Comments on: How Large a Role Does Income and Net Worth Play In Your Propensity to Save?

By: Anonymous

Anonymous — Tue, 14 Jul 2009 03:53:10 +0000

The Millionaire Next Door delves into this topic extensively; many folks that make handsome salaries have a net worth of a far lower ratio to their earnings than people of more modest means, simply because they know how to make their dollars stretch.

By: Anonymous

Anonymous — Tue, 14 Jul 2009 01:24:00 +0000

Some books on very wealthy people suggest that they got there partially by being so frugal. So, you never can tell by income alone.

By: One Frugal Girl

One Frugal Girl — Mon, 13 Jul 2009 02:36:15 +0000

You know I have to agree with Joe Taxpayer as well. I definitely think ingrained habits from childhood and young adult may influence you more than any other factors including income and net worth.

By: so alaurable

so alaurable — Mon, 13 Jul 2009 02:34:20 +0000

I'd agree with JoeTaxpayer that there could be a correlation between having less money growing up or earlier in life and spending habits later. I had a family member who became very wealthy, and her husband would tell funny stories about how she sent him back to the store because he forgot to use his coupon. Even though the price of things isn't an issue when you have more income, I don't believe in spending more than necessary.

By: JoeTaxpayer

JoeTaxpayer — Sat, 11 Jul 2009 13:10:42 +0000

I think there's likely a loose correlation between the money that was available as one grew up and current spending habits, even at high current income. Growing up with just my mother working and money tight, I was very aware of spending habits. As an adult, I am more aware of sales and prices than my wife is. (Note, we both work, she makes a bit more than I do, I'm proud to say.) So things like grocery shopping is up to me. I probably save $4000-$5000 a year by timing purchases to match sales. A dollar saved takes about $1.75-$2.00 earned, so we're not talking small numbers. Who would dismiss $8000 so readily for a small effort?

By: pharmboy

pharmboy — Sat, 11 Jul 2009 05:00:18 +0000

I think there surely is a direct correlation between high income and propensity to save. The positive behavior and character traits that cause someone to be worth a high income will often cross over and cause that person to practice prudential personal finance.

Personally, my wife and I do live on a budget and we are both frugal, but we rarely use coupons and we definitely could consider price more in our monthly purchases.

However, I keep assuming we'll do more coupon clipping, and try harder to win "the game" of saving money once my wife gives birth to our first child this fall. Right now we both work full time (and we both often pick up overtime), so we justify slacking a little bit as a reward. It's just hard to justify using your day off to peruse Sunday newspaper circulars when our income is well over 200K. But I bet we'll change when we see how much we can save by watching for diaper/baby food sales.

By: Betsy Bargain

Betsy Bargain — Sat, 11 Jul 2009 04:32:30 +0000

Right now, trying to save money is a necessity for me. I can't imagine that if circumstances changed and I had lots of money I would do things any differently. By now the habit of saving is very ingrained in me. Just because your income is high, why should you spend more than is necessary? Save your money for the things which you think are most important.