How Much Should You Save? \ stacker news ~Personal

2124 sats \ 25 comments \ @kr 20 Dec 2023 Personal_Finance

I’m sure this topic has been widely discussed on other personal finance platforms, but I’d love to hear some Bitcoiner perspectives on saving money.

A few questions…

What % of after-tax income do you think the average person should be saving? (a range is ok since the term “average” is very broad)
Do you save more or less than that amount?
Do you keep a budget to track your monthly savings vs. expenses?
What percentage of savings should the average person store in BTC vs USD?

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561 sats \ 1 reply \ @nullama 20 Dec 2023

The bare minimum should be to spend less than what you make. Surprisingly, many people in the world don't do this...

To setup a specific savings rate, I think it works the best if you have a goal in mind. Calculate how much you need to make it happen in a specific amount of time, and note down that number. That's your savings, create an independent high interest savings account for that.

If you don't know yet about your goal, set aside a good chunk of your income and put it into savings. Make this transfer automatically every month or whenever you get paid. The point is to have that money gone before you can use it. You will get used to the lower amount. Slowly you will see that you have a nice savings amount.

To do this, you need a surplus, so get more money and spend less.

10 sats \ 0 replies \ @boisechampion 21 Dec 2023

Yes. Comes right from "The Richest Man in Babylon". Pay yourself first, the number one commandment

326 sats \ 0 replies \ @Ice9 20 Dec 2023

Total Bitcoin allocation= N-1% where N is the number that keeps you awake at night. 😂 I might be closer to N + 100% though so I definitely don't take my own advice.

173 sats \ 0 replies \ @boisechampion 20 Dec 2023

So I’m always hesitant to say what other people should do. I like to just tell people what I do. So here’s what I do with these questions.

I’m a self employed realtor, so you can imagine my income is very volatile. Almost as volatile is bitcoin ha ha. So each month is a little different.

When I get paid, I immediately put 20% into savings. After that, I start budgeting for the month I’m in. and the next month. Whatever is left, which is usually at least another 20% I put into savings as well

Savings for a self-employed individual is our lifeline. If you don’t have savings you won’t make it.

As far as the budget goes, I don’t treat it like a religion. Sometimes we’re under budget and sometimes we’re over budget. Realistically, my budgeting software is more like a tracking system to me to just keep a on our entire financial picture. I use YNAB as my budgeting software.

Depending on how many deals I have coming up in the future months, that’s how I determine my future bitcoin allocation. I don’t dollar cost average I just lump sum. At the end of every month as long as I have a one year runway in my savings account I’ll ape in huge lump sums (at least huge for me)

When you’re self-employed it’s hard to come up with rules. Based on systems and percentages. If you try to do that, you’ll drive yourself crazy, feel inadequate etc.

50 sats \ 11 replies \ @BlokchainB 21 Dec 2023

This is a good question I still haven’t figured out what the sweet spot is. My expenses fluctuate wildly and I started a business not to long ago that has really sapped a lot of my wealth. But I do try to save something even if it’s only $10 a month.

823 sats \ 7 replies \ @BlokchainB 3 Jan

I think today I am going to give ynab at the recommendation of @ekzyis

50 sats \ 6 replies \ @ek 3 Jan

Hope you like it. Try to keep using it for at least a month. Preferably 2-3 months since imo, the benefit is knowing how much you spend in various categories like food, entertainment, mobility etc. per month. And also how it changes (or not changes) per month.

Do you want a referral link? Need to check if they have something like this first though. I think they might only have an affiliate program but that is too complicated and I might not even be eligible.

571 sats \ 5 replies \ @BlokchainB 3 Jan

Sure I been using a spreadsheet but it’s 2024 I figure I give it a try.

Drop the ref link! 😆

50 sats \ 4 replies \ @ek 3 Jan

Sure I been using a spreadsheet but it’s 2024 I figure I give it a try.

Nice. Most people have a privacy problem with SaaS like this though. But tbh, I don't mind if another company (from I don't know how many companies already know) knows how much milk I buy per week. (This time it's even a useful company that is worth their money.)

I know, as someone who LARPs a lot about ~privacy like me this might be unexpected that I am using YNAB connected to my bank account. But I also believe in "hiding in the crowd".

If you often pay with cash, you can also enter your transactions manually though.

Drop the ref link! 😆

I found out they indeed have a referral program:

Loving YNAB is so easy — and now it loves you back! When you refer a friend or family member, and they subscribe with your referral link, you both get a free month of YNAB!* We’ll keep track as friends sign-up and subscribe so that it’s easy to see your free months multiply!

*Referral program is only available for subscriptions purchased directly through YNAB or the Google Play store.

This is apparently my referral link: https://ynab.com/referral/?ref=EP_vdK4L1FbusFkd

571 sats \ 3 replies \ @BlokchainB 3 Jan

Thanks. Yeah privacy is the reason why I stopped using a personal wealth app that tracked everything. And went to a spreadsheet on my local machine. But now I want to try something new. I need to face the music and come up with a plan to pay off all my debts

150 sats \ 2 replies \ @ek 3 Jan

Oh, I didn't know this would be the case:

YNAB has told me which email you used for signup. Looks random though but in case that's PII: Your PII is safe with me 😅

Sorry!

I will let this message be a warning for other stackers trying to use my referral link. I did not intend to use this to harvest PII, lol

100 sats \ 1 reply \ @BlokchainB 4 Jan

Hahah I kinda figured it would doxx me to you. I knew it would only be a matter of time before I doxx myself on this site! I went the lazy route and just used my normie email after the fact I was like damn hahah. So is life.

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50 sats \ 2 replies \ @cryotosensei 3 Jan

Happy to contribute towards your $10 per month haha

50 sats \ 1 reply \ @BlokchainB 3 Jan

2024 inflation it is now $12😆

50 sats \ 0 replies \ @cryotosensei 3 Jan

Let me make up the difference!

121 sats \ 1 reply \ @SpaceHodler 21 Dec 2023

I'm saving 60% of my after-tax income. I don't think there are any hard and fast rules here, but I'd suggest people save at least 40%. 100% of my savings are in BTC. In fiat I only have what I need to pay my bills, which sits in my instant access savings account for less than a month.

If I have an emergency expense, like something breaking in my house that needs fixing, I can always send some corn. The chances I both have an emergency and realize a substantial fiat loss that way are slim.

0 sats \ 0 replies \ @SpaceHodler 21 Dec 2023

I can always send some corn.

I meant "sell some corn."

20 sats \ 5 replies \ @quark 20 Dec 2023

Whatever you can save it depends. But 100% in Bitcoin for sure. Saving in fiat is the worst thing you can do unless we would be in deflation.

20 sats \ 0 replies \ @CruncherDefi 21 Dec 2023

Saving in fiat is the worst thing you can do unless we would be in deflation.

It's not that obvious. And -2% CPI inflation is still 5% M2 money supply inflation. (As they sum to 7%)

They put a reference point at 0% CPI. But we bitcoiners know better, CPI is bullshit human made metric. Raw money supply inflation matters. Its objective and independent from arbitrary product baskets.

Fiast system biggest 'success' is convincing people that they need to beat CPI to be fine.

10 sats \ 3 replies \ @boisechampion 21 Dec 2023

What if I'm saving for a purchase that will happen in 12 months?

Also, are you saving 100% in BTC. No USD savings at all?

20 sats \ 0 replies \ @ridsa 21 Dec 2023

putting some in a HYSA is a good idea, imo

10 sats \ 1 reply \ @quark 21 Dec 2023

Why would you save in the worst asset and not in the best asset? If you save in USD, after 12 months, you will probably need more USD than initially saved because the item has increased in price.

Also it depends on which country you live. Imagine saving in Argentine's pesos instead of USD. There the answer is more obvious to save 100% in BTC.

324 sats \ 0 replies \ @boisechampion 21 Dec 2023

I’m saving in USD.

I’ve saved in Bitcoin for 3 years and I’ve barely broken even from a USD perspective. I’m the biggest bull when it comes to BTC but I’m a perfect example of what you’re saying does not actually work in reality.

0 sats \ 0 replies \ @cryotosensei 3 Jan

The conventional way is to save at least 20% of your income. Of course, people aiming to attain FIRE will tighten their belts and save a more substantial percentage of their salary - 50-70%.

Personally, I adopt a more holistic view of things. I have SMART financial goals that I must achieve within the year. This year, I plan to save $4,000 in my daughter’s college fun as well as contribute $15,300 to my Supplementary Retirement Scheme. Because I have concrete figures, you bet my mind is always thinking about how I should achieve these goals within a year. It becomes my fuel of motivation.