Save First
Richard Quinn
IT’S A TOPIC WHERE I always seem to be in the minority. The controversy: Should you save first and then spend what remains—or, instead, prepare a budget which then determines how much you can “afford” to save? Budgets are scary and stressful. Go ahead, make a budget if you like. But if you conclude that you can’t afford to save, there’s no progress in that.
A Northwestern Mutual survey found that 49% of U.S. adults say they don’t have a clear idea of how much they can afford to spend now and how much they should be saving for later. Need greater clarity? I’ll clear it up: Start by saving 15% of your gross income. “Afford to spend” is an interesting phrase.
My contention: You can afford to spend what’s left after you save a significant portion of your gross income. What you can’t afford to do is spend more than that. What if you save 15% of gross income and you can’t support your lifestyle with what’s left?
You have to look at your spending and determine what needs to change—fewer lottery tickets perhaps, a smaller car payment, dine in rather than out, leave more of the junk food on the grocery shelf. In general, what you need is a little less discretionary spending.
You’re living paycheck to paycheck, you say? So does Elton John, I hear. For all but the lowest-income Americans, that problem reflects the amount of their spending, not the size of their income.
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Source: Save First – HumbleDollar
QUINNSCOMMENTARY 
“For all but the lowest-income Americans, that problem reflects the amount of their spending, not the size of their income.”
I suppose most of these are not your regular followers, but what would you estimate is the percentage of ‘lowest-income Americans’?
“The economy might be strong in the U.S., but nearly 70 percent of Americans have less than $1,000 stashed away, according to GOBankingRates’ 2019 savings survey. The poll, released December 16, revealed 45 percent have nothing saved. The survey questioned 846 respondents November 25 to 26.
The discovery baffled Bruce McClary, the spokesman for the National Foundation for Credit Counseling. “It’s puzzling to me that if the economy is doing so well and that we’re so close to full employment, that consumer confidence is up … that we haven’t seen the numbers move much in people’s ability to save,” McClary told Yahoo Finance. “I find it very troubling that people can’t come up with $1,000 in a savings account to cover expenses without borrowing money.”
https://www.statista.com/chart/20323/americans-lack-savings/
Most of these have negative savings… Consumer debt.
Making savings first is a non-starter when deciding which bills* you can maybe skip this month to get by.
*Or food, medications.
“I find it very troubling…” also. But not baffling.
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