Hacker News Reader

Comment by halflings | Hacker News Reader

Shouldn't it be a % of (income - essential expenses), rather than % of non-essential spending?

If you're very frugal, you'd end up giving away a very small amount of money, saving all the rest... Saving is super important, but giving money to effective charities is also a great way to use your money.

To take a typical example of someone that might be reading HN, any software engineer working in NY or the Bay Area can easily give away $10K a year while saving enough money to get a very cozy retirement.

View on HN

I am not sure if you can easily give away that much money. If it were easy, people would already be doing it. Buying a nice home is a distant dream even for many software engineers in the bay area for example, and future education and healthcare costs are very unpredictable. Putting it in terms of money you are already spending helps put it in context.

There are many beneficial things people can do but are not doing. For example: investing your money. Many people aren't doing it (instead leaving cash in their bank account for a large part of their life) out of pure laziness/ignorance of its benefits.

Let's assume you're a junior SWE in the Bay Area, making $130K. Annual take home is ~$85,753 according to [1] You pay $3K in rent (nice 1 bedroom apt in South Bay, or just a decent one in SF), $2K for various expenses, that's $60K and you're left with $25K.

This is for a junior engineer, and granted they might want to save $25K vs $15K (arguable; I would consider those savings don't matter much in the long run, the goal being to quickly increase your salary by advancing your career), but an engineer in a large tech company is making closer to $250 - $300K total comp, and you'll see that the $10K donation isn't making much of a dent in your savings at that point.

[1] https://smartasset.com/taxes/california-paycheck-calculator#...

> but giving money to effective charities is also a great way to use your money

Those charities aren't going to help you when you're retired and subsiding on a meagre state pension. Or if there's a resurgent global pandemic and you lose your job and home.

Save first, always.

I mentioned that you can do this on top of saving money. Just saving money with no goal in mind (or with the goal of buying a $1M house) is IMHO not always worth it.

Absolutely for saving to be able to survive ~1 year as life is very unpredictable, but we're talking about altruism here... Let's for a second assume we all want to have the largest positive impact on other people, is that $1M really the best way to spend your money to both improve your and other people's life? Could you instead buy a house/work elsewhere, pay $400K, and invest $600K in saving a hole bunch of people from certain death / extreme poverty?

Reply on news.ycombinator.com