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I am a 28 years old male, living in the US. Currently working full time with the salary of $84K per year. I also have a dependent wife(same age as mine), who is currently studying in a uni, graduating soon. We have a total of about $75K in savings.

Since last 1 year I am feeling very much behind in life in terms of total money we saved. I keep feeling that, with that salary I must have done more and as we both are about to get 30 years old, we should have more in savings, plus a car and also an ability and confidence to buy a home and not continue living in a rented place. This feeling is literally haunting me day and night. It became so bad at one point that I had to take a therapy for some time to control the anxiety 6 months ago. The reason behind this seems like, seeing other people of the same age around me doing all the things which I feel I should already be doing. Like buying a house, investing in a second property, having a fancy car etc. So my question is- Did I save enough for my age? Am I falling behind and should be saving more or take some investment risks to earn more?

We don't have any debt or loan. We have also avoided buying a car so far, living in a rented place close to my workplace and short commute to my wife's school.

Thank you!

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    The money you've saved doesn't matter as much as how much money you're having out there working for you (investing). Start researching investment strategies and you'll find the money. Also, what's in the past is in the past. You can choose to live there or start where it matters, today. – Jonast92 Jul 15 at 22:20
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    Having a fancy car isn't going to help the situation. If you think you need a fancy car to be happy, savings isn't the problem. You also have to consider where you live to judge how well off your salary leaves you. That said, $75k in savings is not bad, per se, though hopefully that is in addition to any retirement account you might have. – chepner Jul 15 at 22:42
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    Also think about whether you really need a car. In the US this is often true due to practical reasons, but depending on your situation, not owning a car could save you a lot of money (and hassle, IMO). Many people don't realize how much money&time they sink into owning a car. Free yourself from the "a car is an essential part of life"-mindset. By owning only a cheap car, or no car at all, you can raise the quality of life via other means, e.g. restaurants, travels, good-quality food, or whatever. You might not even miss it. A good bike can be a decent alternative and also improves health. – Erlkoenig Jul 16 at 7:51
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    Comparing yourself to others is generally not super constructive. It could make you feel good even if you're not saving enough money for a comfortable retirement (or a rainy day). Or it could make you feel bad even if you're doing everything you can to earn and save money. It would probably be better to set up a comprehensive budget and plan that would tell you what your monthly earnings would be when you retire (or whatever else you care about). Then you can try to figure out some steps to improve this or see how any given expense affects this and whether it's worth it. – NotThatGuy Jul 16 at 7:54
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    Other people are also accruing debt doing such things. The typical American household carries an average debt of over $100,000. You seem to be building your life on a solid financial basis, why not stay this way? – Quora Feans Jul 16 at 7:56
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40% of Americans can't cover a surprise $400 expense out of saving

The average American has $6,200 in credit card debt

You are way ahead of most Americans

Like buying a house, investing in a second property, having a fancy car etc.

And how much savings do they have? Probably not as much as you. How much credit card debt do they have? Probably a lot more than you!

What you are worried about is called Keeping Up With The Joneses. You should keep going to therapy, but focus on what makes you intrinsically happy. If you are constantly worried about out-buying your neighbors and friends you will be miserable and broke.

... plus a car

Given your savings, you could pay cash for a very nice car (but buy a simple car anyway). Given $75K, you could go to just about any used car dealership and pay cash for a good used car. Check out the Kelly Blue Book value before buying and buy a car 4 or 5 years old.

Do not buy a "nice" car. People can't see the kind of car you drive at an interview (unless the company has some REALLY bad policies). You can get a reliable car with decent gas mileage for under 10k in most places.

ability and confidence to buy a home

Unless you're one of very few cities (New York and San Franciso come to mind) $75K (or what's left after the car) should let you put 20% down no problem.

Some Reading

Check out No More Harvard Debt. It's a blog about a Harvard MBA graduate that bought a nice house, 2 nice cars, a motorcycle, and spent ~1500 a month on entertainment.

He was 100k in student debt and decided to pay it off in a year. There are several posts where he asked if he bought the stuff because he wanted it, or because his friends had it.

Edit

If you need to hear harrowing stories from people on the other side who are drowning in debt, The Dave Ramsey Show (a conservative money radio show), takes call after call from people who have two times their yearly income in debt.

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    Average does not necessarily equal to median. So it may be possible that the average American is screwed up financially while in reality less than half of them actually are. Or vice-versa, i.e. the average American is screwed up financially but actually more than half of them actually are screwed up financially and can't pay an extra 400 bucks out of their savings. But maybe they meant median instead of average, in which case they should have used the correct word... – AccidentalBismuthTransform Jul 16 at 8:55
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    Above average also doesn't mean not bad. The average is pretty bad. – user253751 Jul 16 at 9:36
  • Thank you very much for your detailed response :) . I am learning to see things with different perspective. – user4815 Jul 31 at 15:38
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While I completely agree with the answers that your situation is not as dire as you think it is, I'd like to give some practical steps you can take to help your perception of where you're at financially.

First, make sure you control where you money is going. You at least are not spending more than you make, which is great, but being in control of your money may give you more peace of mind that wondering where it went.

Write out a budget every month that lists your income first. Then start listing your expenses in order of priority. Food, shelter, utilities, transportation, etc. Put luxuries and debt payments (if you had any) last (in that order). Most people use up all of their income before they get through all of the expenses, and have to either find some extra income or give up some expenses for the month.

It will take a few months to get the budget right, but since you aren't in debt it's not as big of a deal. You can pad your budget a little to reduce how often you go over (and can carry over funds to the next month if you like).

The hard part is sticking to it. Once you're out of money for a category, you either need to stop spending in that category or steal some money form another category that you can cut.

You should also have an emergency fund that you can use to cover any unexpected, necessary expenses. 3 to 6 months of expenses is a common goal that should cover most unplanned expenses. The goal is to be able to cover these expenses without going into debt. You can have more or less depending on how stable your job situation is and how much expense risk you have (e.g. since you don't own a home you don't have to worry about having to pay for a new air conditioner or water heater).

Since you have no debt, you can then start saving for retirement. 15% is a common rule of thumb that adapts as your income grows, but you may want to be more aggressive now to have more peace of mind.

At this point you now have complete control of where your money goes. Now you can start setting some goals that you want to use your extra money for. Want a nicer house? Great! start saving up for a down payment if you want to get a mortgage (making sure you can afford the mortgage when you get it) or saving up for a full purchase if you're extremely committed. Want a nice car? Fantastic! Start saving for a car that you can pay for in cash (not a down payment as loans for things that go down in value are not wise investments).

Want to start a college fund now? Very wise. You may not think you need to save for college before you have kids, but college expenses are rising much faster that inflation, so the sooner you start the better so that you can invest in fund that outpace college inflation.

To echo the other answers, don't worry as much about what other people are doing. As you accomplish your financial goals you'll have more freedom than they could ever imagine (and you won't be BROKE).

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Congrats! You're doing much better than you think.

seeing other people of the same age around me doing all the things which I feel I should already be doing. Like buying a house, investing in a second property, having a fancy car etc.

By not "keeping up with the Joneses", you are actually doing yourself a favor. Your peers may "look" more prosperous, but they are incurring the danger that you have avoided:

We don't have any debt or loan.

What a tremendous mix of good fortune and accomplishment that you can say this. Many, many people your age have negative savings (net worth) after accounting for debt.

Some published guidelines/benchmarks for savings are:

With almost 1X salary in savings at age 28, you're doing quite well. There is nothing wrong with not owning a home or car if you don't need them.

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  • half your salary stored in retirement account? People put 50% of their salary in retirement? What age do they want to retire? – gerrit Jul 16 at 11:31
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    @gerrit, that's not putting away half their salary. That's reaching a balance equal to half their annual salary by the time they are 30. – user4556274 Jul 16 at 12:42
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Most people in developed countries live in debt, most of the time.

It has its advantages (esp. for the economy as a whole), the drawback is less financial security and less freedom of decisions. It also drives prices up - your earned money compete with the money people will earn later (and most people's income between age 20 and 50 goes steadily up faster than the inflation).

You are on the other side.

  • You have no debt, you have savings. Almost an year of income in savings. You are rock-solid against losing job and/or some other unpleasant event.
  • Your wife graduates soon and will hopefully start working (and earning) soon.
  • You don't have a car and associated expenses and liabilities. You are lucky to also not need a car.
  • You don't have a home - it may be good or bad for finances and also good or bad for your well-being.
  • You probably don't have a credit history. Probably bad by itself but still better than bearing a debt.

So far, so good.

Trying to outspend your peers/neighbours/coworkers/etc may be good for the economy as a whole, but not so good for yourself in particular.

If your wife supports your general financial direction and if your therapy is not very expensive, you are going pretty strong.

p.s. Out-bragging your peers is WAY cheaper than outspending them. Keep in mind it is equally valid for themselves and take it easy.

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    "You probably don't have a credit history" - it's trivial to have a (great) credit history if you don't have debt by just having a credit card, buying things on that and paying it off before it accrues any interest. – NotThatGuy Jul 16 at 10:38
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user4815, I have great news.

You are simply

WRONG!!!

  1. Your salary is great

  2. Your savings are fantastic

  3. It is INCREDIBLE that you have no debt

Read those three points again.

Sometimes in life we are wrong. Once, I thought rainbows were caused by clouds. But I was wrong.

You are wrong! And that's great news.

Read 1, 2, 3:

  1. Your salary is great

  2. Your savings are fantastic

  3. It is INCREDIBLE that you have no debt

At your age everything is perfect.

Keep up the good work.

Here's a gold star since you rock:

enter image description here

My only suggestion - your wife should be working absolute minimum 20 hours a week (eg, at Starbucks or whatever). It's very easy to do college and work too. It's Wednesday so she can easily start this weekend. You will have $200 extra bucks in your savings by Sunday night. Enjoy!

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    It sounds like they're fine financially, why should she exhaust herself at a minimum wage job? You can get a lot more out of school if you don't have to work as well... And I'm saying this as a person who worked multiple jobs while going to college. I wish I could've focused on school instead. – Kat Jul 16 at 2:54
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    @Kat realistically, you can't do mentally taxing work for more than couple hours a day. Proper studying is not 8 hours a day. More like 1-2 hours, break, 1-2 hours. A part time job can easily fill in those sub-conscious processing time instead of doing nothing or spending more money. – Nelson Jul 16 at 8:07
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    I'm not convinced right now is a straightforward time to start working in the hospitality industry, in particular not in the USA. – gerrit Jul 16 at 11:32
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    @Nelson Some people have classes 8 AM to 5 PM, 5 days a week. And, between classes and homework and projects and studying for tests and exams, that's easily more than 40 hours a week (i.e. more than a full-time job) for most students (with at least a few classes who are actually trying to do well). I don't know if you would also recommend someone with a full-time job also get a second job just to "fill in those sub-conscious processing time", but frankly that sounds quite absurd to me (unless you actually need the money or you really want to). – NotThatGuy Jul 16 at 12:00
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    @NotThatGuy - Most people think of the light part time schedule of undergraduate college when they talk about the ease of having a part time job at the same time. OTOH, if you're in a 40 hours a week of class time in a graduate program and also in labs and/or the library until 11 PM at night, there's no time left over during the week. And it doesn't end there. Some weekend time also goes toward studies. If you're married and you add a part time job to that, it's a recipe for disaster. Work only if it means financial survival. – Bob Baerker Jul 16 at 15:39
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I'd like to suggest that your problem is not a money problem, but a perception problem. The enemy is between your ears.

At age 28, you have no debt, 75k in savings, a full-time job making $84k/year, and a wife who will I am assuming eventually receive her degree and also become an earner. You are supporting two people on your salary currently, and managing to save money at the same time.

What I do perceive in your description of your situation is fear. The fear borne of the unknown and also of comparison. "Compare and despair," they say.

To be sure, there are economic realities currently that give you some reasonable grounds for concern about your finances. But these are concerns we all share. For instance, it is hard to make money on money these days by just keeping it in a savings account or certificate of deposit. Higher returns mean higher risk. What portion of your monthly income are you willing to now divert into higher risk investments such as stocks, precious metals, cybercurrency, etc.? You are young and you can afford to take more risk for more return, tempered always by certain guidelines, such as having six months of living expenses in a prudent reserve.

Also, houses are expensive, cars are expensive, and there's no shame in avoiding those purchases until such time as you feel your finances make them "feel" much more affordable for you. We Americans especially seem accustomed to living on the edge financially, and that strung-out, on-the-edge feeling becomes the accepted reality. It does not have to be that way. By having no debt and -- compared to other 28-year-olds -- substantial savings ("Among those 34 and younger, couples without children have the most put away: They have an average of $4,727 in savings." See https://www.cnbc.com/2019/03/11/how-much-money-americans-have-in-their-savings-accounts-at-every-age.html), you have started on a different path from these strung-out unfortunates.

You have not discussed your job and whether you enjoy it, but if you do, or at least find it acceptable, then your position is even stronger.

Also, you have not discussed your daily record-keeping habits with regard to money. In my own experience, it has been important to record all my income and all my expenses, on a weekly if not daily basis, so that I am conscious and appreciative of where my money is coming from and where it is going. I also have a spending plan, and this plan is informed by my values. For instance, I don't value a constant stream of new clothes (nothing against those who do), and so my clothing budget is relatively small, but I value a constant stream of information on certain topics, and so my Internet subscription spending plan is large.

I describe this because, if there is an aspect of your spending that is "draining" your $84k salary on something you do not value, you will uncover it with this sort of regular record-keeping. Clarity is your friend here.

You may find, in fact, that you are saving too much, and that you need to do some spending in some other categories in order to balance your values here and bring some joy back into your life.

Last thing I would suggest: Find some pandemic-friendly way to celebrate your good fortunate -- perhaps to-go food from a fine restaurant for you and your wife, or a day trip to nice place to hike. You get the idea. Then, I would build that regular celebration of your good fortune into your schedule. Over time your fear will lessen, you will stop comparing, and you will feel some peace around this issue.

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  • Calling cyber-currency an investment is a bit much. It's speculation at best. There's no guarantee Bitcoin will outlive you. – jpaugh Jul 16 at 16:57
  • Speculative investment -- I don't view those terms as mutually exclusive. In my opinion, cybercurrency is perfectly okay as 1 to 5% of a portfolio, especially for someone who is 28, as long as they understand that it involves great risk and volatility. – Paul404 Jul 16 at 19:06
  • In my view, "investment" involves some hope of return that is beyond chance. (You can't force an index fund to maintain it value over time, but you reasonably "hope" that it will faithfully track an economy that goes up over a 10- or 30-year period, and that hope, while not guaranteed, is also not dictated primarily by chance.) "Investing" in a currency is like guessing which economy will do better. With a crypto currency, it's not even clear yet what that means exactly. I'm not saying you shouldn't do it; I'm just saying you shouldn't expect to gain a return from it. – jpaugh Jul 23 at 11:59
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You are seriously way ahead of most Americans. You have an amazing salary, a lot in savings at such a young age. It is hard for many to have $5,000 saved up in their accounts, because of so much they have to pay for. Mortgage rent, fees, bills, utilities, shopping, cars, phones, you name it. Since a house is an asset, you should look into getting one. With your salary, you can get a good sized home for a good price. I advise getting a house first before a nice car. Good luck and don't be discouraged!

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    The home part depends on where you want to live. – user253751 Jul 16 at 16:18
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    Whether buying a home is wise also depend on whether you expect to stay in the same place for a long time. Renting may cost more over time, but that additional cost buys you flexibility to move on relatively short notice with relatively little overhead. – gerrit Jul 16 at 16:20
  • @gerrit Where we live, a year of rent for an apartment is less than property taxes on a house. Renting saves even more money when maintenance costs are considered. The only issue is lost real estate equity growth, which can be gained with investments elsewhere. – axsvl77 Jul 16 at 18:43

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