Ask HN: Hacker Finances? / How much do you save each month? • Hacker News Board

Re: Ask HN: Hacker Finances? / How much do you save each month?

#11

Post by rwk » Wed, Nov 23, 2011, 5:44 AM UTC

I feel anyone who has any sense feels worrisome no matter how much they are socking away.

I got a lot more mileage than I thought I would out of books like I Will Teach You To Be Rich by Ramit Sethi(http://www.amazon.com/Will-Teach-You-Be-Rich/dp/0761147489/r...). It rubs some people the wrong way, but it has some really good points about automating finances, and just handling companies via some social engineering.

Some of the things I think a bunch of people working day jobs are the insane benefits their companies offer. Make sure both your and your significant other are maximizing their 401k benefit(at least to kick in the employee matching and more if you can afford it).

The savings accounts should just keep compounding on each other. Possibly toss some other money into a Roth or into the stock market. Also have a rainy day/emergency fund for when the roof leaks and other unforeseen circumstances.

If you have a side project, that money should be coming out of your personal spending money. It should be thought of as your hobby and not impede on the family as a whole(this is for day jobbers).

Obviously finances get a bit rougher if there is no day job and it is just startups, it gets more difficult. One of the plans I had envisioned was to have an account setup and once it reached a certain percentage of drainage(aka burn rate for funded companies) that was agreed upon in the family, then there would be a meeting to discuss hanging it up and looking for a new day job to refill the fund to try again.

If you luck out and get funded and/or someone buys a project, that money should go first to replenish the project fund and then go into emergency, savings, and a little left over to celebrate(vacation, new back door, etc).

Re: Ask HN: Hacker Finances? / How much do you save each month?

#12

Post by Fliko » Wed, Nov 23, 2011, 5:44 AM UTC

I haven't had to budget anything hardcore yet just food, tuition, toiletries, and entertainment but it might be better if you find out what you can be frugal about.

An example would be that I pretty much live off a diet of beans, rice, vegetables with the occasional pizza thrown in and it helps me save a lot of money in a given week. This isn't really hard for me though because I love beans, rice, and vegetables.

Re: Ask HN: Hacker Finances? / How much do you save each month?

#13

Post by analyst74 » Wed, Nov 23, 2011, 5:45 AM UTC

I don't get this thing called early retirement. You only have one life, stop worrying and start living!

Let me ask you this, if you do save enough and can retire at 35, what would you do then?

Re: Ask HN: Hacker Finances? / How much do you save each month?

#14

Post by Locke1689 » Wed, Nov 23, 2011, 5:46 AM UTC

Any money put into savings beyond petty cash for emergency situations is money lost if you have debts. The interest on your credit card debt is going to be at least an order of magnitude greater than any interest you're going to get on savings or investments. Pay off your debt first, save later.

The real answer is that you need to break down what is in that 45% because that's where "non-essentials" are going to be.

Re: Ask HN: Hacker Finances? / How much do you save each month?

#15

Post by sardonicbryan » Wed, Nov 23, 2011, 5:46 AM UTC

I save 30-40% of every paycheck (not including 401K), but I live at home and don't pay any rent (also no loans), have no wife/kids, no mortgage and my work offers free lunch and dinner.

One thing that helped me save more though, was creating a spreadsheet that I update every weekday with all of my account balances (through Mint). I have some formulas built in that basically then calculate when I will be able to afford a down payment on a home. http://twitpic.com/7i78rb

I put both Mint and this spreadsheet on the list of default tabs that get opened when I open Chrome, and the minute every morning I spend updating it and seeing the date it spits out really keeps me on top of my spending and finances.

Translating my current financial picture into a concrete date for a goal also helps make things more real, and motivates me a lot to save more.

Re: Ask HN: Hacker Finances? / How much do you save each month?

#16

Post by gujk » Wed, Nov 23, 2011, 5:48 AM UTC

Why the heck are you saving any cash when you have credit card debt, and how the heck did you get a mortgage with 50% back-load debt ratio?

You need to cut back on your spending, and with rent our your too-expensive house or walk away from your mortgage.

Re: Ask HN: Hacker Finances? / How much do you save each month?

#17

Post by throwaway21222 » Wed, Nov 23, 2011, 5:48 AM UTC

wickedchicken wrote: post #5

"Without a jot of ambition left I let my nature flow where it will. There are ten days of rice in my bag And, by the hearth, a bundle of firewood. Who prattles of illusion or nirvana? Forgetting the equal dusts of name and fortune, Listening to the night rain on the roof of my hut, I sit at ease, both legs stretched out." Ryokan (1757-1831)

On the eleventh day he was probably wishing he had thought about getting some more rice or conserving what he had. Maybe I am missing the point of this poem.

Re: Ask HN: Hacker Finances? / How much do you save each month?

#18

Post by pathik » Wed, Nov 23, 2011, 5:48 AM UTC

I spend around 10% on rent, 10% on food, 5% on booze, 10% on gadgets, 5% on other expenses and another 10% on very high risk investments. I have no debt and I'm single, so I save almost 50% each month. PS: I live in India.

Re: Ask HN: Hacker Finances? / How much do you save each month?

#19

Post by xarien » Wed, Nov 23, 2011, 5:49 AM UTC

The spouse and I are both a tad into 6 figures

20% housing (includes mortgage, insurance etc)

2% Vehicles (both paid for, this is for gas and insurance)

5% student loans

10% Child Care

5% medical

5% gifts to parents

25% living expenses

6% 401k

~22% into non-retirement investments

Will be cutting back on quite a few of these categories come 2012 as we fall back to 1 salary.

Re: Ask HN: Hacker Finances? / How much do you save each month?

#20

Post by latch » Wed, Nov 23, 2011, 5:51 AM UTC

This varies on a lot of things, especially housing which varies based on location (as does transportation).

But...

You should have a breakdown of that 45% (you might and you just don't want to share it, that's fine)..it's the biggest piece of the pie, and it's the most likely place to optimize.

Also, rather than think in terms of "what % should I save", you should think of it in terms of how much money you need to retire at the age that you want to.

You also seem to think of "savings" as putting money aside, which is wrong, wrong wrong. Do you pay more interest on your credit card or mortgage than you get from your savings? If so, you'll "save" more by paying those down first (of course, you need to understand your mortgage to know what you can and can't pay down).

Personally, I'd find 80% of my money going into housing and "other expenses" unacceptable. But, I live frugally, I no longer own a car (or the insurance, or the gas that goes with it), I know how to cook, I don't impulse buy (my Kindle 3 is going to last me for years), I no longer own a tv/cable.

And I hate to be one of those guys, but I can safely say that giving up a car and tv have caused huge gains in my productivity, health and happiness.

To answer your specific questions: a - 25%: but, I live in Hong Kong, where the rent is stupid (but everything else is awesome cheap) b - 0 (CC is automatically 100% paid every month), moving from owning to renting and giving up driving cleared me from any loans...happy days. c - 25% on "other expenses"..which is more of an average due to spikes (like buying a new bed, moving, getting a new macbook).