How much money do you save each month?


#1

Right now, my DH and I both work full time and our 2yr old son is with a babysitter all day. Our goal is to have me be a stay at home mom but if I quit now we would only have $100 left each month and no money going towards retirement. This doesn't really allow for any sort of car repairs, house repairs or doctor bills. We are not comfortable with such a tight margin so I am looking at just working part-time but I'm not sure how many hours I would need to work each week.

What amount of "extra" each month are you comfortable with? Maybe if I can see what other people are doing we can figure out what might work for us.


#2

It depends on your situation. If you own a home, you need more. If you have a car you need more. The more kids you have the more "extra" you'll probably need.

If you rent an apartment or home and don't have a car or kids you can skim by because there are less surprise expenses.

If you own a car, you should probably have $1000 on hand for repairs and that is a minimum because even buying new tires will proably cost $500+, a major repair could be $1500+.

If you own a home, you probably should keep $5000 on hand for repairs. If your roof starts leaking or something like that, $5k should cover a new roof on a smaller to medium sized house in most places.

You should probably have $50 per kid on hand for co-pays/meds co-pays, just in case you are strapped and they happen to get sick. This way you can probably take them to the Dr. and get meds if need be. If they are older kids you may need more for unexpected activities and things.

Ideally, a family of 5 with a house and two cars should proabably have $8000-$10000 in savings for unexpected expenseses.

We generally keep more than that on hand just because we are lucky enough to be able to.

For retirement, we both have 401ks and we both put money in a savings account. I probably put away $200-300 per month and my wife more than that. We're not rich but we're blessed to be stable financially and will soon have our home paid off.

There was a point where I was pretty unstable and would have loved to have $1000 in my savings, so I know how that feels.


#3

I guess I should have added that info to the original post. We own our home, we have 2 cars (both early 2000’s and one may need to be replaced soon) and we have our FFEF of $13k, plus $5k in savings for a potential car replacement.

While I know we could handle the first emergency that comes our way, what worries me is that we won’t be able to rebuild our savings if something should wipe it out. DH’s job does not give him much overtime or the opportunity to pick up more hours if we need it.


#4

We go by the d.o.g. method (Depend on God):smiley: Seriously, some months I do not know how we’ll make ends meet and somehow God provides (usually at the last minute). I think that maybe we have $200 in savings (yes, we should have more, and in the past we have, but in the beginning of the year my husband went almost two months without work and what I make just covers mortgage payment). My husband grew up poor, I grew up eating freshly cooked lobster at least once per month, steak a few times per month, and all that I could ask for. Hubby has taught me that trusting in God is what gets you through. I was never materialistic though I was raised with parents and extended family who are (which is now, great pressure for parties and holidays). And when I start to doubt I remember all those who use to work at Enron and lost everything from their job to their retirement. And thinking about refugees, I remember that the material, when it comes down to it, doesn’t matter much. I don’t know if this helps you at all, just wanted to give you a different perspective than what many may offer here. By the way, we both work opposite schedules and we have three children and two cars that are paid off (though, this week, both need to go to the shop to be fixed, just when we were going to have extra to put in the bank, God sure is funny!):smiley:


#5

[quote="ejlo1, post:1, topic:248809"]
Right now, my DH and I both work full time and our 2yr old son is with a babysitter all day. Our goal is to have me be a stay at home mom but if I quit now we would only have $100 left each month and no money going towards retirement. This doesn't really allow for any sort of car repairs, house repairs or doctor bills. We are not comfortable with such a tight margin so I am looking at just working part-time but I'm not sure how many hours I would need to work each week.

What amount of "extra" each month are you comfortable with? Maybe if I can see what other people are doing we can figure out what might work for us.

[/quote]

Does this account for reduced expenses associated with staying at home? I don't mean just the amount saved on a babysitter. Also count a potion of the expenses you incur as part of your going to work (e.g. gas usage and DH's tax bracket actually decreases). You should also increase expenses you might have to pay more on (e.g. paying for a cell phone that used to be a company phone). Most of the time, the increased savings outweigh the increased costs (outside lost income).

I might not be the best source of information on retirement. I currently look at my kids and think "if they turn out to be Godly adults who can convey the Faith to the next generation, that's retirement enough."


#6

:rotfl:


#7

[quote="SonCatcher, post:5, topic:248809"]
Does this account for reduced expenses associated with staying at home? I don't mean just the amount saved on a babysitter. Also count a potion of the expenses you incur as part of your going to work (e.g. gas usage and DH's tax bracket actually decreases). You should also increase expenses you might have to pay more on (e.g. paying for a cell phone that used to be a company phone). Most of the time, the increased savings outweigh the increased costs (outside lost income).

I might not be the best source of information on retirement. I currently look at my kids and think "if they turn out to be Godly adults who can convey the Faith to the next generation, that's retirement enough."

[/quote]

Yes, this accounts for everything we can think of, such as no childcare expense, reduced gas usage, income tax projections on just DH's income, and less spent on work related clothing.

I guess the main reason why it would be so tight if I stopped work all together is that I bring home 52% of the income and DH brings home 48%.


#8

I think mcrow has very prudent and sound advice. I just found out that I need to replace my home heating/air system soon, and that may cost over $5000. Something always comes up, whether it’s a busted tire (I just replaced two), or a doctor’s visit.

But I also want to mention that more and more pensions and 401Ks are in danger. So I’d keep socking away in savings. More and more, the resources that are thankfully saving the petutes of our sick and elderly now are running out. We have to work harder to ensure our stability later. You also can’t really count on your kids to take care of you when you’re older because they may not be able to care for themselves.

If you are able to sock away more money, especially with you earning 52% of your family’s income, I’d stick with that especially now. But that’s MOHO…everyone has to do what’s best for their family.


#9

[quote="ejlo1, post:7, topic:248809"]
Yes, this accounts for everything we can think of, such as no childcare expense, reduced gas usage, income tax projections on just DH's income, and less spent on work related clothing.

I guess the main reason why it would be so tight if I stopped work all together is that I bring home 52% of the income and DH brings home 48%.

[/quote]

Well 52-to-48 is really not a statistically significant difference. Who has the greater growth potential between you two?


#10

He has the greater growth potential. I'm pretty much maxed out in my job field and would have to go back to school to earn any more. One the other hand, DH just got finished taking classes and getting his certifications last year so once he gets more work experience he should have a wide range of positions available and a lot of room to grow.


#11

[quote="ejlo1, post:10, topic:248809"]
He has the greater growth potential. I'm pretty much maxed out in my job field and would have to go back to school to earn any more. One the other hand, DH just got finished taking classes and getting his certifications last year so once he gets more work experience he should have a wide range of positions available and a lot of room to grow.

[/quote]

It does seem more prudent for his to be the single income then. Can he get a mentor to guide him to higher positions? He may be able to accelerate his earnings growth and possibly open even higher opportunities.

CAVEAT: If he does get a career mentor, you, as a couple, will probably need marriage guidance (counselor, regular retreats, etc) to keep your love alive. The world is riddled with successful divorcees. I recommend suggesting them both simultaneously.


#12

We’re in the one income category (3 going on 4 kids) and in six years of marriage have only had 2 incomes for a grand total of 3 months.

How much do we keep on hand in savings? Well, honestly the home equity line of credit is the savings account for now - with monthly mortgage payments there are no major problems until spending causes us to draw more than $700/month as that is how much principal is being paid off each month. As long as we don’t draw more than $700/month we are neutral or in an overall debt reduction position. We also have a significant amount of equity ($10’s of thousands) that we could draw on before running out of cash. Considering how long we’ve gone and how relatively little consumer debt we’ve accumulated - our overall debt is less each year - I think that the strategy is ok. We have “potential income” that is currently untapped as my wife could always go back to work if we found ourselves in a very serious situation.

We are managing to save for our children’s education - the government of Canada gives 20% (or more in some cases) of parental contributions to registered education savings plans, so the way I see it, I’d rather pay 4% interest on some borrowing while taking that 20% bonus which will be compounded for almost 20 years than not save for that. All of the kids savings come from government payments (Child care benefit and Child Tax Benefits) I have a defined benefit pension plan, but I’m expecting work to 70 if healthy enough anyways, even if its only part time, because I can’t imagine much in the way of pension plans 40 years from now after the boomers are done cleaning them out.

We are in a different situation as we are quite confident in the economy around here and my job is very stable. I do work part time at a second job which is very stable as well, usually 6 hours/week. We likely won’t see housing price drops the way Americans have, so home equity while not guaranteed will probably hold up. The worst threat to us right now are all the debt issues outside of Canada (in Europe and the US) rather than any domestic economic factors causing instability.


#13

I should note that we’re a two income family. My wife making probably 60% of the income.

If my wife lost her job, we’d probably be able to stay afloat on my income, but that’s because we pay like $550 per month in daycare expenses. Luckily, my wife is in a field that’s very short on workers and they are in demand so if for some reason he job was eliminated, she’d probably have a new one within a month or two. Given we have a savings and my income would cover the basics we could probably last a couple years with her not working.

Eventhough we are stable financially now, we do our best to make sure we save money where we can. We us a lot of coupons, rarely buy anything (besides everday items) that’s not on sale or on clearance, and have a garden for veggies over the summer as well as later in the year with our canned stuff.

We rarely go out to eat unless we have a coupon deal or something like that, so we cook most of our meals at home. We tend to make things we can have multiple meals from over the next few days.

We keep the dial on the thermostat at 75 in the summer and 68 in the winter to save money on heating/cooling bills. We wash clothes only in cold water to reduce bills further.

Our utility bills (electric,gas,water,garbage,cable,internet…ect) are around $300 on average. That’s pretty good given that the cable, phone and internet make up about $120 of that and if need be we could cut that to $30.

We save all of our pocket change in a jar for our daughter and when it gets filled it goes into her savings account. All of her birthday money goes into savings as well. My in-laws give our daughter stocks for her birthday, so she has some investments already as well. Hopefully by the time she goes to college she’ll have some money for it.

I came from a very poor family, my wife’s family isn’t rich but would d be solidly upper middle class. It took me a long time to get to a point where I made decent money because I had to pay for it all myfelf and worked 40+ hours per week while going to school. It wasn’t easy but it paid off in the end, then again I have always been proud of being self reliant, unlike most of my family.

Heck, I grew up no knowing where most of my meals were going to come from. My mom was a single mom with a serious addiction problem. I have 5 brothers (two from my mom, three from my Dad), I grew up with two brothers with my mom. We were on welfare from birth and my mom was a mother at 16. She got on welfare and never got off and later developed a drinking problem and left us home alone for days at a time while she went on benders. So, most of the time we just ate what I could make being that I was the oldest, I did the “cooking”. Many times there was nothing in the fridge or cupboards to eat. We grew up in a small town and we had a little store on mainstreet. Luckily, I knew the owner and he’d allow me to put food on a “tab” whem our mom would disappear. Sometimes my mom paid the tab, sometimes not, but either way I thank God for the kindness of the store owner because I’m pretty sure he knew he wasn’t going to get paid most of the time.

My point is, keep the nose to the grindstone, work hard, and pray and you can work your way out of things with the blessings of God.


#14

DISCLAIMER: The views and opinions expressed in these forums do not necessarily reflect those of Catholic Answers. For official apologetics resources please visit www.catholic.com.