The following is from a Kiplinger article.
Like many American families, Krista and Dave Jones, who live in Cincinnati, are using coupons at the grocery store, taking advantage of grocery store fuel points to lower the cost of gas, and driving less in general. Both Krista, 47, and Dave, 50, work from home most of the week, so it’s easier to drive less. Although they don’t go through every purchase in their bank and credit card statements, they review the trend lines in each report. That has led them to scale back on restaurant and takeout meals, and they’ve loaded up on items such as shampoo and toothpaste when they go on sale. The biggest item the Joneses eliminated this summer was their gym membership, which cost several hundred dollars a year.
The Joneses have two daughters—Madeline, 18, and Kayla, 14. Madeline will attend the University of Cincinnati this fall, and they plan to ask their auto insurer for a policy discount, as Madeline’s car will remain mostly stationary. “We’ve always been conservative in our spending, so inflation isn’t hitting us as hard,” Krista says.
Krista and Dave both contribute 15% to their employer-provided retirement plans, and they don’t plan to lower their contribution rates anytime soon. That means they’re not immune to the stock market turmoil triggered by inflation and fears of a recession, but they are willing to ride out the bear market.
Where is the recommended increase in retirement savings going to come from considering they are already cutting the fat in their budget to counteract inflation’s impact on their budget? Are they to cut down to a bare bones minimum in spending and not able to live a comfortable life before retirement? They may have more in their budget to squeeze some additional savings, but not enough info is given to make this judgement. We don’t know if they are high income earners or below median wage earners. Maybe their employers have generous matches in addition to their 15% contributions resulting in saving over 20%. It depends on all their financial facts.
The great majority of Americans have room to save. The typical household spends 18% of net income on non necessities such as tickets, pets, eating out, even caramel macchiatos 😎. Look about at all the businesses selling products and services that are luxury items – especially if you are not saving for the future. Look at shopping carts and what is purchased. Walk a few blocks in any city and count the liquor stores, nail salons and beauty salons, even fitness centers. It’s not millionaires keeping them open.
Dick Richard D Quinn Blogging at Quinnscommentary.net and HumbleDollar.com Twitter @quinnscomments
You lost me at liquor stores! All kidding aside, you can cut back by getting package goods at a liquor store instead of having drinks at a bar or restaurant and paying retail.
They are still contributing in the down market at 15% which is good. They have 2 teenagers and college costs coming up. My hat is off to them for maintaining their path.