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The 10 Year Savings Strategy: Saving money after you’ve already handled the basics

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What do you do when you’re already saving, investing, and automating your money? What’s the next step?

The 10 Year Savings Strategy at iwillteachyoutoberich.com

What to do after you’ve handled the basics. Use the 10 Year Savings Strategy to leave your friends in the dust.

I get this question a lot. “I’ve already set up my automatic infrastructure and I’m investing money every month. My 401(k) is maxed out and I have sub-savings accounts set up. What else should I be doing?”

So you’ve already handled the basics of personal finance: automation, negotiation, using my Scrooge Strategy advanced tactics, and you’re earning more. Maybe you have $10k in your account and you’re wondering what you should be doing next.

There’s always more to do. But be clear: Lots of people expect that after you handle the basics, you beat the next Mario level and get access to “secret” personal-finance investments.

While many people want “secret” alternative investments — despite all evidence pointing out that they don’t beat the market for individual investors — the truth is much more prosaic. It’s not sexy, but it will make you rich. Today, if you’re already handling your finances and are looking for the next step to get ahead, I’ll show you how to use the 10 Year Savings Strategy to leave your friends in the dust.

Step 1: Admit you’re like everyone else

If you’re already handling your money, you make more than you spend each month, and you’ve even implemented a Conscious Spending Plan and investment (as described in my personal finance book), this is for you.

The 10 Year Strategy involves asking people ten years older than you what they wish they’d saved for, and starting to save for that.

Sounds obvious, but it requires admitting that despite your superior financial abilities, you’re still going to have the same expenses as everyone else. Young people love to pretend we’re going to millionaires, work from the beach, and somehow magically make money and have low expenses all our life.

Here is what will happen to you as you get older:

  1. Yes, you WILL have a nice and very expensive wedding (even if you’re a hypocrite and think you’ll have a “small, beautiful” wedding)
  2. Yes, you WILL have kids and want to buy them nice stuff
  3. Yes, you will need things like family health insurance and life insurance and homeowners’ insurance and family vacations and other things that you can’t predict right now because you’re not in that life situation
  4. Yes, these expenses WILL come up. People like to believe they’re the exception. BUT YOU’RE NOT. YOU WILL HAVE KIDS. YOUR KIDS WILL BE WHINY AND REQUIRE LOTS OF DIAPERS. THEY WILL POOP ALL OVER THE PLACE AND REQUIRE 10X MORE PAPER TOWELS AND CLOTHES AND CRIBS. PLEASE BELIEVE THIS.

How The 10-Year Savings Strategy works

From my book:

The Ten Year Savings Plan (216)

If you’re in your 20s and you ask someone in their 30s what they wish they’d saved for, they’ll say things you’d have NEVER thought about:

  • Diapers
  • Homeowner’s insurance, health insurance, life insurance
  • Family vacations

I want to show you how much this will affect you, so yesterday I put out a quick survey to people in their 20s, 30s, and 40s. I got over 2,000 responses, and the results are fascinating.

What people wish they’d saved for in their 20s, 30s, and 40s

Savings Wishes in 20s, 30s, And 40s

No, I didn’t run fancy statistics on the responses.

Really fascinating data in there.

People in their 20s wish they’d saved more for travel, in their 30s it starts switching to retirement, and by their 40s, people are predominantly concerned with retirement. When we’re younger, we save for ourselves, and as we get older, we increasingly care about saving for our family. These trends are similar for nearly everyone.

As I wrote in my book, “…ask your parents what they worry about most. I’ll bet you their answer is, simply, ‘money.'”

So you’re making more than you spend, possibly maxing out your investment accounts, and this sounds reasonable. So why don’t people do this? Let’s take a quick detour down whiner’s lane to see why most people don’t take the simple step of implementing the 10-Year Savings Strategy.

Why they don’t do it #1: “I hate the President / bailout / taxes”

I recently did an online web chat with over 600 people from a newspaper site. I was walking them through some of my Save $1,000 in 30 Days tips, and yet many of them wanted to complain about taxes, bailouts, furloughs, and the government. As you know, I have little patience for people who debate minutiae and get nothing done. For every single complainer, have they ever read one good personal finance book? Have they maxed out their accounts or, if they don’t have enough money, earned money on the side?

Of course not. Because it’s easier to complain and to point fingers than to do anything about your money.

Here’s a common exchange I have with complainers:

  • Complainer: “Hard to save when the governor is taking 50% in taxes and wasting it!!!!!!!”
  • Seemingly calm yet-about-to-explode Ramit: “Yeah, that really sucks…so what do you suggest?”
  • Complainer: “Who knows. But this state is headed for DOOM!!!!!!!!”

Others complain that they simply don’t have enough money to save significant amounts of money. “If that’s true,” I tell them, “then you simply need to earn more money.” They don’t like to hear that. Often the responses are:

  • “Craigslist is only paying $10/hour” (So? You have to start somewhere. Or you can develop your skills to get a higher-paying job. Or network. Just get off your ass! Note that my readers have earned thousands and thousands of dollars following my strategies to earn more.)
  • “Easy for u to say but u dont have kids” (True. I wish it were easier, but it’s called “work” for a reason)
  • “I’m too exhausted after work and kids to get a part-time job” (That’s your choice, but if you make no changes to your work situation, why do you expect your finances to change?)

Complaining is fun for about 10 seconds. Then you realize that these same people will be complaining for the next three decades, while you’ll quietly be automating your money and growing your bank account and investment accounts each month — automatically.

I can’t emphasize this enough: Complaining is contagious. Even though I’m an eternal optimist, even I find myself complaining about the world when I get around these people, so I avoid them like the plague.

Yet there’s an even more insidious type of excuse that is all-too-common, especially online.

Why they don’t do it #2: “That’s too simple”

This excuse is common around programmers, kooky Ron-Paul/real-estate/gold fans, and reddit users. “Oh Ramit,” they chide, “long-term indexing doesn’t work! You’re just telling losers to stay losers by trying to “match” the market. You need to invest in [insert crazy investing strategy here, including “only alternative energy stocks” or “only bonds” or “opportunistic stock purchasing with alternative strategies including hedge funds and private equity”].

For many people, especially those who deal with highly technical information in their day jobs, something must be difficult to be useful. Yet as a professor in the much-maligned communications department at Stanford told me, “The value of this material is not in the difficulty, but in the usefulness.”

There are some valid reasons for this skepticism — including the fact that most personal-finance advice is terrible, boring, and trite — but to object to the overall strategy is to throw the baby out with the bathwater. Many of these people love timing the market (even though market timing doesn’t work). They love the allure of hedge funds (even though hedge funds are not as impressive as you think).

Yet they insist that the current buy-and-hold strategy doesn’t work and that saving for expenses ten years down the road is “not enough.” Unfortunately, you can’t simply be skeptical and call that a strategy. To have any credibility, you need to show me real, peer-reviewed research showing that your strategy is better than the time-tested approach of low-cost indexing. Otherwise, you’re simply another pie-in-the-sky dreamer.

Let me add one more thing: Nobody cares what you think. Or what I think. What matters is if you’ve executed on your plan. If you ask these people if they’ve invested using their “alternative” strategies, the answer is invariably this: “Oh, uh…not yet.” Try it. It’s fun to ask.

A few months ago, I wrote how I intentionally bulked up by strategically gaining 25lbs in one year using psychological techniques including commitment and attribution theory.

I picked one person to help me: my co-worker, Brian. No, he isn’t a huge bodybuilder. And no, he doesn’t read Men’s Health every day or bring a giant jar of creatine to work every day. But out of all the people who offered advice, Brian is the only person I know who consistently goes to the gym almost every single day. I’d rather learn from the person who is boringly disciplined rather than someone who has sexy ideas.

I didn’t pick the person who had the fanciest weight-training strategy. I picked the guy who went to the gym every day.

Here’s another example from Ian Rogers:

I told Kid Rock I was doing the Cool J workout and he laughed, “You are the worst spokesman for his book! Just what he needs, a skinny white kid telling people, ‘hey look at me, I did the Cool J workout!’ That’s like me wearing Russel Simmons clothes!” Probably true. But I’m also probably one of the only people on earth who did everything the book told me to for six months. I completed the LL Cool J Platinum Workout 100%. In its entirety. End-to-end. Anyone else? Anyone?

Exactly. It’s not about the difficulty, but the fact that you need to get it done. So if this seems too simple and you dismiss it, good! The ease of it is a barrier that’s caused you to select yourself out of it. The rest of us will get it done and scoff at you 10 years from now.

When you pick advice to follow, think carefully about how practical it is and how readily you can implement it. You know all these investment sites and blogs? How many of their readers have actually implemented the advice? How many of you have?

The point is action, not ideas. If your neighborhood skeptic hasn’t taken measurable action and isn’t willing to show you what exactly he’s done with his own money, politely smile and calmly walk quickly. And then handle your own finances while he exists in Kooky Kook land.

The survey responses above are all iwillteach readers, which means they’re (1) nerdy and (2) far ahead of most people in their finances. But even they wish they’d saved more money. You can always save more. When you get down to the nitty-gritty, you notice the differences in what they wish they’d saved for, and in how you approach it (savings account, CD laddering, investing, etc). But if you simply save for the big things in your next 10 years, you will be ahead of the game by far.

Yet most people constantly look for the fanciest next thing…instead of focusing on tried-and-true techniques. If you’d done this 10 years ago, you would quantitatively be ahead AND you’d feel great. But you can always start today.

What are you going to do today?

If you’re not earning more than you spend, automating your money, and maxing out your accounts, that can be your first goal. This is the majority of iwillteachyoutoberich readers.

If you’ve done all that and are looking for the next step, implement the 10-Year Savings Strategy using sub-accounts.

One more thing: You can’t just scoff at this for being too easy and do nothing. You have to consciously choose:

  1. I’m going to do this within the week
  2. I’m not going to do this because I’m going to do another strategy within the week
  3. I’m not at this stage yet…I’m going to pick up your book (or another book, or just do it) and get there

Note: There is no #4 (“I’m not going to do this at all…I’m just going to do nothing”) because that is a cop-out for losers. Get it done.

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85 Comments on "The 10 Year Savings Strategy: Saving money after you’ve already handled the basics"

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Snowballer
Snowballer
7 years 1 month ago

Hey now, I campaigned for Ron Paul but don’t invest in gold and thing long term buy and hold indexing is the best thing I’ve seen to do. Even the gold heavy Harry Browne Permanent Portfolio relies on an index fund to work effectively!

But kidding aside great point that your personal politics just do not matter, and great overall idea. A monster post and lots of food for thought!

x
x
7 years 1 month ago
1. Yes, you WILL have a nice and very expensive wedding (even if you’re a hypocrite and think you’ll have a “small, beautiful” wedding) No. I simply wont get married. 2. Yes, you WILL have kids and want to buy them nice stuff Wrong again. Repeating it in capital letters does not prove your point. It makes you annoying. Thinking outside the box does not make you a hypocrite. On the contrary… Here is what CAN happen as you get older: 1. You will be earning more money from your primary job. 2. Your passive income will be increasing. 3.… Read more »
shannon
shannon
7 years 1 month ago

Yes, x, you could avoid marriage and children, but you’re an exception if you do. Most people do eventually get married, and a lot of people have kids. I’m sure Ramit could write a 100 page post giving advice to every type of person (“I plan to get married and have kids!”; “I’m never getting married!”; “I’m getting married but not having kids!”, etc) and you’d still find a way to say “But Ramit, you didn’t cover MY EXACT situation! This advice sucks!”

Raymond
Raymond
7 years 1 month ago
Ramit, I love the blog but I have to say I was quite disappointed in the 10 year saving strategy. Here’s why. 1. Yes, you WILL have a nice and very expensive wedding (even if you’re a hypocrite and think you’ll have a “small, beautiful” wedding) First of all, I’m not getting married. No, this isn’t just the talk of someone who can’t see far enough into the future. We all know the only benefit of getting married is in avoiding divorce. If you get divorced, you’re screwed. For anyone who would ever put themselves into that situation, I have… Read more »
Karen
Karen
7 years 1 month ago

I love what you said about complainers. I try to tell my friends that all the time when they complain about every little thing. Just refusing to put those little things into words makes you a much happier person.

I also think refusing to get married because of the fear of divorce is a bit extreme. Yes, the statistics are pretty alarming, but there are some risks that are worth taking. Money unfortunately is not the best companion and can’t love you back.

Jason
Jason
7 years 1 month ago

@ X

Hope for the best. Plan for the worst. I’m with Ramit on this one…

Obviously this article is not written for 100% of the population. He’s trying to hit his reading audience and I’d be willing to bet it’s predominantly people who are married or have some interest in marriage and kids.

Do you think he can’t see past the rat race? Have you not ready any other post?? Reading comprehension?

Elizabeth
Elizabeth
7 years 1 month ago
I love the nay-sayers about marriage who talk about divorce as a reason not to get married even though they don’t know jack about marriage or divorce. Lovely. I’ll give you some background. I have a degree in psychology. I specialized in marriage and the family because I work in family court as, essentially, an entrance counselor. Just like when you get a student loan and you have to do that entrance “counseling”, which is to stay filling out a form about repayment and knowing the risks of borrowing, when you get a judgment in family court in my state,… Read more »
Nik
Nik
7 years 1 month ago

To me, one of the big takeaways from this article is that you should start saving for major expenses that you know you will encounter in 5-10 years — even if you can’t anticipate them in your current situation. Peoples values change over time and we are influenced by things like wanting to conform to peer norms. If you think you are exempt from this, good for you, but realistically even the people in their 20’s who say “I will never have kids/get married!” will probably get married and have kids. I have met people like this.

Raymond
Raymond
7 years 1 month ago
@Elizabeth “So now, they’re sitting in my office, looking at paying $120 a week to a woman they don’t even speak to any more, who moved 2,000 miles away.” If you have a kid (on purpose or accidentally) you have a responsibility to take care of it. If you got married and got a divorce you’d be paying child support as well. So your point is? “you sent her one too many cell phone texts after she cheated on you, which constitutes harassment under the state’s DV statute” Haha. Thanks for proving my point. I’m sure this individual who would… Read more »
Richard Chansa
Richard Chansa
7 years 1 month ago

Congratulations. We become what we Put In. Africans lack such Knwledge in Thinking Creatively about the Future. Listen, The Idea has just come now iam e-mailing. “I NEED TO TELL YOUR KNOWLEDGE TO AFRICAN YOUNG YOUTH / ADULTS”. Ten years from now African Economy would change – Guys iam Serouse. Very few have access to Internet Technology in Africa or We told know. It’s very sad.
Regards.

Richard Chansa.

Jim C
Jim C
7 years 1 month ago
Ramit, I am in the process of getting married and am happy I have saved for it like you have suggested. I have a few friends who have done the same. One thing to note, is that no matter how much you save, it becomes a lower bar on what you are willing to spend. Knowing that you saved $20,000 for a wedding, you end up spending $24,000. Going that extra 10% – 20% over appears inevitable. Psycologically that money you saved wears away at your ability to keep costs down as you say to yourself “That’s ok, I budgeted… Read more »
Battra92
Battra92
7 years 1 month ago
You claim the point is moot but the “president” (emperor) is a moron and a statist, though. Taxes are also going up. Here in MA we’ve seen a 25% increase in sales tax and that means a reduction in how much I can purchase. That is all making a significant change in my spending and savings habits. Sure I’m still saving but to claim that politics has zero effect isn’t true. It shouldn’t stop us from saving. If anything the buffoon in the white house should be reason more than ever to save our money because things aren’t getting any… Read more »
jon
jon
7 years 1 month ago

33k for downpayment…….FAIL

Jenna
Jenna
7 years 1 month ago
Ramit – I really appreciate how your advice has really helped me, being in my 20s with no kids, ability to move to lower-cost apartment, etc, streamline and take control of my finances. I just started a 401(k) at my work and am steadily moving forward to save in that and significantly reduce my credit card debt. One suggestion, though – sometimes I think either you really DON’T know what it’s like to be older than a 20-something with kids (especially a woman), OR you don’t put the disclaimer that your advice is more targeted for younger folks without families… Read more »
jon
jon
7 years 1 month ago

Ramit, I’m not sure why you picked that comment to get snarky about in your reply. The man says he didn’t spend a fortune on his wedding and enjoyed it , meaning it can be done and the memories were great. Why would you bash his personal finances………….

Monika
7 years 1 month ago

Um, looking at the diagram at the top of this page, for Automating your money: How it works, shouldn’t the 98% actually be 85%? There is a 5% investment going to three different places, leaving only 85% to go to guilt free spending. It is a typo, right? Because the 95% doesn’t make sense to me otherwise…

Kristen@TheFrugalGirl
7 years 1 month ago
I’m confused as to why you are so confident that everyone will spend gobs of money on their weddings. Plenty of people have simple weddings. My wedding, including EVERYTHING (dress, tux, food, etc) was $5K. and I know a lot of people manage to do it more cheaply than that. By all means, save for future expenses…that’s very wise. But don’t assume that you will need to fork over $20K for a wedding and that you have to buy your children designer clothes and take them to Disney. My husband I have been married for 12 years, have four kids,… Read more »
Frugal Bon Vivant
7 years 1 month ago

I’m approaching 30, and I just got back from a year of traveling around the world, and yep, the next massive purchase for me will be a house!

I think this is along the regular progression of getting older though… Although the opportunities to travel in your 20s is becoming much more of a possibility for “regular” people, than it was 10-20 years ago.

Tyler Karaszewski
7 years 1 month ago
You’re pointing out the obvious. You say you’re targeting young people with above-average incomes who have their shit together already. Then you tell them they’re going to want to save for a house and for retirement. They already know this — they have their shit together. I’m a young person (28), recently married (for *cheap* despite you thinking that’s impossible), making a good salary, and realizing that this is patently obvious to me. Also, I got a link to this article from J.D. Roth’s twitter. Last time I looked, he’s 40 and doesn’t have kids. That’s impossible, too, apparently. But… Read more »
Chris
Chris
7 years 1 month ago
Ramit, So what exactly is your advice here? Since this article is predicated on the belief that the reader is already “saving and automating”, what advice are you proffering? You seem to imply that if someone in this situation is unhappy with their personal finances, it is simply because they aren’t working 2 jobs. Instead, I offer this fact: these self-same people that you ostensibly speak for – that is, those who are doing everything right already – have every right to complain about taxes and bailouts and whatever else they see as unjust; they are doing what they should… Read more »
Jonathan
Jonathan
7 years 1 month ago
I think you have to consider the demographics as well. I believe Ramit lives in an expensive city so I understand where he gets his numbers. You just have to adjust his guidance towards towards the expense commensurate for your area. I live in Houston, Texas and a cousin just had a “lavish” wedding for under 15K. I’m in my early twenties and several of my friends have gotten married for well under 10k. The point is to save X amount each month so that you won’t be hit with the burden of paying off your wedding for years to… Read more »
Shiva
Shiva
7 years 1 month ago

Can’t view the charts. The iPaper and other embeds are timing out 🙁

Morgan in Seattle
Morgan in Seattle
7 years 1 month ago
In regards to Elizabeth’s comment, “the only way to be able to not save up for Kids and Wedding/Girlfriend/Wife is to be a hermit and avoid intimate relationships all together.” I am a 40-year-old woman who read Sethi’s book because it was recommended by Tim Ferris, the author of The Four Hour Workweek, and has excellent advice on automating personal finances. So I am older than Sethi’s target audience. Being older, I have experienced 3 marriages and divorces (I gave the first husband a second chance and remarried him). Marriage by no means guarantees intimacy or happiness. It is not… Read more »
Jenna
Jenna
7 years 1 month ago
Ramit – here’s the thing. You say you’re offering advice to a target demographic, and then you mock people who are clearly outside that target demographic and are having less success with your advice. You call them “complainers.” Really – they’re not you’re target market and your advice is less relevant to their lives. I think you mentioned that you did this webinar for 600 people through a news service. Did you tell them that your advice is primarily for 20-somethings? Did you say that your advice won’t be ideal for many of them, and recommend some other sources? Because… Read more »
mike
mike
7 years 1 month ago
Good post – I wanted to make a couple of points – 1. As far as weddings, of course there is a statistical distribution in the amount of money people spend on their weddings. However, the bulk of the people on a given distribution (+/- 1 standard deviation from average) are likely in the 20k catagory. I think the point is that you should plan for the worst and hope for the best. In this case, plan for 25k, hope you can get away with 10k then put that 15k towards a house down payment. 2. House – My wife… Read more »
Ian Ultra
Ian Ultra
7 years 1 month ago

The best post I’ve read on your blog Ramit. Please continue writing thought-provoking insight backed up by real data.

Susan
Susan
7 years 1 month ago
Well, I don’t think that “complainers” means the same as “people who are outside the target demographic.” It means people who make excuses for not doing anything about their financial situation. Ramit sometimes puts things strongly, or even exaggerates, but so what? He’s trying to get your attention so you do something about your savings. I’m not in the target demographic by any stretch of the imagination, having gotten married with a justice of the peace ($15 tip), never bought a house and don’t want one, etc. When I was in my 20’s, few people had heard of money market… Read more »
Moneymonk
7 years 1 month ago

““I’m too exhausted after work and kids to get a part-time job” (That’s your choice, but if you make no changes to your work situation, why do you expect your finances to change?) ”

ohhhh, love that response!

I’m in my 30s, have a home, kid, marriage, car, savings, investments

What is the next “next” step?

I’m looking into Angel Investing- maybe you can talk more about that in future posts, such as, how to get started. Thanks

Marty Fried
Marty Fried
7 years 1 month ago
There is one issue I have with your survey – shouldn’t people be saving for a car, rather than a down payment in a car? It seems like if you borrow money to buy a disposable item, you’re already losing the race. Wouldn’t it be better to buy a car you can afford? Also, I’m not sure why some of you seem so proud that you’re “smart enough” not to get married and have children. While it’s a good thing that those who are not suited for it don’t do it, it seems pretty obvious that if all or even… Read more »
liv
liv
7 years 1 month ago

yay, good post!

omg, the commenters yelling about “NO YOU’RE WRONG I WON’T GET MARRIED OR HAVE CHILDREN”…uh, good for you? most of us will. just cause you won’t doesn’t make you any better or worse and just because some of us will doesn’t make us any better or worse. either way, you should just save. make a substitution…children = trip around the world, or marriage = that awesome car i want….chill out about it.

anyways, i need to get on these tips, thanks for them!

JimE
JimE
7 years 1 month ago
I like the idea of the 10 year and beyond concept. Ramit knows that even though he’s targeting 20-30 now, as he gets older his own priorities and interests are going to change his target audience. I was wondering when he was going to venture from personal to family financial issues. Especially when it comes to home businesses, its much much easier to start a business when you’re the only one on the hook, but to take the family down that road involves either a seriously prepared family or an idiot. Looking forward to the evolution in the writing, the… Read more »
Bon
Bon
7 years 1 month ago
Fantastic Post Ramit — I look forward to more polls I know this (clearly, based on the dead horses above) is not your target audience, but I would have loved to see how people feel as ages go even higher. Will 50 year-olds be more concerned about kids or will retirement still be a big issue — what 70 & 80 year-olds worrying about retirement, health care, charity, legacy? I guess I feel like up to the age of 40 most people are still very much in the rat race a bit and the older perspective might bring some more… Read more »
Tyler F
Tyler F
7 years 1 month ago
Wow, lots of hate in these comments. Ramit, I really liked this. The take-away was still the same despite that I don’t intend to have children (and neither does my g/f). Plan for large expenses I will encounter on my path in life, whether or not it’s children or lots of travel or whatever hobby I choose. The action is not, “save for children.” The action is: ask and try to predict what your major expenses will be in 10 years and save for it. Don’t think you’re going to be above average and beat the system. Reality is sometimes… Read more »
Cath
7 years 1 month ago

This is probably the best post I’ve read on this site, and I’ve been reading for 2 1/2 years.

You’re cool.

Jenna
Jenna
7 years 1 month ago
Ramit – I read the initial “What people wished they saved for…” deal when you emailed it out yesterday and I’ve just reread it. I’m in my mid-20s, and this post really changed my mind about how much money I want to save vs. spend. I thought back to working summers in high school and my part-time job in college. What did I spend that on? Do I have any of the goods I bought with that money, or do I wish I had spent it differently? In most cases – I do wish I had either saved that money… Read more »
Anca
7 years 1 month ago
I understand you can’t tailor your advice to include the handful of people who deviate from the societal norm and that you want to wake up the fraction of those people who are fooling themselves and will end up smack dab in the bell curve. But saying there are no exceptions whatsoever is clearly alienating those people, not convincing them they aren’t the exception afterall. No, Ramit, I won’t have kids, because I got my tubes tied at 24. And I think weddings are a waste of time and money, especially engagement rings and wedding dresses. If I ever get… Read more »
Will Johnson
7 years 1 month ago

I really appreciate the sharing of your data! Once I pay off my student debts (5 years or less I think) I know my next savings goal! Saving up for a house. Thanks for this survey and the insights.

Kevin M
Kevin M
7 years 1 month ago

Ramit – you seem to be one of the biggest complainers in these comments. Nearly every time someone disagrees with you, you change the subject and bash them anyway.

And I agree with Tyler – the blatant book pimping is getting obnoxious.

Also, your flowchart either has some poor path or is not designed well. How can 100% – 5% to 401(k) – 5% to Roth – 5% to savings = 95% left to pay credit card and other bills?

AD
AD
7 years 1 month ago
I would have had an inexpensive wedding (think sunny, sunny Mexico), until I married a man with a very big, very close-knit family. Sure, I could have insisted on having things my way, but to me, family is more important than money, so we got married here and there were almost 200 guests (150 were his family, and it was only family as immediate as aunts, uncles, and first cousins). I didn’t save because I always assumed I’d have a very small wedding. I think Ramit’s advice is great because although my dream wedding consisted of 25 people and a… Read more »
Ryan
7 years 1 month ago

This post was a lot like that Simpsons episode where the town thinks they found a skeleton of an angel at an archeological dig and at the end they find out that it’s just promotion for someone’s new outdoor mall.

Still, fantastic data and analysis.

Sara
Sara
7 years 1 month ago
Good lord. Ramit is using hyperbole (THERE ARE NO EXCEPTIONS!!!!!!!!!) to make a point — you MIGHT be an exception, but you are PROBABLY not. You probably ARE going to get married, spend more on a wedding than you’re planning to, buy a house, and have kids. To pretend you know exactly what you want now (at say, 25) for when you are 50 is the equivalent of adamantly stating when you are 5 that you hate all boys/girls and will never like them. It’s utterly ridiculous. All you can do is acknowledge that your current self cannot predict everything… Read more »
Kuhle Kitchen
7 years 1 month ago
The general idea behind this post can be summed up in four words: save for the unexpected. For those saying you’ll never get married; fine, don’t get married. Save for a second house instead. For those saying you’ll never have children; fine, don’t have children. Save for a luxury car instead. This post is not about getting married, it’s not about having children, it’s not about paying for your sick nephews cancer treatment… it’s about being financially prepared for ANYTHING. Life happens, and it’s expensive! Prepare before life happens, it will be much cheaper financially and emotionally. Stress is expensive!
Marisa
Marisa
7 years 1 month ago
Ramit, have you been talking to my mother? She keeps telling me I’ll change my mind and have kids, but she’s been quieter and quieter on that topic as I get further into my thirties… I think there are better ways to tell people that they should expect to have a savings cushion for things they haven’t thought about than to insist that they’re wrong about major life decisions. (FWIW, ten years ago my husband and I planned to have a “small, beautiful” (and cheap) wedding, and we did. We had a budget, and we came in under it. We’re… Read more »
imelda
imelda
7 years 1 month ago
There’s one thing I’m surprised nobody’s mentioned. Ramit, how can we possibly save for these things? Say you expect to get married, have kids, buy a car and house, and also would like to take vacations. You’re supposed to save $6376 per month? That’s 2.5 times what I make in a month. I don’t think it’s reasonable to tell me that I should just increase my income until I get there. This is something that has been frustrating me. I read lots of PF books and blogs, I budget carefully, pay my CC bill before the end of the month,… Read more »
kevin
kevin
7 years 1 month ago

awesome article, ramit. it’s the same stuff you’ve been saying all along, yet it’s still refreshing.. and the consistency keeps me a loyal reader 🙂

ec213
ec213
7 years 1 month ago
@TK: Thank you!! for saying what I’ve been thinking as I’ve been scrolling through these comments… It seems to me Ramit’s just trying to fight against a tendency ALL of us have: the desire to think we’re absolutely unique, and that therefore averages, common problems, and therefore common _solutions_ don’t apply to us. It’s like those studies that routinely find that about 70 percent of us consider ourselves “above-average” drivers. Most of us were told in kindergarten that we were unique and special like snowflakes, and at some level we’ve never completely gotten over it–so of _course_ we tell ourselves… Read more »
Nikc
7 years 1 month ago

Ramit, Just give em what they want man. I look forward to your next post:

“The Ten Year Savings Plan: Snip Your Balls and Refuse True Love”

In all seriousness the survey results we’re f’n great.

JB
JB
7 years 1 month ago
I found the survey results fascinating and enjoyed the post as well. Looking forward to stepping up my personal savings plan. I am an anxious person by nature and gravitate towards worrying. I found that once I started saving for unexpected bills, my next car, and house down payment, etc I’ve worried about money much less and feel better overall about my finances. That alone has been worth it. Oh and out of all the weddings I’ve been to in my life (at least 20) only one was small and ‘frugal’. Seems like there’s a lot of anomalies in the… Read more »
Sean
Sean
7 years 1 month ago
I find if very sad the people who say “I’m not getting married or having kids because I’m protecting my assets.” If you don’t want to get married fine, but that is not the right reason. Get a clue, you may be “rich” but life will be empty, and none of your “riches” go with you. No one on their deathbed has said I wish I had more money. My wife stays home with our kids, when she could be making $80,000 plus a year, and I wouldn’t have it any other way. Does that mean everyone has to do… Read more »
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Gen Y Investor
7 years 1 month ago

Great post Ramit… the main theme of the post can be summed up as envision your future and what you want it to be like, then plan accordingly to make it happen. Simple, yet powerful. Don’t listen to the complainers out there… it seems like there are a lot of self-centered people around that need to grow up a little.

-Gen Y Investor

EZ Money Tips
7 years 1 month ago

Thanks for the awesome tips!! It always helps to have tons of great info.

rohit
7 years 1 month ago
Most of the trolls commenting on this post are pretty annoying. These commenters remind me of my classmates in medical school always trying to outsmart the other students by raising their hand to contribute some obscure medical fact to a lecture. These students do this because they think they will get some “respect” from their peers. Really its not “respect” they get from their peers, but a please “shut the f*** up and let the professors and medical professionals teach us”. All of these trolls on this blog are trying to make themselves feel better by acting like they are… Read more »
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7 years 1 month ago

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JT
JT
7 years 1 month ago

I liked this post. I would like to see more posts on the next step after mastering the basics theme.

To all the posters who are commenting that the advice is useless because you won’t get married or have kids, you can’t expect to be spoon fed perfectly personalized advice all the time. Good lord, just read the post and then use your own brain to apply it to your life. Like, if you want to save for early retirement instead, substitute that for wedding + kids. Jeez, its really not that complicated…

Josh
Josh
7 years 1 month ago

Ramit, a very generous post for you to put in the effort and insight to collecting this data.

It really makes your conclusion much more powerful.

As an aside, it seems to me there must be a much more progressive method of promoting comment and debate than on current blogs’ systems, why do they get dragged down by minutiae and nitpicking?

Doctor S
7 years 1 month ago

I used to be a habitual complainer. “Waa I never have enough money… b/c I always have to pay back studnet loans.” I def kicked myself in the ass and made a change and started earning more through secondary income sources. It definitely changes the game and changes the way you do things. I am about to get married next year. My financee is an only child and her parents have been waiting for this day, so they are doing it big!

nn
nn
7 years 1 month ago

Cool…

really insightful post! I think when we alwys talk abt investing and investing…. its very important to emphasiz on saving too!:)

http://www.myfinancemyway.blogspot.com

Eugene Krabs
Eugene Krabs
7 years 1 month ago

This. This is a very good post. Bravo!

Save now. Invest now. Start your business and chase your dreams. Now. Don’t wait until tomorrow when you wish you did that yesterday, or 10 years from now when you wish you did it 10 years ago.

Do it now.

I believe that is the message, and I like it!

Alex
Alex
7 years 1 month ago

How am I supposed to save $6000 a month, when I make a quarter of that?

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[…] 9, 2009 by wellheeled A couple days ago, Ramit blogged about 10-year saving strategy to “leave your friends in the dust” after you’ve already handled the basics of […]

Wellheeled
7 years 1 month ago

Planning for the future is important, no doubt, but I have to say this method doesn’t really motivate me. I guess it just cuts everything into too finely a piece. I’d rather save for my situation now (i.e. retirement), so that I have more financial flexibility later when these things (weddings, kids) come up.

But if this will motivate people to save, then more power to them!

Love the diapers as an example.. but I just can’t quite work up the same motivation saving for smelly diapers as I do for my golden years. 😉

http://wellheeled.wordpress.com/2009/07/09/why-im-not-saving-for-my-childs-diapers/

jj
jj
7 years 1 month ago
First, I love your tone and style of writing. It’s refreshing and so different from other PF bloggers. I may not always agree but I do in this case. I’m 38 and when I was in my 20s, I thought I would not have kids. Of course, now I do want kids. As for weddings, many of my artsy, ‘alternative’ friends said they would elope, but they all ended up having a wedding! Even my artsy rebel sister held a big wedding banquet AFTER eloping. I actually did elope and skipped the whoel thing, but I am the ONLY one… Read more »
SP
SP
7 years 1 month ago
Since most of us can’t max out our retirement accounts and save for each of these things all at once… The key struggle I run into is how to balance long term (retirement) savings and mid/short term goals (car, wedding, home, vacations). I can easily figure out how much I value “X” and how much to spend on that per a month. But looking at whats left, it is abstract to figure out how much I value this “retirement” thing and how much I value saving up for a home that I suspect I may or may not want to… Read more »
Josh Rainwater
Josh Rainwater
7 years 1 month ago
I have to say Ramit… I really enjoyed this post. It’s not about some crazy awesome strategy for your specific situation, but extrapolating the advice from what you’re saying. As you say so many, many times, people get too specific and mired down in details; what really matters is simply making more money, and saving more money… period. There’s nothing wrong with either of those regardless of what situation you’re in. And for the record, I definitely like your approach to the 10-year savings plans. Most people would assume that 10 years down the road savings needs to be different… Read more »
Sarah
Sarah
7 years 1 month ago

First, I’d like to know how I can we save any money when all the jobs in this country are being outsourced to India?! Second, I do not want any children, nor do I plan to get married. If I do, I certainly don’t need (or want) a $30,000 wedding. Get a clue.

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[…] The 10 Year Savings Strategy: Saving money after you’ve already handled the basics. I like that Ramit’s approach to money and financial advice is rooted in social psychology. He points out that people never want to believe they are most likely average or like everyone else. Ramit will also appear on tomorrow’s Consumerism Commentary Podcast. […]

Andrew Parkes
7 years 1 month ago

Ramit,
This is a great post… comprehensive and I love how you incorporate the psychological element in lack of action.
It’s funny to watch when someone is disarmed of all of their lies, excuses, and stories. They either go on to prosper… or scramble to find new, more ridiculous excuses (the economy, India, not getting married, not having children.) Fascinating!
Thanks,
Andrew

Kate
Kate
7 years 1 month ago

I was really surprised by all the negative comments here (Raymond’s post honestly made me feel a little sad, but I hope he has a nice life with his money…) but I just wanted to chime in and say that I loved this post and found it really useful and thought-provoking. Keep it up! 🙂

Randy
Randy
7 years 1 month ago
Agree with those who have commented on how desires change over the years. It may come to pass that your current desire to have no kids, no spouse, no house…….. becomes a reality, but saving aggressively early will give you more options should your desires change. My wife and I look back at the year A.K. (before kids) and think about all the times we said ” our kids will never…….”, then see it come to pass. Saving is a hedge against future changes in life events or desires. “Life is what happens to you while you’re busy making other… Read more »
H Lee D
7 years 1 month ago
I like the advice but I dislike the condescension. The “YOU WILL” do this bothers me. I don’t like being told what I’m going to do, as if told by a prophet. I did get married, and we paid in cash, but not only was it not $20, we came in under budget. There is a good chance that I am sterile as a result of chemo, so the odds of having kids (though we’d like them) are low. And if you’re wise and thrifty, you can raise kids on much less than is typically done anyway, just like everything… Read more »
Natalie
Natalie
7 years 1 month ago

I’m interested in finding out what people wish they’d spent less money on looking back at their 20s/30s/40s in order to have money for the travel/wedding/kids.

In my 20s I did the Sensible Thing, moved back home and scrimped and cleared my student loans completely. Now I’m in a good financial position but looking back I really wish I’d spent more money on pretty frocks and partying.

Anyone else?

Anon
Anon
7 years 1 month ago

Obviously everyone is going to say they wish they had saved more when they were younger. Here at the present moment, it is easy to borrow money from the past self because it’s just a memory. No one takes the time to really think about the life changes it would have involved.

There’s also a correspondence between savings and perceived life expectancy

Mr. P
Mr. P
7 years 1 month ago
I am amazed at the negaitive comments here. The guy is offering advice on how to grow wealth and your dumping on him? People are missing the point of article. Yes, some of you may not get married (I didn’t) or have children (I don’t). But you will have expenses. If you save for a wedding and children (or other scenario) and don’t have any, you will still have a bundle of money that may be used for something else. A new car, roof, better home, dream vacation or maybe early retirement! Maybe you aren’t planning to get married. I’m… Read more »
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Stephen James
9 months 10 days ago
Hi Ramit, I’m well outside your target demographic, in my late forties and been through 2 marriages/divorces, got a grown up kid and still looking at working for another 20 years at least until retirement. What I can say with 100% certainty to those 20 somethings reading this (who are your target demographic) is that whatever you think your future is going to be it is certain that life will throw you some curveballs. Things rarely work out the way we planned them. But that does not mean we are totally powerless to improve our outcomes. Whatever ends up happening… Read more »
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