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Comment by mkr-hn | Hacker News Reader

Being able to save, especially for years, is a special circumstance. At least in the US where wages have been flat for quite a while even as cost of living skyrocketed.

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I don’t want to sound like a know it all, but I managed to save a lot of money living in a big city in a grad student stipend, which is about $25k. It can be done. I spent very little biking, cooking from home, buying used, having roommates, not drinking, not buying much.

There are exceptions like kids and chronic health issues but most people could save a lot more money if they wanted.

I say this without judgment, people just have different priorities. I recognize my advantages, but I have more savings than most people in my family, despite probably having the lowest lifetime income.

This really needs a time frame. $25k in a big city means different things depending on era. The curves of wage growth, cost of living, and wealth disparity didn't start to diverge so wildly until the 2000s. This took a lot of people by surprise and people whose experiences diverge by era aren't always aware of how quickly things changed for other people.

Someone who graduated in 2005 will often have a completely different experience from someone who graduated in 2008 or 2009. People who haven't had to look for a job since the '80s are especially befuddled to learn "ask for the manager" leads to "there's an online application kiosk by the door, go there." Usually along with "we don't have any openings, but we keep it on file for 6 months!"

I graduated college in 2012, grad school the following 6 years.

You got lucky with the roommates, that's one thing outside of your control that can go very badly.

Per the US government (BLS), the median household has the ability to save about $1,000 per month without changing how much they spend on ordinary costs of living. So not everyone can but most people can if they choose to. Of course, Americans are notoriously poor savers, which is the bigger culprit.

There is a 21 trillion dollar economy built largely on companies fighting over that $1000 with lies and manipulation from people who devote careers to outsmarting people.

Another thread on HN helpfully has examples of people refusing to go along with it. I don't think they're representative.

https://news.ycombinator.com/item?id=27629543

If I have monthly income of 3000 and spend it all, how am I to save 1000 monthly without lowering my costs?

This sounds impossible, unless maybe you’re not counting all spending as “ordinary costs”?

It's not counting all spending as costs of living.

This is a term of art. An "ordinary expense" are categories of expenses required to live a decent average life, as evidenced by the fact that most people actually spend money on them. This includes housing, transportation, clothes, food, healthcare, utilities, taxes, etc. It makes no judgement on how the money is spent in ordinary categories e.g. buying a BMW is an ordinary expense because it is transportation. It isn't prescriptive and it includes pretty much everything you would expect. Ordinary expenses include a lot of luxury and non-essential spending.

If you look at all the categories that are "non-ordinary" because most people spend no money on them, they are pretty obviously lifestyle flexes. For example, if you blow your entire paycheck on a bar tab, that is not classified as an ordinary expense because most people don't do that.

Subtract the median ordinary expense from the median income, you are left with more than $12,000 per year as a surplus. This is called "discretionary income", money you can spend on fun, hobbies, or -- relevant to this thread -- savings. If we restricted it even further to ordinary and essential spending, the income level that no longer generates any surplus is in the region of 15th percentile IIRC. That is still 20 million households in the US with no ability to save but that isn't the experience of the vast majority of households.

The Bureau of Labor Statistics and the Federal Reserve publishes surprisingly detailed statics of what people spend money on and how income surpluses are used.

It does require discipline and sacrifice, and it's harder or easier depending on circumstance, but it is always possible. You may not be able to save very much, but even a small amount can get you through some situations that would otherwise have cost you more, in interest or lost time at work or whatever. Those small solutions add up over time, so that you're always better off with saving, than without.

Especially if you have kids and work as labor

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