Are we saving enough?
I’m 26 with 3 YOE, married. We currently have about 175k outside of retirement, and another 115k in 401k+HSA, but also ~28k in student loans (I’m not paying them off right away cuz google matches student loan payments2.5k a year so I wanna maximize that) Currently have a ~340k household tc ( +\-10k depending on how google stock is doing) and trying to save for a house. Outside of maxing out 401k(just me) and HSA, our budget has us saving around 75k a year. So total including those and company match is 116.5k a year. This number seems pretty big obviously in general, but our take home pay after deductions, retirement and whatnot, is roughly 210k, which means our spending is quite high too (~135k a year). Part of this comes from high rent, which is 4.1k a month, and 1.3k for car + insurance payments. I also have private piano classes I take, 420, and a fancy gym membership, 270. I also have some student loans I’ll have to start paying back soon which will be ~300 a month. Beyond this, we have a pretty high eating out and grocery budget which total 1.8k a month, and then random stuff like utilities, streaming services, shopping (nothing fancy usually, mostly shop at like Marshall’s). Finally, we’re a young couple and want to travel a lot, so we have a 15k travel budget a year. I’m probably missing a few other things or one time items but this mostly covers our general expenses. Obviously there’s a lot of places where we could cut spending pretty easily, such as our food budget, piano lessons, gym, and travel budget. That said, if we can maintain our lifestyle and also have good savings that would be awesome. So my question is, are we spending too much, or is this enough savings that we’re ok? From purely a saving for a house point of view, we should have enough for a 20% down payment on a 1-1.5m home and leftover cash in 2-4 years, but I also see people at 27-28 on blind with a 500k-1m net worth and we’re definitely a few years away from that.
Are you renting a house or an apartment? 4.1k for an apartment sounds high, much rather buy one
Renting an apartment. Yeah agreed it’s high, but it’s a 2 bedroom in a really nice safe area, has in unit washer dryer + 2 parking spots, which we can’t get for much cheaper where we live without moving to a less nice neighborhood. I frequently look at other options for renting and this place is consistently the best deal we can find that has everything we want. I agree we should buy, but interest rates make that difficult right now, so our plan is to save for a house right now and stay in our apartment for the time being. It’s also rent controlled so at least we know our rent won’t be going up too much.
If you’re in a VHCOL, 4.1k for a 2b is perfectly fine imo. A studio or 1bed in that same complex probably runs you minimum 3k, upwards of 3.5k I’m sure. Buying with this interest rate doesn’t make sense especially for your household TC.
What city are you in? I’m currently running into the same dilemma as well. I say you are both doing fine, not like you’re in debt or anything. You’re also 26, so young! Might as well save on the side while enjoying life.
We’re in LA
What neighborhood in LA are you renting in? Just curious what is considered “safe”
You are doing well. I am 7 years older than you and definitely a loser
You really aren't. They're doing exceptionally well and this isn't normal. I'm 20 years her senior and am glad I was child-free and out taking drugs at festivals at her age.
optimize for life, travel, have new experiences, exercise eat healthy , you are saving great, once you become a parent things would change dramatically, I would live it up, you are not going to be 26 again :) …and ditch that piano if you can, cut eating outside budget by 20% and use this saving for couple cooking lessons or travel. I would also rethink about car spending, it’s a dead weight you are carrying around.
Yeah this makes a lot of sense. I go back and forth on the piano every month lol, it’s a lot of money but it’s also a fun hobby. Definitely the easiest place to make a change in though with a pretty big impact on savings. I think cutting food budget by 20% is pretty reasonable, I didn’t realize how much we were spending on that until I really went through of historical spending, so that’s a good suggestion. Car spending is tough because insurance is super high because I’m a new driver, so our insurance alone is 720 a month, although that should quickly go down in the next couple of years.
720/month 🤯 that’s highway robbery
1800 on food is a lot imo but if you enjoy going out and the food is worth it to you do it. Personally I prefer to cook and enjoy it so that’s one thing I’d change
Yeah someone else also said cutting by 20%, I think that’s reasonable, thanks for the suggestion!
Regular folk would get a heart attack reading these posts
What in the subtle flex is this post
I swear I’m not going for that, that’s why I posted on blind since there’s lot of other tech people with tech salaries (340k for 2 people isn’t high by blind standards) I was worried that we’re being dumb with our money and needed to save more.
Nope, you should be saving at least 400k per year to be safe
Really? How much should one make to be able to save $400k!! That’s way too much!
Or they're simply trying to make sure they're allocating their high income budget appropriately. Nothing wrong with that. High income does not automatically equate to financial know how. OP is doing the smart thing and asking the community for an honest assessment.
I’m calling bullshit on “honest assessment”.
Your 20s are really the time to save and invest. Compounding needs time to work; you will get the most out of the money you put away now
🤢
Fine, don't let your money work for you 🤷♂️
Up to what you care about. The people with higher NW spend less - they prefer the higher NW to the nicer things you’re buying and that’s ok, as is your decision. Just make sure you are being deliberate about what you do / happy with your own tradeoffs.
Good advice.