<p>A conversation with my cousin got me thinking. I know this might be a touchy subject for some people (and I certainly understand that), but I’m just curious how much your adult children have saved. I’m talking about liquid money, investments, and other money that can’t be touched without a penalty.</p>
<p>I visited my cousin recently who just had a child. They are both in their mid 30’s, two stable jobs. They have a house, go on vacations, spend money on their hobbies, etc. I don’t remember how it came up, but the subject of money came up. They stated to me they were a little scared because they had very little saved (a little less than $15k) and about $10k in investments and that is was going to be very tough on them. I was quite baffled by that. They’ve been married for over 5 years, this is their first child, and their jobs have been stable since just after they graduated for college. I don’t know how much they make per year, but I would estimate at least $80k (my cousin is a nurse and his wife is an accountant). </p>
<p>I would have never expected them to say that to me. I figured easily combined they would have over $200k in savings and investments.</p>
<p>This got me thinking about my own savings. Before this conversation, I didn’t think of myself of somebody with a lot of money for my age (not even close). I worked in college and have been working ever since graduating. I don’t get paid a lot, I eat out, spend money on my hobbies, and go on the occasional trip. I have managed to save around $40k. Talking to my cousins made me think about my own situation. </p>
<p>Now don’t get me wrong, I know money isn’t everything. I don’t think I’m better than anybody else just because I have more money than somebody else. It just got me thinking. If two people with good, stable jobs don’t have an abundance of money, what is everybody’s else’s situation?</p>
<p>Thinking back on when H and I were in our mid-30s, we were probably similarly situated as your cousin. It took us a while to buy cars and get together a sizable down payment for the house. There came the baby, with expensive child care. There was always something in our lives that needed the money!</p>
<p>$200K in savings and investments in our mid-30s? LOL!</p>
<p>We worried about how we were going to fund college for the new baby and retirement also. But once you get the house bought, you can move on to seriously saving and investing.</p>
<p>Fast forward 25 years…we’re doing fine. If your cousin and his family change their financial priorities, they can come out all right also.</p>
<p>Wow. I figured $200k combined would be easy for a married couple (especially a couple making at least $80k a year).</p>
<p>Just thinking about the 10 year period from 25-35. If each person saved $5k a year (which is not a far fetched idea) and if each person contributed $5k in retirement a year (again, not a far fetched idea), that is $200k. And that’s not even counting interest on the retirement income.</p>
<p>How is that inconsistent? When I say $200k saved, I am referring to the combined total of liquid money, investments, and other money that can’t be touched without a penalty.</p>
<p>And you left also left out some parts. This is what I stated: “If each person saved $5k a year (which is not a far fetched idea) and if each person contributed $5k in retirement a year (again, not a far fetched idea), that is $200k.”</p>
<p>You also have to think about the amount of debt they are having to pay off. There are some (many?) who are going to have more emphasis on paying off student loans, credit cards, etc rather than putting money into the bank. </p>
<p>And if they as a couple are making $80k then putting $20k into savings is quite a chunk…</p>
<p>Well you shouldn’t take out more loans than you can handle and you shouldn’t charge anything on a credit card you can’t pay back in full (but that’s for another thread).</p>
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<p>It is. You don’t think a couple can live on $60k a year?</p>
<p>If they are making 80K, then their take home is probably 50k, which is about 4200/mon.
Rent: 1500
car: 500 (insurance, gas, lease/loan)
utilities:250
cell: 100
food: 400
sitter: 1000
baby: 300 (diapers, formula)</p>
<p>That’s over 4000 already, without taking into acct of medical, entertainment, clothing. Maybe they don’t pay as much for full time childcare or for diapers/formula, but I only budgeted for one car, and the rent is rather conservative too. If your cousin is a nurse, then I wouldn’t be surprised if they have 2 cars due to his irregular working hour. If they just had the baby, maybe they could have saved more money, but I am sure they didn’t start out making 80K a year either. What about student loans?</p>
<p>You must not have read the whole thread. They are in their mid 30’s and they just had their first child. They have had steady jobs and the same job for over 10 years. I figured since they didn’t have the expenses of a child for so long, they would have more saved.</p>
<p>I read your thread, I know how to read. But you didn’t read the part where I said, they probably didn’t start making that kind of money from day one. You also didn’t say 80K was after tax, and most people wouldn’t say “I make 80K” and that means after tax, it is usually gross.</p>
<p>The fact that most people don’t save is nothing new–Americans are notorious for not saving. I think the average savings rate for Americans was around 10% and it’s plummeted in recent years.</p>
<p>I know they didn’t start making that money from day one. My calculations didn’t even account from day one. They have both been around 14 years removed from college. My savings calculations were just counting the past ten years, not the 4 years before that and the time they worked in college.</p>
<p>You’re right. I should have clarified after tax. I always state my income after tax, but I understand a lot of people don’t.</p>
<p>I understand that, but don’t you think that 2 people, 14 years removed from college, and have had good jobs since then have more than $35k in savings?</p>
<p>You don’t think they should have more than $35k saved between the two of them? Just taking into account the past ten years, than is $1,750 a year per person.</p>