Good Lord, I wish I could take 65% of my money and save it. How much money is this guy making a month to be able to save $10K in 3 months!?

This is pretty much the same approach my wife and I take to retirement planning and savings. We usually reward ourselves with about 10%-15% of what we put into our retirement account annually (this is only for the amounts beyond her maxed out 401K and my maxed out SEP).

People are free to live however they want but I've always felt that too many of the "extreme" frugality blogs focus on saving money for retirement at the complete expense of living today. Maybe we'll retire 5 years later but I can guarantee that we're going to have a better time getting there. As with everything there needs to be a balance.

Tell this to people that don't make roughly 75k a year how easy it is to save up to a point where buying something that they would like wouldn't be a huge dent in their account or take much, much longer.

Its skewed thinking from people that are already making a very good living that rewards like macbooks and plasma screen tv's are "small rewards" and should be done on a quarterly or more basis.

i make an average living... but unfortunately, i racked up some good debt in the past 2-3 years... so right now, i'm paying my mortgage and trying to pay off my credit card debt...

i promised myself that as soon as i pay off my debt entirely, i'll buy myself a nice apple powermac as a reward (using the money i was previously using to pay off credit cards)...

its an incentive for me not to charge anymore... and thus far, it has worked... i know i need a new computer, so every time i go to charge something, i know my new computer is just being pushed back a month or two

Ha, just wait till it's time to buy a house and have kids.

Good point dashthehand

I make hardly any money. For me a "Small Luxury Item" is a bag of gummy worms, not a MacBook. I have a MacBook, but it's probably the biggest ticket item I own.

(My MacBook is worth more than my Car for instance)

Yeah, this is lousy advice for those of us that aren't inching towards upper-middle class.

I'd be saving, too if I earned 5k a month. So far I'm just breaking even.

holy shit, I need to either make a LOT more money or go live in a shack. 65% savings? $10,000 in 3 months?

Ha, it appears that most of us posting are just breaking even with our income... besides my 401k, i'm only able to save 200-300 a month

Interestingly enough, he doesn't make any contributions to a retirement plan... or at least he doesn't consider that a necessity above a MacBook or guitar amp.

If I was making enough that only 35% of my earnings went towards my debt/living expenses; I wouldn't have an issue saving, period.

This is a good idea after you've learned to manage your finances, but by then I don't think too many people would be putting the effort into saving just to blow it all in one fell swoop.

What was the point of posting this? To point out about how money you can save when you're making tons of money? Well, DUH! It's easy to save when you don't have to worry whether you can pay your rent next month!

How about some advice for the normal people? K, thanks!

Seriously, my rent alone is more than 40% of my take home pay. After bills, old debt, student loans, current student tuition, books and food, I feel lucky if I can reward myself with a $50 pair of shoes every three months for just living within my means.

Obviously Andy is making some good money, but the same principles can apply even if you make less, just adjust the numbers downwards to fit your personal finance situation.

@Ben Popken: Good point! So once I save 100 bucks I'm buying myself a snow cone! (It's winter time so all I need is the sugary liquid... hmmm... sugary liquid!)

Yeah, this post is sorta gay. I DO follow this mindset but... I mean, it's well-known that money begets money. If you HAVE money to save, it's pretty damned easy. It's much harder to save money you don't have.

Between me & my fiancé, we budget to "save" about $1200 a month, or a little less than 20% of our income. We don't live beyond our means, as we usually hit this mark or exceed it slightly on months we don't "splurge" on something (last month is was MacBooks - bad, BAD month).

The problem is, unless you're just a twit, your living expenses are going to be relatively stable below a certain point, no matter the income. This is the problem poor people have; they NEED to eat and have a roof and a cheap car to get them to work to earn their peanuts, but most of those peanuts go to pay for those very same basics, and they don't even have the ABILITY to save enough for a rainy day... It's a trap, and unfortunately, our economic system is such that it's simply not possible for everyone to be able to save their way out; we NEED someone flipping those cheap burgers we refuse to pay more than 99¢ for; we NEED cheap labor to produce cheap merchandise we're not willing to pay another dollar for.

It's a sad situation, but the fact is that most people's riches are earned by taking the worth/profit these people are not paid. I know that's a very Marxist view, but there is more than a hair of truth to the statement regardless.

As soon as I read the first sentence about saving 65%, I knew EXACTLY what the comments would be, and they are absolutely right. Of course there are plenty of people who make high 6 figures that can't (or don't) save even 10% of their income.

The article is grossly misnamed -- it explains what percentage the guy saves at, but not HOW he achieves such a high savings rate. Maybe he has no rent because he lives in his parents basement? That ALONE boosts savings by a conservative 30%. Maybe he is very frugal and disciplined -- no lattes, no CC debt, no car loan, minimal eating out... A high salary is a possibility -- netting 5k/mo equates to roughly $3,250 saved and $1,750 spent which explains the $10k in 3 months.

I make ten million dollars a month after my living expenses and tax and my savings plan is as following: I contribute 9.9 million dollars a month to my savings account, and spend the other 0.1 million on little toys every few months like a Ferrari or a new jet.

Saving is so easy.

Coming tomorrow - a testimonial from Lebron James on how he is able to save 99% of his gross by only buying summer homes/Italian sports cars every two to three months. Summary:

1. Apply downward to your income.
2. ???
3. Profit!

@randombob: I agree, people like to paint it as if everyone can escape a poor lifestyle, but somebody has to end up on the bottom, even if we were all educated, etc.

yup, if you are making 40k a year (which would be halfway decent) you could do what this guy is suggesting maybe every couple years

Minimum wage and you would never ever be able to do what this guy is suggesting.

Well when you make enough to save 65% of your income you can do stuff like this. Most people, even people who make decent money, can't make ends meet if they save 65% of their income. For those people saving 20% or 25% would be a great goal, although they probably wouldn't be able to buy so many fun toys.

@selectman: HERBERT!!! RIP, buddy, RIP.

I also laughed my ass off when I read this. Single people are so clueless.

@Ben Popken: Ben's right. Instead of contributing 65% of your after tax earnings to a savings account (apparently unrealistic for most Consumerists), then perhaps 5-10% of your after tax earnings would be easier.

And setting it up for automatic deductions from your bank into a high yield savings account such as ING would be even better. Eventually, your $50 a month will turn into $500 in a year, in 3 it'll be closer to $2000... it's possible to get that MacBook or guitar amp on a pulper's pittance, it just takes longer.

It's just a snub when the article is written by someone who can achieve in 2-3 months what most of us would need 10 years to do.

@to all the whiners

When I do the math, this guy is earning between $61-92k/yr, which is a very nice income. That being said, if he's being honest, his entire monthly expenses combined are less than $1800! I've got a wife and kids, and our combined income is similar, but our expenses are nearly twice that, as a result our savings rate is well below Andy's.

While the savings is a mostly impractical goal for the rest of us, and the gift idea would need to be scaled down, I'm most interested in what ways Andy controls fixed monthly expenses.

65%!!! I'm seriously lucky if I can save somewhere around 10%-15%, if anything, and that's with the absolute BASICS (rent, cheap food, heating, etc.), and I don't even own a car! A rule of thumb might be: if you can afford to save %65 of your income, your financial advice probably doesn't apply to people who actually have really shitty finances.

Did the consumerist population take their stupid pills today? Use some critical thinking - if a $1000+ reward every quarter is outside of your budgetary realm of possibility, scale the numbers down! DUH!

The point is giving yourself an occasional reward to keep you on the straight and narrow (also DUH but at least worth reiterating occasionally). This is also important when you are dieting.

I do the same thing...except it's usually something in the under $50 range. I tell myself if I can go 3 months without any frivolous spending or having to make an unexpected large purchase (car or home repair for instance), as a reward to myself I can get something off of my list. Works great.

While I've been fortunate enough to avoid being on the "struggling" thus far so I don't know "how it really is," I have a tough time beliveing that anyone able to cover their living expenses is doing so to such an exact margin that they cannot squirrel away even a few dollars each month.

@Troy F.: I agree 100% with the sentiment of rewarding oneself while attempting to cut back on expenses, unhealthy food, etc.

However, this guy comes off as a tad self-involved in describing what works for him. It seems he has little understanding of how much better equipped to save he is than the majority of folks.

@Ben Popken: You can it can apply to those making a lower living, but honestly most people can't afford to set aside 65% of their income in this manner.

I make a very decent income, but I'm lucky to be able to save around 35% a month after rent/utilities, etc.

@selectman: Seriously. Thats what I like to call kind of a, "John Fitzgerald Page" kind of attitude.

The article would have been better if no money amounts were ever given since that is what people seem to be focusing on.

Think of it as I am able to save X% of my income once I hit my goal of $X I spend Y% of it on something for me to celebrate reaching my goals. Then repeat it.

@Eyebrows McGee:

Don't sell the man short, sometimes it only takes 2 months to save the $10k.

@DashTheHand: So in other words you're pissed at him because you make less than he does? What does that have to do with it? He's saying, put more into savings than you take out, by a lot if you can manage it. It doesn't matter how much you make. It's the principle that counts.

He's trying to pass along his suggestion to others since it works well for him and all you people can do is whine that you want his "rewards"?

Maybe you should look into how to get a better-paying job instead of bitching at him for trying to give good advice.

(note: I don't make that much either but I think whining is uncalled for).

@YeaYuh: It seems that yet again it's the "blame the victim" attitude, when we attack the poster for something instead of actually address the issue at hand.

Seriously, there's a lot of haterade being passed around today. You jerk, you have a well-paying job! How dare you attempt to share your story of how you save money with other people who may not make as much money as you! We're going to find your penthouse in the sky, Andy, and burn it to the ground as we wave pitchforks and other farm implements! Your chardonnay and expensive audio toys won't save you now!

Cripes, people, act like you got some sense. Maybe you should focus on the point rather than being offended that someone makes more money than you. Establish savings targets for yourself, based on your savings ability, and reward yourself for meeting those targets. In the meantime, don't blow your hard-earned dosh on fripperies that will just end up unused once the fad is over.

Maybe your reward is a $50 gift certificate to Starbucks rather than a guitar amp, but it's still incentive to save. Don't hate the player...

While the article's premise that it's ok to splurge once in a while as long as one remembers to save is a good one, the example could have been better.

Since the whole point of splurging is that you won't feel too deprived and thus lose your motivation to save, I'm sure the plan is working out wonderfully for Mr. Alt. However, for those whose incomes do not allow for 1K splurges every few months, the satisfaction that can be had from splurging (on the same stuff) would be few and far between. Thus, the efficacy of this strategy depends to a large degree on one's income level and what he/she wants to splurge on (macbook vs. a dinner out).

@SBR249: No hate intended

I crunched the numbers on my income. I'm a single mother who takes home $1288 a month, w/ $268 in child support. I crunched the numbers, 65% is $1011.40. 35% is 544.60. My rent is $500 a month. That means I need to live off $44.60. I have a cellphone bill, internet bill, car insurance, kid's health insurance, and minimum payment on a dinky credit card. Srsly, how about we make examples off people who have very little money to work with? Guess I'll have to tell my triumphant story of receiving $35 for opening an ING Orange account.

@YeaYuh: No the problem is that this article was written with wealthy, highly paid, non-everyday consumerists as the "standard." The reader is "single" as stated that he has a girlfriend, most likely has no kids, and unknown on his living condition. Most likely paying a rent or sharing one which keeps his monthly expenses low. He makes ROUGHLY 70-80k net a year when he states his savings and how much he entitles his treats. That is called doing very well in any regard.

The biggest problem is that people making much less still will have roughly the same living expenses, except that now the percentages are very different based on what can be saved and what MUST be spent to survive. So now you increase the time between "treats." This also increases the likelihood that you will need to dip into your savings for emergencies such as car repair, sickness, injury, replacing an appliance, etc, etc. That in turn makes the already small amount of savings you were able to put into your account even less, which includes less earned through interest, which ends in you being able to buy something SIGNIFICANTLY less cost or value in a MUCH longer time frame.

All in all, this article is a pipe dream for many people. Its something we all wish we could do, but the "splurge" isn't really a splurge when it equates to buying a DVD every 3 months instead of a laptop or similar.

@Buran: I think you misunderstand the majority of commenters. If I was to talk to a single mother waitress about her money problems, don't you think she'd be offended if I told her I just did what Andy does (implying that the difference in our incomes was negligible and all that's important is that she follow the scaled down plan)?

It's fine in the company of fellow high income professionals, but a slap in the face to those who can't dream of 65% savings or quarterly rewards of $1000 or more.

@randombob: Calling a post you disagree with "gay" is soooo middle school.

Seriously, as a gay, I think it's fair to call you "lame".

OK, enough name calling.

For all we know about this guy, he could be willing to live in the rough part of town and eat mac and cheese to save his 65%. People make choices. It's not productive to complain about how high your own expenses are. They are YOUR expenses, so you can get them under control!

Additionally, I remember my first job out of college, where I made $17,000/year (in 2000, in a major metropolitan city), and I was still able to save $8.5k in ONE year, while paying all my bills and minimum payments on students loans. No help from anyone. Yes, I did work extra jobs. It sucked, you do what you gotta do.

Clearly, andy is an althole for making so much dough.

Good for him on not spending every last cent of it on crap. I would hope he has a competent financial plan and/or advisor; with that sort of scratch to play with, andy should not be simply "saving", he should be actively creating wealth.

After his savings cushion is comfy, he should be owning apartment buildings, not having big bank accounts.

I think part of the problem is that the lower your income bracket, the less you can save. It gets to a point that whatever you can manage to save is just enough to cover, say, an unforeseen emergency, and won't be going towards any kind of splurge (no matter how small).

However, just because this is the case for some people, it doesn't mean it's the case for all. Just like it's not the case that everyone can save 65% of their income. The bigger lesson is that if you *can* save, treating yourself every now and then is feasible.

This particular example is just, well, kind of distasteful to a lot of people -- probably because of the numbers and rewards involved.

@Troy F.: I *did* scale it down.

Hence the "Bag of Gummy Worms" comment. :P

I wasn't mad at how much more money the guy made than I did, I was just commenting on how dirt poor I was (well, I take that back - I was dirt poor back in 2003... now I'm living at a subsistence level. :P)

I understand where he is coming from. My friends were surprised to find i have alot of money. I follow the same principle. but i don't do the thousand mark. I do it, for every 4K which takes about 2 months minus all expenses.

My rent/internet and phone bill come out of one weeks pay check with room to spare. I allow myself to spend about $50 a week on shits and giggles.

Its a habit to get into but once you get the swing of it its not hard.

I was able to give my mom $1500 for christmas and buy nice things for my friends and family.

I should also mention that, in order to save, you must have money. I had a bad job before and i lived from paycheck to paycheck even though i didn't have any large expenses.

The problem with this post is its misleading title, and how the editor obviously doesn't know his audience. Commenters aren't whining about the poster, they're upset about the example he gives and how it's completely infeasible for many lower income people. Come on, this is The Consumerist, not Forbes.

wow. there are a lot of jealous and angry people in this thread!

the strategy can be used by adjusting it to your situation. reward yourself when you meet a goal of savings. it can be that delicious snow cone, as someone mentioned. delicious sugary liquid.

there will always be people out there that are wealthier than you, smarter than you, more attractive to you.... ETC

Apply this to someone who is single, living alone, has FSA and 401K already taken out of their check, no debt outside of a car payment (used car at that) gets paid twice a month, and who's rent is half of her take home and THEN I'll be inclined to listen to someone who's expenses are apparently less than mine.

Two things:

1. Why is there no mention of retirement accounts? Sorry, but with the Fed dropping rates, it's not a good time to be sticking tens of thousands of dollars in a savings account, Andy. You might want to diversify to avoid losing a good deal of your money's value in the next few years.

2. Scrubs!? I thought you said you did something fun every week, not something that's torture.