What You Get If You Start Saving Today

A lot of people probably made “save more money” one of their New Year’s Resolutions. It’s true, the best day to start saving is right now. Based off of what the average American spends annually, if you set a goal for next January and save $157 a month, you can have all your clothes paid for for the year.

Or set a goal of December. For $50 a month you can have all your holiday gifts paid for. Or for just $20 a month you can save up everything you need for back-to-school supplies.

Use that little 2% payroll tax freebie you just got and start putting money down in the bank.


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  1. Loias supports harsher punishments against corporations says:

    Don’t get me started on that 2% tax rebate which just screws our retirement system.

    • Bsamm09 says:

      What retirement system?

    • dolemite says:

      I’m thinking of taking that 2% and putting it into my 401K. That way, I’ll actually get the money back when I retire.

    • Nigerian prince looking for business partner says:

      I’m using that 2% tax rebate to help offset the 19% increase in my health insurance premium.

      • synimatik says:

        You got off lucky, mine went up 23%. The ironic thing is my wife is a doctor. She IS health care and her health care coverage stinks out loud.

        • Nigerian prince looking for business partner says:

          Wow, that really sucks.

          My company dumped the dental and vision plan and it still went up 19%. It really sucks spending over $1,000/month to have a $5,000 deductible.

        • flip says:

          actually, shes NOT health care. She’s an employee of the hospital.

    • Fumanchu says:

      Yeah, I don’t get this comment either. The 2% rebate goes back into the same pocket that the Social security money came out of…. so if you want you can dump it into a 401 k or the bank and save it for retirement. They are basically allowing you to decide how you should use 2% more of your own money instead of having the government dictate how you use it.

      I will gladly let them give me all my money back and they can keep their “social security”.

      • Loias supports harsher punishments against corporations says:

        Weather you agree with the Soc Sec system or not, we as a nation are currently committed to it. My money goes towards it. Unless that changes by law, don’t fuck up my retirement! That 2% rebate is 15% of the entire Soc Sec funding. That’s an incredibly stupid thing to do.

        • cmdr.sass says:

          The sooner the social security system collapses the better.

        • Fumanchu says:

          If I don’t contribute to social security I would be screwing my retirment not yours. The amount of social security you draw is directly tied to how much you put in. It basically is the same execept they adjust it for inflation. So despite what some people will try to tell you the social security system isn’t going bankrupt becuase their are more old people, or people are living longer its due to the rampant inflation of the last 30 years.

          If you want your retirement to be saved and social security to not go bankrupt tell congress to get rid of the fed and acutally dictate monetary policy like they are constitutionally obligated to. Also a return to some kind of standard (doesn’t have to be gold) would be nice instead of fiat currency.

    • Alexander says:

      If you are young, forget about social security. Take care of your own retirement.

    • zzyzzx says:

      I’m going to take that 2% and increase my witholding by that much.

      • hansolo247 says:

        Why increase it?

        I actually decrease my witholding and pay the difference by check mailed April 15.

        Getting a tax refund is like loaning a buddy a dollar and having him pay you back 98 cents 9 months later and calling it even.

    • Illusio26 says:

      I’m pretty sure the 2% is getting back to social security from somewhere else, so they are not missing out.

    • Dan the Librarian says:

      The reduction in your Social Security payments (2% of income) is being replaced by general revenue. Social Security was self-sustaining, and is now being paid for by debt.

      If we eliminate Social Security, we’re not just hurting young people. Those who are currently receiving it would also lose their monthly checks. Unless current young people keep paying to fund those now in retirement, but don’t receive anything in the future. Minor fixes to the current system would keep Social Security self-sustaining well into the future.

  2. kiltman says:

    2% tax freebie – Making work pay = Jack Shiat!

    • catnapped says:

      Yup…I got a nice tax increase! WHOOOOOO!

      • Anonymously says:

        If you worked full-time (2000 hours) at minimum wage and are single, the Making Work Pay credit paid out at 2.76%, so you’ve lost 0.76% of your income. That’s $110 or 5.5 cents / hour.

  3. FatLynn says:

    I know my credit union and many others have “holiday savings” accounts, where you get a higher interest rate, but can’t take the money out until December.

  4. dolemite says:

    I must be doing something wrong/right. $157 a month pays for clothes for a year?

    I hardly spend $157 a year on clothes.

    • Loias supports harsher punishments against corporations says:

      The women REALLY bring up the average on that one. Both in volume and cost.

      • ellmar says:

        The “women”? Would you care to rephrase that in the form of a not so sexist stereotype?

        • Thassodar says:

          The women who spend alot of money on clothes they don’t necessarily need and therefore cause the average to be skewed?

          Is that better?

        • Loias supports harsher punishments against corporations says:

          No, not really. I’ve seen the cost of women’s clothing compared to men’s. I’ve watched plenty of women shop on a weekly basis for clothing. I’ve seen the piles of shoes in a women’s closet. I’ve watch enough tv and movies portray this so-called “stereotype” without the expected outcry from the community about its inaccuracy.

          I beg you, please, show me a statistic that shows female on average do not spend more than men on clothing items.

          It’s not a stereotype if it’s statistically true.

          • Bsamm09 says:

            Men’s clothing can cost just as much as womens. Depends on where you shop. I can buy a $2,000 suit or one for $150. So can a woman.

            • herzzreh says:

              At least with suits, quality of proportionate to the price in most cases. Now don’t get me started on rip-off expensive mall brands that have K-Mark quality.

          • 12345678nine says:

            Yeah, I was shopping with my SO and went with him to the clothing section. He got twice as many boxer briefs with much more fabric than the underwear I had just bought. I mentioned it an he said “yeah, guys just aren’t going to pay that much for underwear”.

            Well then.

          • psm321 says:

            “It’s not a stereotype if it’s statistically true.”

            Yes it is… and a lot of stereotypes are true (in aggregate) :)

        • Rebecca K-S says:

          Saying that women spend the majority of the money spent on clothing and that a subset of women spend enough to seriously skew the average is different from saying all women are fashion-obsessed lunatics.

      • Oranges w/ Cheese says:

        <– Woman
        The only reason I buy clothes is for work, and even then I have 3 work pants and about 5 blouses.

        But then again, I’m not one of those girly-girls either. I don’t spend 20 minutes in front of the mirror in the morning putting on my face nor does it take me an hour to get ready. Personally I HATE people like that.

        • pecan 3.14159265 says:

          I don’t take an hour to get ready, nor do I spend 20 minutes putting on makeup….but I guess since I have a lot of variety in my closet, I’m a girly girl. Sometimes it’s funny to read how people define femininity. I don’t define myself as a girly girl either, but I suppose you would.

        • aloria says:

          It takes an hour just for my hair to dry under a blowdryer, so I guess that makes me one of those people you hate.

          • 12345678nine says:

            haha, right? I mean there are a lot of days I just throw my hair into a ponytail but if I want to blowdry it plus slap on a bit of make-up and the occasional shave then it is going to take me longer than 20 mins

            • Loias supports harsher punishments against corporations says:

              Guy here. What’s funny is that sometimes you look your best with the ponytail to us guys. Girls forget that.

              • 12345678nine says:

                So I hear! My boyfriend tells me the same thing, that he likes me with no makeup the best.
                I like my look. It’s simple. but sometimes I do spend extra time in the mornings because I want to look good going into the office when it looks good on you that you spend time on yourself and put effort into your appearance.

              • pop top says:

                What’s funny is that women don’t do their hair and makeup for men.

          • Red Cat Linux says:

            I miss having a longer commute. I would turn up the car heater to full blast and basically drive around in my hair dryer.

            Because that whole hour long thing was for the birds.

        • HogwartsProfessor says:

          I’m very slow in the morning, although my clothing is simple and I don’t wear a lot of makeup, just the basics. I can put on my makeup in five minutes. What takes forever is if I have to fix my hair some way because I haven’t had a haircut, and I take a long time in the shower. If I haven’t had any coffee, you’re gonna wait on me even longer.

        • 12345678nine says:

          You HATE people like that? Whoa nelly. Is it really that big of a deal?

          • RvLeshrac says:

            Yes, it is. Because they’re spending so much money on clothes that they tend to neglect things like, oh, I dunno, consumer credit and mortgage payments.

            • herzzreh says:

              This is BS.. I spend way, way more than that on clothes and somehow my credit is good and mortgage is paid. As a matter of fact, sometimes I just feel like a complete retard for paying everything on time. After all, why do it when you can be like millions (hey, don’t blame the banks…) who charged and charged everything and then one day just decided to declare bankruptcy. Even better, why work? Just put me on welfare.

        • pop top says:

          Why do you hate women who put effort into their appearance? While I normally love your posts, this one…not so much. Women wearing makeup or doing their hair (which can sometimes be a requirement for their job) does not affect you in any way so I don’t understand why it would make you hate total strangers.

          Fun anecdote: My dad used to coach women’s softball and one woman ALWAYS wore makeup. She wore it to practice, to games, to any parties they threw; she would never be seen without it. Everyone on the team would make fun of her and talk about her behind her back for doing so. One game she showed up and looked absolutely awful, like she was sick and dying. Her teammates were concerned and asked her if she should be playing while she was so sick. It turns out she just wasn’t wearing any makeup.

    • pecan 3.14159265 says:

      I probably spend $500 a year on clothes, if we’re talking about all clothing. I want to get some new work clothes sometime soon, and of course there’s the Woot shirt addiction.

    • TooManyHobbies says:

      That’s exactly what I came here to say.

      I did spend $50 on a pair of shoes last year, but they’re Rockports and I expect them to last 20 years. I think apart from that I spent maybe $60 on clothes, just a couple pair of jeans and a couple packs of socks and underwear. In 2011 I expect to have to buy a new pair of sneakers; the pair I bought for $6 in 2007 are getting a bit bedraggled now.

    • Fumanchu says:

      $1884 a year on cloathes is probably an average that some one did using this equation,
      Amount of money spent on apparel a year / number of people in the US = $1884.

      While that would be an average it would not be a very good or telling average about what the average person would spend on cloathes on average.

      And then many people shop for cloathes then don’t go shopping for much other than small additional purchases for a while. but at some point their cloathes are going to go out of style or start fraying or whatever and then they are going to have to replace them all which will cause spending for cloathes in that year way higher.

    • Nigerian prince looking for business partner says:

      I think a lot of it depends on your job. I work inside at an informal office (only get dressed up when dealing clients and regulatory agencies) and hardly do any fieldwork any more. I really don’t spend much of anything on clothes.

      Our field crews spend a lot of money on clothing — Carharts, coveralls, boots, winter clothing, etc. really add up over the course of a year.

      My wife works in a very formal office and women don’t really have the luxury of getting away with alternating between two suits. She’s really good at putting together varying combinations of skirts, shirts, and jackets but she still probably spends $1,000+ on clothes per year.

    • jesusofcool says:

      Agreed. I don’t spend anywhere near these amounts.

  5. Blueskylaw says:

    The personal savings rate in the third quarter of 2010 was about 1% lower than the previous quarter which shows that the economy was growing not because economic conditions were getting better but because instead of saving, we were spending more, which isn’t sustainable in the long run.

    • Bsamm09 says:

      But the three quarters before that were lower than Q3/10 and the rate has been on an upward climb for a while.


      • Blueskylaw says:

        True. During the worst of the recession, people were afraid to spend or invest money in the market so they put it into savings. Now that the economy “seems” to be getting better (todays employment report was much lower than expected) people might tend to spend more and save less.

  6. AllanG54 says:

    Cutting the Soc Sec tax was the worst thing that could be done. Hopefully people who will be retiring around 2050 will be able to at least get back the money they put in. And I hope they’re saving a lot more than $157/mo

    • Loias supports harsher punishments against corporations says:

      It was supposed to go bankrupct about my 3rd year of retirement. With the 2% drop, now I’m sure my parents won’t get any retirement at all.

    • Nigerian prince looking for business partner says:

      SSI really isn’t sustainable in the long run — No amount of taxation will make up for the changing demographics in our country. Once we approach a worker to retiree ratio of 1:1, the entire system will implode in on itself.

      Not even draconian tax levels will support that. It’s going to take a massive baby boom in the next decade or a huge increase in immigration; neither of which is going to happen.

  7. Amy Alkon says:

    Who in this economy is spending $157 a year on clothes (unless they have growing kids)? Last thing I bought was a cashmere sweater at a thrift store — in early 2009. I splurged. It was $1.

    • pecan 3.14159265 says:

      That was $157 a MONTH, but aside from that, $157 a year isn’t outrageous. You’re just really, really, really thrifty.

    • 12345678nine says:

      Did you mean to type year?
      I buy a good pair of heels/flats for about $25-30, and I would like 2 pairs a year at least.
      Another $30 AT LEAST (gotta shop around) for jogging shoes. They normally don’t last me a full year.
      That’s 90 dollars just in shoes.
      Even if I spent only 9.99 on the rest of my clothing I would only have 7 articles of clothing for the YEAR!

      My casual clothes last me for years, my work clothes need updates to look nice. I am thrifty, but I can’t look super professional while shopping at thrift stores, unless you want to include tailoring costs which drive it up even higher.

  8. Alexander says:

    People want less taxes and less government but they still want social security. I would love for the government to let me decide what to do with that FICA money in my paycheck.

  9. smartmuffin says:

    Giving you back a ridiculously small percentage of YOUR money, of which you’re involuntarily paying into a system where you’ll most likely NEVER see any sort of return if you’re under 45, is not a “freebie”

  10. Supes says:

    I’m just putting anything extra I get towards student loans. And I’ll be doing that for a minimum 10 more years I wager.

  11. MaytagRepairman says:

    I think I’ve spent more money and time on clothes last year than in any other year. There are a lot of bargains out there. Now is the time to buy clothes. Don’t save and wait for the economy to come back. Prices will only be higher then.

  12. whgt says:

    I handle a lot of payroll and healthcare rates went up 6% this year so everyone actually is making LESS money than last year even after this 2% “freebie.” NOTHING IS FREE.

    • dolemite says:

      I think that’s pretty average. 5-10% each year for health care.

      What I don’t get is…most people are fine with it and don’t want the government involved in health care. Meanwhile, most people are lucky to get a 1-3% raise each year, even if you have a job. It seems like most people would realize that at the current rates, no one will be able to afford healthcare in 15-20 years, because if your pay goes up 2% a year, but healthcare goes up 5-10%…each your your actual take home pay dwindles until 100% of your check would be going towards health care.

      • whgt says:

        You’re not taking in to account that the increase in healthcare is not a % of your income, but your actual premiums. Which should be less. We didn’t do raises this year but did pick up the tab for employees’ increased premiums.

        • Nigerian prince looking for business partner says:

          But in a lot of situations, having a 15 or 20% increase in already high health insurance premiums can be significantly more than a 2% cost of living raise.

          If I recall, the average individual health plan in the USA costs in the ballpark of $7,000/year and a family policy costs $13,000. A 15% premium increase on $13,000 premium is close to $2,000. If the average household income is $70,000, a 2% COLA pay raise is only $1,400.

          In many instances, these premium increases are being accompanied by increased deductibles, co-pays, and co-insurance, which increase overall health care spending.

    • fourclover54 says:

      Coupled with the wage freeze in my corp, that 2 percent seems like less of a freebie.

    • Nigerian prince looking for business partner says:

      Wow, only 6%? Most people are in the double digits.

      When HCR kicks in and health insurance is mandatory, premiums will be a de facto tax that alway go up every year. My family’s premium went up 19% this renewal period, to roughly $1,000/month in premiums.

  13. Brie says:

    I love my Famous Online-Only Bank, where it’s easy to create multiple savings accounts. One of them is for my tweens’ school expenses – not just for back-to-school pencils, but for field trip fees, marching band fees, or extracurrics like CTY family science days.

    Weirdly, I’m the only parent in my social network that does this. All of my parent friends freak out in August as if they didn’t see the school year coming.

  14. erickbatton says:

    My paychecks are now smaller because my increase in my contribution to my “benefits” was more than the “2%”

  15. Scuba Steve says:

    How much house would I get if I started saving next week?

  16. herzzreh says:

    ok… is someone pulling my leg? Who actually spends only $157/year on clothes?