), or maybe buy some street food at a vendor (we were in europe at the time). I often had babysitting jobs, and that money allowed us to travel frugally. We didn’t go on week-long excursions, but traveled for a night or two. Once we stayed for 2 nights with friends in another city, then drove to our next destination. We had a VERY LIMITED amount to spend for 3 nights, 4 days for food and lodging and any entrance fees….but we had a BLAST! Another time we went with friends and drove all night so we could spend the day in a large city, then drove home all the next night….25 hrs! It was crazy, but we were young and broke, and our only cost was gas and food. It’s been 20 yrs and we still talk about that trip!
We just got back from camping with our kids….2 nights, 3 days. It’s dh’s vacation this week. We normally take our 1992 rv (paid for with cash), but it was in the shop (rv’s ARE kinda expensive….even paid for ones). So we grabbed our tents and packed food, and spent $44 for two nights on a lake with amazing views. I brought food from home for us to cook. We DID eat out for 2 lunches, at a sit down restaurant, which was not a necessity, but was within our budget (we COULD HAVE packed sandwiches, if the budget had been tighter). We paid $45 for a teen to feed our animals (dogs, chickens, pig) while we were gone. Gas….idk how much for gas….$30-ish, and we paid $8 for ice. So our NEEDED expense was $130 to get away and relax and enjoy our family. We could’ve stayed at a closer campground, and not spent as much on gas…..we could’ve paid $13 for a tent site, vs $22 for an rv site with electric and water (but when it’s 90° during the day….a fan is a lovely, lovely thing!)…and we could’ve packed lunches for our trip to and from. And still had a wonderful time away from everyday life.
Another vacation we did when our oldest was a baby was a trip to Orlando with friends. They paid for lodging, and we paid for food. We went in late September….so off-season for the house….it cost $600/wk, sat-sat, with 5 bedrooms, 4 baths, and its own pool. We paid $400 for food for all the breakfasts, snacks, lunches, dinners, and desserts for 8 people….and went home with a TON of food, lol. I don’t remember how they got their disney passes…I THINK they were leftover passes from when other family had gone (back then they were swipe cards), and had leftover days on them. They went to disney 2 or 3 days, and were gone from open to close, making and bringing along lunches and snacks. The rest of the days they lived in the pool, and watched tv, and played tons of games! We weren’t planning to do disney at all….it was well out of our price range, but a family member knew a person whose parents worked there and had extra free family passes….so we went 2 days, I think? We ate out at epcot for two meals (within our budget), and ordered pizza one night when the other family was gone. *I* wasn’t used to cooking while on vacation back then, and wanted a break. Looking back, we should’ve traded off nights for cooking, instead of both helping each other with every meal. It would’ve given us a break.
Other vacations have been with family, with parents paying for the place (once a sibling had a free week at a timeshare that someone couldn’t take), and everyone pitched in cash for meals. Each adult takes charge of cooking one meal, and they clean the kitchen for one day during our visit (for lunch everyone makes their own). Lesson learned from the trip with friends, lol. They plan their meal and I buy the groceries for the trip, and we divide the cost by person (including kids…though not babies, lol). Once us siblings and our cousins got together and rented a place for 2 nights. It cost $50/person, including all meals. We had a huuuuge house, lake access, and tons of fun!
Dh and I vacation off season. That $1500/wk beach cottage is about $600-700/week in the off season. It’s plenty hot still in september, after labor day! The beach is also lovely to be at during winter months…it’s different, but nice. The florida condos (rentals) often have heated pools….so even when outside temps are 60’s, the water is warm (for kids….mama is snuggled in a sweater with towels wrapped around her, lol).
Most of our vacations for the past 3yrs have been in the rv. We have a monthly budget for repairs and maintenance. I plan all our meals for our trips and pack that rv FULL with food. We might go for 2 nights, a week, 2 wks. Rv sites tend to cost around $28/night. That + gas to get wherever are our costs for our trips. We once spent a weekend in Atlanta (no rv, hotel), and for 2 nights it cost us $1000…hotel, gas, food (bfast was provided), parking, marta, and entrance fees. (It was a budgeted for trip.) We left the next month on an 11 day rv trip….and maybe it cost $400….for gas + rv sites. I brought food from home, and that was covered in our normal grocery budget. So we prefer the lower cost + longer stay of traveling in our rv. Plus….beds are known and comfy! 🙂
We also have done vacations where we just stay with family (or friends). Those (with family, esp) tend to get a bit stressful….staying no longer than 3-3.5 days is the key, lol!
Anyway, we’ve done vacations on all sorts of budgets….but mostly we try to keep costs down. We don’t need to spend $1000’s on a fancy vacation once a yr, but would rather spend less overall, and get time away most long weekends! We scrimp and save in our regular budget SO THAT we CAN do little trips here and there throughout the year. We don’t eat out very much. We have a smaller grocery budget. We have super cheap phones and no contract ($40/month for each of us…yes, we have smart phones…not a NEED.) Dh works a 2nd job. I sell books online. These things extra things help us to save some $ for some fun later. (Dh also fully participates in both his jobs’ matching 401k plans. We’ve been able to save more in an emergency fund in yrs past….but the unexpected came…and we’re still working through a bit of that.)
We have friends with a smaller budget who tent camp on family property. Sometimes they pitch a tent in their own backyard. Their kids are littles, so being close to home/family when camping is easier, lol….in several cases a child has ended up indoors all night with a parent, while the rest stayed outside. 🙂 They sing, and have campfires, and roast weenies and marshmallows…and have a blast for a night or a few. It costs them time to set up….and a wee bit of gas when they camp near family. Esp when near family….they get the time with loved ones WHILE still being separate, and their own family. They enjoy that.
Angela W says
Thanks so much for all of your amazing advice. I thought I’d share a podcast I’ve been binging on. Optimal Finance Daily. The host, Dan, reads from great financial blogs each day. I’ve learned so much in the past two weeks! I’m at around #250 out of 450. Hoping to have them all devoured in a month. I definitely use the “speed up” feature in the beginnings. It saves about 1.5-2 minutes of hearing the same thing each time. Anyway, check it out! Thanks again for all you do!