After I wrote the last post on living paycheque to paycheque, I opened up the floors to the readers and their opinions.  While I expected there to be a discussion, I didn’t expect the debate to be so heated.   One thing I learned from some of the comments is that I did not account for people who really “need” to live paycheque to paycheque.  That is something that I overlooked as the people around me mostly make relatively high salaries but many live well beyond their means.  While it is their choice to live the way they wish, I believe that everyone should take responsibility for their actions.

Another reader suggested that I create a poll for the readers here at MDJ because he suspects that the incomes are higher than the average Canadian family.  The poll below is completely anonymous, but will give us a good idea of reader salary range and savings rate.

The poll options are fairly lengthy, but should be intuitive.  Simply pick your salary range with the corresponding savings rate on your gross income.  I’ll leave it up to you whether you use family or individual income.  Personally, I combine my finances with that of my spouse so I would add up our gross family income and determine the savings rate on that income.  What’s considered savings? I like to keep things simple, so I simply add up my contributions to RRSP, TFSA, non-reg, mortgage prepayments, and/or transfers to high interest rate savings in a year.

For example, if our gross family income is $120k and we saved (as per definition above) $20k over the year (or $1.67k/mo) , then our savings rate would be (20/120)x100 = 17%.

Please take a second and vote below.  If you can’t see the poll below, please click here to vote.

What is your gross income and how much do you save?

View Results

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Thanks for participating in the anonymous poll!

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  1. No Debt Guy on September 20, 2010 at 9:10 am

    I find this interesting and look forward to seeing the results at the end of the day. Although our saving rate would be considered low my most standards more than 30% of our gross income is going towards our mortgage.

    I didn’t include our defined benefit pension plans which with our employers contribution would be about 16% of our gross.

  2. D on September 20, 2010 at 9:48 am

    Hey! I am a single, low income Canadian. I have a very simple lifestyle, but I always save for the future. I am a little annoyed that I can’t vote! My little bit of savings is still more than that of a high income earner who saves nothing! And- I sleep like a baby every night debt-free.

    • FrugalTrader on September 20, 2010 at 9:51 am

      Hey D, thanks for the comment. Since these comments are anonymous as well, you can leave your numbers here if you wish. Perhaps other commenters in the same situation will follow.

  3. teddyu on September 20, 2010 at 10:01 am

    This is a great idea.

    Keep in mind, however, that there are some financial planners like David Trahair out there who advocate simply putting all disposable income into paying down your mortgage (& other debt) rather than into RRSPs or savings. The argument is that paying down debt provides a guaranteed after-tax return that is pretty tough to match with other guaranteed savings/investment products.

    After the debt is paid off, you then have more money to put into RRSPs, and you haven’t burned contribution room during your “low-earning” years.

    The danger, of course, is that you simply swap paid off debt for new debt (upgrade house, etc.), but that need not be the case.

    So, I guess, I’d still caution about taking too much from the results of this poll. It doesn’t distinguish between people choosing to make debt repayment a priority by accelerating or doubling-up debt payments instead of putting it into savings, and people with so much debt that they are just scraping by using all of their disposable income to pay the minimum balance with no option to put money into savings.

  4. FrugalTrader on September 20, 2010 at 10:04 am

    @teddyu, good point. I would consider any mortgage prepayment or excess mortgage payment top up to be savings as I could stop those payments at any time and put them into RRSP/TFSA or other.

  5. Tom on September 20, 2010 at 10:08 am

    I think this is great, but the number will not be too accurate. I’m sure all of the sudden you will find that most people do save some money. The reason is I think is that most people that come to this site do have some money management skills.

  6. robb_stark on September 20, 2010 at 10:12 am

    Our financial strategy couldn’t be more straightforward. My wife and I choose to live a lifestyle that can be comfortably supported by a 60k per year salary. The key is that we have TWO such salaries… so we live on one and save the other. Makes for close to a 50% savings rate, although for the poll I had to settle for 31%+…

    Looking at our circle of friends who probably have similar income streams, there is no doubt we are the most conservative, with the least amount of “things” to indicate we are doing well. It is just a concious choice we have made – it opens up all sorts of possibilities for us in the years ahead.

  7. SAR on September 20, 2010 at 11:03 am

    Having just cast my ballot I see that I am the lone member of the 56k – $75k (0-5%) club! Hah.

    I have to agree with the point made by “teddyu” and confirm his/her statement regarding individuals who are choosing to pay off debt before investing any significant portion of their salaries. I myself will make $60,000 this year and will “save” very little of that. I graduated 3 years ago from a M.Sc. program and have fairly significant ($30,000) student loans as a result. Currently, 20-25% of my monthly income is used to pay of student debt which is shrinking appreciably as the months go by. In addition, I have a beautiful 10-month old daughter who (as I’m sure you all know) does cost a few pennies each month.

    Having said all that, I do not feel at all like I am living paycheck to paycheck, or that I have left myself open (or anymore open than other people in my situation) to financial meltdown than others. I have $2000 cash saved in a HISA and an unused personal line of credit (interest rate 1% higher than student loan) which I could draw on if needed. In addition, I own my car outright and am fully insured (life, health, disability) – I sleep very comfortably at night.

    SO, there you have it. I thought I’d give a first person account of a young professional who makes a decent (although not high) salary but isn’t currently contributing much to their savings.

  8. Sampson on September 20, 2010 at 11:14 am

    Oops, after reading the comments, I hadn’t considered the mortgage prepayments. No worries though, still in the 31%+ category ;)

    There’s a lot of data there, I’m more curious how you will plot this data.

    • FrugalTrader on September 20, 2010 at 11:24 am

      @Sampson – that’s what I’m hoping that you’ll help me with. :)

  9. dauphin on September 20, 2010 at 11:19 am

    My gross income is about $15k per year, and I manage to save about 40% (approx. $6000) a year.

  10. bob on September 20, 2010 at 12:28 pm

    Unfortunately, there actually isn’t a lot of data there. Or at least, not a lot of data that can be parsed because it lumps lots of things together.

    Why, for example, would you lump mortgage prepayments in with savings, but not simply mortgage payments?

    If someone was taking TeddyU’s/David Trahair’s strategy of paying down debt quickly, presumably they might also take a shorter amm. than they others would take, rather than a longer amm. with prepayments.

    Separating debt payments and savings is a pretty tricky thing to do.

  11. Nathan on September 20, 2010 at 12:46 pm

    I hadn’t even factored in mortgage prepayments into savings. I’ve been paying the maximum double up payment every month on my 220K 35 year mortgage. Being single that doesn’t leave a ton of money left for RRSPs, TFSAs etc. Without mortgage prepayments I was calculating my savings rate to be just over 10% but when you factor in prepayments that takes me closer to 25%. Still not sure I can really accept that as my savings rate.

  12. nobleea on September 20, 2010 at 1:05 pm

    I agree with bob.
    I would also include (somehow) payments to a defined benefit Pension plan. Two teachers (or nurses) might have a very poor savings rate, but are not going to be hurting later.
    For the purposes of this poll, I followed your definition of savings.
    But I might argue that one should include every payment that increases your net worth (paying down debt, savings, investments). The fact that the debt is associated with a car or TV shouldn’t matter. That’s just a poor use of money. But one can still put lots of money in to investments and have them do poorly.

  13. Ben on September 20, 2010 at 1:32 pm

    Interesting poll. The results will have some meaning, but will have to be taken with a grain of salt.

    I suspect that a lot of people really don’t know what their savings rates are. Easy to know the income (quotient), but more difficult to know the savings (divisor) unless software/Excel are used religiously.

    Like teddyu said above, the effect of mortgage and other debt payments is important – but difficult to get everyone to agree on a single way to account for this. One simple solution is to plug your regular payments into a mortgage calculator, and see how much the mortgage will go down in 1-year, then add this amount onto your savings. Similarly for other debts.

    A savings rate could be 30%, savings divided by income.
    But, (ignoring asset price inflation from equities, house value, etc!), the net worth could be growing at a rate of 45%, delta assets divided by income.

    Basically, I think a savings rate should include all activities that add positively to your net worth. I used FT’s metric to answer the poll, however.

  14. DAvid on September 20, 2010 at 2:01 pm

    FrugalTrader said: “@teddyu, good point. I would consider any mortgage prepayment or excess mortgage payment top up to be savings as I could stop those payments at any time and put them into RRSP/TFSA or other.”

    I would consider any mortgage prepayment or excess mortgage payment top up to be savings or exactly the opposite reason — you could put all the money you had as savings into a mortgage pre-payment!

    As a commentator on another topic stated, as long as you have debt, you really have no savings…..

    I also include defined pension as savings. Although it is easy to determine contributions, it is difficult to determine value.


  15. bob on September 20, 2010 at 2:19 pm

    As a commentator on another topic stated, as long as you have debt, you really have no savings…..

    I’m not sure whether you are meaning this in a good way or a bad way.

    Debt is not necessarily a bad thing. It is simply an instrument that, if treated correctly, can be used to build wealth. You can leverage debt for investment purposes (as FT does in the Smith Maneuver). You can use debt to start a business, which will ultimately pay you back and more. You can use debt to finance an education, which will ultimately pay you back and more.

    Many financial planners would argue that you should put all of your savings down into a mortgage (or other non-deductable debt). That’s why I like the suggestion above that anything that contributes to net worth should be included as “savings” — including just regular old mortgage payments.

    One needs to consider the difference between “good debt”, which is used to finance assets that increase in value (e.g., education, businesses, etc), and “bad debt”, which is used to finance assets that lose value (e.g,. snowmobiles, etc.). This, of course, is a tricky enterprise. What do you do with vehicles — sure they depreciate, but perhaps they allow you to have a better paying job closer to home.

  16. Brian on September 20, 2010 at 4:01 pm

    For me I am in the 5% region because I am working on being debt free ( other than the house, for now ). But once I am out of debt I will crank it up and build an emergency fund which should be liquid. My approach is very much on the cautious side but I think everyone should have an emergency fund that is in cash or something not subject to market ups and downs.

  17. CanuckLandlord on September 20, 2010 at 4:14 pm

    While I agree that anything that contributes to increasing net worth could be considered savings, I wouldn’t be quick to put everything in that column. It’s like putting your car under the asset column on your balance sheet, sure it beefs up your net worth on paper, but does it really?

    For mortgages, I’d include prepayments, but I wouldn’t include the regular payment. My thinking is that the regular payment is a sunk cost that applies to the initial purchase of the asset (if you consider your primary home an asset), while the prepayments are made specifically to decrease your interest expense and thereby realize a savings.

    Would you include life insurance premiums as ‘savings’? What if they were paid on a whole life policy with a cash value? I wouldn’t unless I exercised that option.

    Bravo to everyone who is saving above the rule of ten!

  18. Sarlock on September 20, 2010 at 4:20 pm

    Mortgage payment principle should be included as savings as well. Only the interest portion of your mortgage payment is a “true” expense; the principle pays down the balance of the loan-it doesn’t affect the net worth on your balance sheet (it lowers both assets [cash] and liabilities [mortgage debt]).

  19. bob on September 20, 2010 at 4:37 pm

    @ CanuckLandlord. You said:
    For mortgages, I’d include prepayments, but I wouldn’t include the regular payment. My thinking is that the regular payment is a sunk cost that applies to the initial purchase of the asset (if you consider your primary home an asset), while the prepayments are made specifically to decrease your interest expense and thereby realize a savings.

    I’m going to have to disagree. Thought experiment: two people with identical salaries buy identical houses. One chooses a lower monthly payment of $1500/month (longer amm) but uses prepayments to increase their monthly payment to $2000/month. The second person chooses a higher monthly pament of $2000/month (shorter amm.) with no prepayments. They both pay identical amounts and so pay their house off on the same date, but according to you only one of them can be classified as a ‘saver’ while the other can’t? Doesn’t seem right to me.

    @ Sarlock
    the principle pays down the balance of the loan-it doesn’t affect the net worth on your balance sheet (it lowers both assets [cash] and liabilities [mortgage debt]).

    Huh? Except that you gain some assets in return — namely the house . . . Or am I missing something?

  20. Sarlock on September 20, 2010 at 5:14 pm

    From an accounting perspective, your increase to net worth occurs when you receive your income payment (wages/whatever). You can choose to do two primary things with it: spend it, which then decreases net worth back down, or save it, which has no impact to net worth (since your net worth increased when you were paid).
    Think of it this way: The instant after you have received your income payment, you have saved 100% of it because you haven’t spent any of it. Then, as you spend some/all of that payment, your saving % will decrease and so will your net worth. Whether you keep that income as cash, put it on your mortgage, put it in to an RRSP, whatever, there is no further net worth impact other than the fact that because you didn’t spend it, your net worth didn’t decrease.

  21. Sarlock on September 20, 2010 at 5:18 pm

    An example:
    $1,000 payment received:
    ASSETS: Cash: $1,000, House $1,000: $2,000 Total
    LIABILITIES: Debt $1,000
    NET WORTH: $1,000

    Scenario A: Spend it on groceries:
    ASSETS: Cash: $0, House $1,000: $1,000 Total
    LIABILITIES: Debt $1,000
    NET WORTH: $0

    Scenario B: Pay off the loan:
    ASSETS: Cash $0, House $1,000
    LIABILITIES: Debt $0
    NET WORTH: $1,000

    Notice that your net worth in Scenario B does not increase from the original example. BUT, in Scenario A, you’ve spent that net worth and didn’t save any of it.

  22. nobleea on September 20, 2010 at 6:26 pm

    Sarlock, that’s not a valid comparison between the two scenarios, since you have to buy groceries.

    Think about it this way….I borrow 50K from a HELOC and invest in safe equities. Each paycheque I pay a little bit of it off.
    My friend does not borrow, but invests the same amount each month as I am paying on my loan.
    I argue that we are both savers.

  23. Jungle on September 20, 2010 at 6:26 pm

    I voted. I used family income and savings. Like someone else said above, the people visiting this site are probably good with money anyway.

  24. lisa schamess on September 20, 2010 at 6:34 pm

    at present, i am “saving” in a two-tiered fashion, and the net results won’t really start to show till next year.

    I have a huge savings goal of 10% straight out of every paycheck and 3-% out of freelance work and windfalls. That’s the current, real savings. I have an additional goal of $12,000 to pay for a big trip I took last year and save for an equivalent one next year. That last category is not yet “savings” in the conventional sense; it is money I am scrimping to pay down debt. Eventually, when/if I am debt free, I may be able to save 30% or more of my income. It’s ambitious, and really represents a total lifestyle change.

  25. lisa schamess on September 20, 2010 at 6:35 pm

    i should clarify that i am a single parent on the low end of the income spectrum here. in fact, i have no paycheck at all for about 10 weeks each year. So 10% does feel huge to me!

  26. D on September 20, 2010 at 6:42 pm

    Back at ya Frugal- I am goal-oriented regarding my savings, not a set percent. I decided that I wanted to take time from my job and pursue my passion for travel in Sept. 2008. I saved so HARD. Somehow, I managed to save over $13 000. in 18 months. I even surpised myself! I saw 4 countries in 3 months and came home with cash left over. I only made $22 000. in 2009, so I must have saved about 50% of my take-home pay. No, I am not a kid- I live in my own mortgage free home and drive a 10 year old car. It’s all about how bad you want it!

  27. DAvid on September 20, 2010 at 6:59 pm

    @ bob in 17,
    It really does not matter if it is good or bad debt. If you have an outstanding loan of $10,000 and savings of $10,000, you will have $0 if the bank calls your loan. It also balances to $0 on a consolidated balance sheet.

    The good debt / bad debt discussion is a whole different topic, and in my opinion, simply a justification for borrowing for some things versus others. In the grand scheme of things does it really make a difference if you borrow to finance your education & simultaneously pay cash for the new sled, vs the opposite? While there may be some small tax relief by using the loan for certain investments, the bigger question is really making a decision on the best way to manage your money!


  28. bob on September 20, 2010 at 7:22 pm


    Well, there are certain differences, but in principal I could probably get on board with that conception. Which is all the more reason to include debt repayment as part of the “savings” category.

    To my mind, there is much too much emphasis placed on “savings” and far too little emphasis placed on paying down debt.

    Partly this is justified, but partly it is a product of the somewhat misguided believe that “debt” is inherently bad rather than as a potentially useful tool that can, in the long run, help make money rather than something that just costs money.

    There was an article recently in the G&M(?) about differences in the way multi-millionaires think about money vs the way most of us think about money. For most multi-millionaires, debt is not something to be avoided at all costs, or paid off as fast as possible, but rather one of the most effective ways to leverage resources and to make more money.

  29. R on September 20, 2010 at 8:08 pm

    hey guys, I like to look at it from expense view as well: how much do you spend per week (month) excluding mortage, insurance, telecommunications?

    That is, food, clothes, fun money (that vacation, that new TV, the night out), emergency money?

    I’m from Calgary and every one I talk to seems like they’re spending ~$1K to 1.2K/mth in this categorary

  30. DadInVancouver on September 20, 2010 at 8:42 pm

    I really think it’s next to impossible for most Canadians to save a significant amount of money long term.

    First of all, our income and sales taxes are extremely high compared to most other places in the world. We pay more for just about everything in the great white North.

    Second, our home prices are some of the highest in the world, especially where I live in British Columbia. After the mortgage payments, property taxes, utilities and other associated costs, there’s little left over for savings.

    Third, if we are fortunate enough to stash away our earned income, most of it is eroded by inflation over time. Many Canadians invest in low yielding GIC’s and bonds that don’t even keep up with inflation.
    Others invest in the markets, however there’s also no guarantee that they’ll achieve the past averages of 7%/year moving forward.

  31. W.T. on September 20, 2010 at 9:17 pm

    This is a very interesting POLL, and a very interesting debate in the comments. As a Renter – I don’t have the same issues trying to determine whether to include mortgage payments as “savings” (that will probably change in the next 5 years).

    My journey to “financial freedom” began about 2 years ago – and I’m happy to say, for the most part I’m debt free. My only blemish, is a recent car loan (I know – I probably should have bought used, but at least it’s financed at 0%).

    I make 80K/year, of which 10% is automatically deducted in my Company’s Stock Purchase Plan. At the end of the year – they will match 50% (of which, it is vested at 10% a year).

    In addition – I automatically contribute $500/month to RRSP’s and $400/month to my TFSA account.

    Including my SPP, I calculate an ~25% savings rate.

    I sock an additional $100/month into a “vacation” account and $50/month into “big purchase” account. I didn’t include these last 2 numbers into my calculation – since they are earmarked to be spent within a years time.

    Prior to the “epiphany” I had 2 years back – I was in deep “doodoo” with my finances. No direction and no idea on how to start, to dig myself out of the hole I created for myself. It’s interesting to see my Budget Spreadsheet from back then – which was entirely made up of debt repayment, and almost 0 savings. It’s taken baby steps and a change in mindset – but needless to say, I’m very happy with where I am with my finances now – and how that has impacted all other aspects of my life.

    Without this site, the contributions from those that write articles and the many people who comment and share their thoughts and experiences – I don’t know, if I would have been able to get to the point that I’m at, now.

    So from me – to the MDJ community, I just wanted to say…Thank You! =)

  32. P on September 20, 2010 at 10:43 pm

    Interesting discussion. From my perspective – I think I’m in the high end of the salary and savings percentages.

    My wife and I are both 31. Our gross income is about 275K per year together. We tend to save about 60% of this amount…mainly because we try to live well below our means. That’s allowed us to now be mortgage free and have about 500K in invesments; net worth about 850K with no debt. We figure no matter what happens…we’ll be in a decent position for life.

    The difference for us is that we don’t drive fancy cars, we don’t buy clothing at ridiculous prices and we enjoy cooking at home vs. eating out. We buy most things second hand, including ski’s, cars, etc etc. I doubt most of my friends know how comfortable we are from a financial perspective….and I prefer it that way.

    So many of my colleagues, in similar financial positions, do the exact opposite. They spend like crazy, and focus way too much on the material goods they need. They buy huge homes, and buy every new gadget and new cell phone that comes out. God forbid they lose their jobs.

    The key for us: the minute our gross income went over 100K – we sat down and decided that we would NOT change our lifestyle no matter how high our salaries got. So all that extra money flowed down to savings…and we’re super happy with the life we have. We figure we were so lucky to have access to higher education…and benefit from good opportunities presented to us.

    It’s been a good strategy so far..who knows what the future holds. If we ever get layed off and need to find employment at lower be it…no changes to our life. So far we’ve found happiness in simplicity.


  33. George on September 21, 2010 at 12:11 am

    @DadinVancouver (comment 32) – Your statement seems to be contradicted by the responses to the poll. Plenty of people (myself included) have savings of 20% or higher.

  34. teddyu on September 21, 2010 at 12:49 am


    Except the readers of this blog are not “most Canadians”.

  35. robb_stark on September 21, 2010 at 1:06 am

    Yeah, its clear that the readers of this blog, for the most part, really have their financial **** together.

  36. chad on September 21, 2010 at 2:22 am

    my familly save over 50%

    if we make 30,000
    tfsa 10,000
    rrsp 5400
    resp 5000

    and live off the rest not many people can do that on 1 income proud of familly and my kids
    yes we live “cheap” like no cable but hey everyone has choices

  37. Future Money-Bags on September 21, 2010 at 7:31 am

    Since I fall into a catagory not in the poll I will briefly share my savings habits.
    I make under $35k
    I spend $5k/year on rent (over 15% of my income)
    Over the last year I have saved on average of 65% of my income.

    And my saved, I mean it is deposited into my investments or my bank. (not debt-repayment)

    And my end-goal for this year is to save $20k.

  38. Future Money-Bags on September 21, 2010 at 7:34 am

    You max out your RRSP despite being in such a low tax bracket? It is good for the tax refund and savings and compound interest, but if you are young, there is no way you will ever be making $30k/year in 10-20 years from now.

    When you have to withdraw the money for retirement you will end up paying the same amount of tax all over again.

    Despite that, good savings. Keep it up.

  39. Echo on September 21, 2010 at 2:32 pm

    @Future Money-Bags
    I have often heard that argument about not contributing to your RRSP in low income earning years, or if you are going to be low income all of your life. I’m just curious, if you are very young, doesn’t the benefit of compounding interest outweigh the future higher tax implications?

    I suppose they would be better off investing in a TFSA now, but prior to that option?

  40. Steve L. on September 21, 2010 at 3:18 pm

    One thing us investors need to take very seriously is how all these debt laden people will affect markets.

    We all seem to agree that people who max out consumer credit, buying *stuff*, are quite frankly foolish and stupid.

    So if those people continue on literally to the breaking point, this 30 year debt bubble is going to burst hard, and these people will no longer be buying cars, TVs, houses, and other *stuff* they don’t need. THIS WILL CREATE POOR GROWTH FOR MANY COMPANIES IN THE MID AND LONG TERM. And our markets are heavily consumer driven.

    Let’s say they all wisen up like we preach, and they all switch into frugal, saving, paying off debt mode,and these people will no longer be buying cars, TVs, houses, and other *stuff* they don’t need. THIS WILL CREATE POOR GROWTH FOR COMPANIES IN THE MID AND LONG TERM. And our markets are heavily consumer driven.

    Basically, we’re ALL damned if THEY do, damned if THEY don’t.

    We might have trouble saving for retirement if markets have a “lost decade”. It’s happened before with far less cards propping up the house.

  41. S on September 21, 2010 at 3:23 pm

    Currently, my partner and I would be classified as saving +31% because we are debt free and after fixed expenses, almost all of our disposable income is going into savings.
    But we are in the process of looking for our next investment property and once we make our next purchase, all residual income will be diverted to pay off this new asset.
    Does this mean we are no longer saving or saving very little (TFSA,RRSP)?
    I agree with Bob, repayment of real estate principal should be included in the savings calculation.

  42. DAvid on September 21, 2010 at 3:50 pm

    Yes, if all your ‘savings’ are interest bearing. However if you have invested in tax advantaged instruments, then the penalty is lower. Both Capital gains and dividends are taxed at lower rates than general income (interest, RRSP, or employment income). A low wage earner would be at advantage to buy a few banks, utilities, and transportation stocks. “Think Monopoly”

    If you are very young, you are wiser to invest outside your RRSP & use the contribution room when you salary increases.


  43. Melanie Samson on September 21, 2010 at 6:43 pm

    Previous to reading the comments, I put in household income and calculated 31+% (including my defined benefit pension). I didn’t consider the fact that we still have a negative net worth due to student loans.

    However, for the purposes of this poll, I think the amount of debt isn’t relevant as long as it isn’t increasing (IE credit card issues). Our high rate of savings has us on the right track — if things continue as they are, our net worth will be positive very soon, debt will continue to go down and our savings will continue to grow rapidly.

  44. 123cruncher on September 21, 2010 at 11:36 pm

    Interesting little survey, my only concern is that most people on your site are into money management or at least eager to learn about it. So, there is more drive and commitment from them to save than people surfing youtube videos right now. So the results may be some what one sided.

    I find even though I tell most of friends about money/investment sites, they just want to show me funny crap on youtube.

  45. youngandthrifty on September 22, 2010 at 3:27 am

    Interesting- you’ve got a large spread so far, and nothing really “jumps out”.

    Wow “P” I wish I was in the same boat with you, with 275K annual gross income. I think I would do the same, good on you for stashing your money away, it will pay off in the long run.

  46. sco on September 22, 2010 at 3:48 pm

    It shouldn’t matter how much one makes at any particular moment. My rule is simple. Invest 50% of net income (this includes the average of capital gains over the last 5-10 years) and make budget/life choices to fit the remaining 50%.

    If you have a $50k paycheck and $50k student debt, you’re not ready for a mortgage or to bring new people into this world (that is if you ever want to be financially free). Rent the cheapest room you can find, make your own food, learn to invest and invest at least $20k/year. In 10 years you’ll double your net annual income and be ready to think about getting a house and having children, while still saving/investing 50%.

  47. bettyvee on September 22, 2010 at 4:06 pm

    Easier said than done sco..trying though :p MDJ inspires to keep trying THANKS FT

  48. bob on September 22, 2010 at 4:19 pm

    Ahh yes. After all, only rich people should have children . . .

  49. Rebecca on September 23, 2010 at 12:10 am

    I think the poll should identified single vs. double income households. It’s easier to have a higher saving % for double income earners. Unless eating out, driving in two car is the norm for a couple, there are savings from the combined life style.

    I do have two kids, but the net cost is about the same for us right now, with and without kids . Kids – more diaper, second hand clothes, supplies etc but No Kids – more eating out and other entertainment cost. Future education cost is a different story and I hope by then, the increase in my income will cover the basic tuition cost – another 14 yrs to go…

  50. Financial Cents on September 26, 2010 at 8:41 pm

    Interesting and fun post FT.

    Wow “P” – great on you and your wife – amazing.

  51. Brian Poncelet, CFP on September 28, 2010 at 12:04 pm

    Hey FT,

    This is article is one of the best yet!

    I deal with a number of government employees and people who have no pension.

    Government employees currently (here in Ontario…OMERS) will be expected to have about 10% OF THEIR GROSS INCOME TO SUPPORT THEIR PENSIONS IN THE NEAR FUTURE.

    This means they get to spend what ever is left after taxes a deductions, etc!

    Also, not talked about is they have great benefits…which cost a lot of money. Like when they get sick and need time off work. Risk management.

    So a lesson here is you (people not working for the government) have to save a lot of money! If you want to live in the same lifestyle.

    An example is a 35 year old (making $80,000) wanting to retire at age 65 with about $65,000 in today’s money, will have a value of over $1,300,000 in his pension. Of course, his wife only gets 60% of that (his paycheque) when he dies.

    “OMERS is one of Canada’s largest pension plans, with more than $48 billion invested in a wide range of companies and assets around the world. OMERS provides retirement benefits to 400,000 members across Ontario.” … from their website.

  52. Joel on September 28, 2010 at 12:07 pm

    I was saving around 50% of my take home pay of my “ok” income but I just purchased my first home and I’m not sure what I’ll be able to save after that. I have some renters so hopefully that will help!

    There seems to be a lot of incomes over 100k$, I hope to be there someday!

  53. cannon_fodder on September 30, 2010 at 8:30 am

    I just saw this poll and I didn’t see much mention as to including investment income in the calculation. It seemed geared towards salary.

    I found it very interesting to consider whether mortgage principal payments are to be counted as “savings” or not. I fall into the “not” camp. I also wouldn’t want to try and make myself feel better by calculating the difference between the least aggressive payment schedule vs what I have and take the difference as savings. It’s a personal choice but I only view prepayments as falling under savings.

    Mortgage payments aren’t discretionary. Prepayments, like RRSP, TFSA, RESP and nonregistered accounts are discretionary. That’s how I distinguish between the two perspectives. But I wouldn’t want to try and change the opinion of anyone who holds the opinion that any debt reduction payment is savings. Thus I don’t count credit card payments or car loan payments as savings. That’s debt reduction plain and simple.

  54. Sam on October 2, 2010 at 4:36 pm

    I have been saving over 20% of my gross income for all these years. I am now in my 50s and got so used to saving that I have almost forgot how to enjoy spending. I look at myself and feel there is no bigger pathetic person than me.

    So, my advice to all those youngsters: Saving is good but don’t make it as an obsession (% of Gross income, a million dollar mark etc. etc.) otherwise you will end up like me. Lots of money but don’t know to spend or ‘enjoy’ spending. During your journey to saving, if you hit the target well and good but do not stop enjoying life.

  55. Paul on October 3, 2010 at 11:18 pm

    I don’t really save any money right now. It all goes into RRSP, TFSA and mortgage. Hopefully, I’ll be able to save eventually.

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