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Before I started blogging, I believed a reasonable monthly savings rate was 10% to 20%. I even read an article where a “finance expert” recommended just 5% for retirement savings and claimed it was sufficient.
Looking back, those figures now seem far too low.
Many articles still suggest saving between 5% and 20%, and that may work for some people. For me, though, it isn’t enough.
Recently I spoke with someone who saves about 85% of their after-tax income each month. At first I thought that was extreme—maybe even a little crazy—but I was also a bit envious.
That person takes frugality to an extreme to reach that level of savings, but they’re happy with their choices, and that’s what matters.
Right now, we save about 60% of our income. That number could be higher, but we recently had a wedding (which redirected a lot of our funds), we’ve been traveling more (and buying equipment for camping and hiking), and a significant portion of my monthly business income goes toward taxes.
