TIL I live beyond my means. Welcome to America. Having 10-15% cushion to save is a luxury for a lot of people. Probably not most people on HN but still.
Should I just blow it all on something ridiculous? Like what? Every single month?!
It's easy to waste money on small things. Some people buy expensive coffee and eat out everyday for example. It adds up really fast.
More likely you have a lot of optional things that you can trim away. Do you have cable? How often do you eat out? Do you smoke? Do you have a budget that you stick to?
It's all about priorities. If you don't prioritize it, it won't happen. It's not easy and emergencies and unexpected bills come up but the freedom is amazing.
Check out the Ramsey Plan. We wiped out most of our debt in about 2 years while saving for a house. And that's while renting, 3 kids, and living just outside DC.
Unrelated: I know a bunch of the Watson team here in Austin. Good group, cool tech. :)
Looks like it's too naïve, but it's good advice for people living in the U.S. and that have mortgages.
The point is that - like with most things - if you don't have a plan and you haven't defined success, you can't get there.
A plan doesn't make it easier but it makes you think about the details, gives you something to work against, and lets you track progress.
@hoorayimhelping SF also have ridiculous salaries compared to the rest of the world. Everybody seems to be making at least $120k starting out, and many up to $300k. I make way less than that, but also live in a pretty expensive city. I just bypass that by not buying a lot of stuff. It's only possible because I reject the average consumerist middle-class lifestyle. I won't buy a house, I'll never buy a car again, I bike to work, I don't have expensive hobbies. You can't have the cake and eat it too. However most people should be able to save more than they do.
Expenses: $1500
Children: none yet, but subsidized child care, paternity leave and other subsidies makes it pretty cheap
Food: $500
Housing: $400 (own apartment with my SO)
Student loans: $150
Car payment: no car, bike most places
Income tax rate: 32%, but employer pays another 30%, so effectively 62%
Sales tax: 25%
Insurace: $15
Phone: $15 (cheapest possible plan)
Internet: included in housing
Note: I also lived in the US before, with simliar savings rate, which was even easier.
My housing is 3 times your housing budget.
My student loans are $200/month.
My car payment is 300/month.
Income tax rate 9%.
Sales tax: 0
Medical insurance: $8000/year
Auto (and other) insurance: 1200/year
What I do have an issue with is "if you can't save x amount per month, you're living beyond your means". It's not that black and white. My trust fund question was legitimate. I also think that if you have a support system behind you (i.e. parents you could ultimately live with if you couldn't find work), it makes taking a year off with very little income, much more likely....as does, having a trust fund backing you up.
I recommend reading this: http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-...
I pay for health insurance out of my own pocket, which is over 8000/year.
http://www.numbeo.com/cost-of-living/compare_cities.jsp?coun...
According to Numbeo, even if you live in Dubai you're way ahead of someone living in San Francisco, and even Montevideo, Uruguay (where I'm from)