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How do you squeeze saving that much?
Are you including bonus in your monthly average? Assuming NYC your take-home would be under $3k/month, do you not eat? That seems like a very unachievable savings rate with such high rent
No. Take home pay after tax and 401k, is $5.6k per month. Then after rent and saving, live on about $850
401K does not average to 5K a month lol considering the max
Sorry I was thinking $3k per paycheck, but wrote per month
$850 is living pretty damn frugally for NYC. I'm guessing you have a limited dinner/food bill and limited social life due to IB.
You are saving way more than most...
Man – NYC just seems so expensive. At the end of my first year in a non-NYC / SF city I had 40-45k saved off my base alone and most of my peers were in my shoes.
Is this Houston? Between LCOL and no state tax, it's not even comparable how much more you save (although I'd argue NY salaries are higher in the long term)
In IB, salaries aren’t different across locations. Agree with outside of IB but would argue it’s not close to matching the CoL differences
Live at home so putting 2k aside (50/50 cash savings/brokerage) + 10% of my income in my 401k inclusive of match.
Wish I could live at home. A couple friends in the bay commute into SF from their parents’ place and save almost all of their income. Huge leg up for saving. Definitely a big motivator for me to own in a major city so my kid isn’t forced to rent.
Yeah I won’t lie that I feel extremely lucky to be able to do this
Live at home as well. Put away 4K per month before I allocate to spending on necessities and anything left over is discretionary.
Living in NYC, save $500 per month and max 401k with bonus (less one big purchase). I travel a decent amount (particularly ski season), go out to dinner about once a week in addition to hitting bars, etc. Averaged just under $6.5k per month in expenses for 2023.
Could I be saving more? Probably. Is NYC dumb expensive? Yes. Do I want to live somewhere cheaper? Hell no.
Personally, I’m comfortable with my saving rate given most other professions you wouldn’t even get close to maxing out a 401k (at least in NYC). Yes, savings are important but that has to be balanced with living a happy life (especially in your early to mid-20s). Plus, if your goal is to stay within finance, you generally have decent visibility into future earning potential. So, if you keep lifestyle creep in check, you’ll be able to bank significantly more as you advance in your career (for a lucky few you might not even end up relying on your 401k).
Threads like this are full of selection bias, and for anyone reading this, please do not feel bad when you are combing through. The kids who have saved the most are always going to be the most inclined to comment, and I think it meaningfully skews what people perceive as “average”. Most analysts do not live with their parents, and most also live in a HCOL city (NYC/LA/SF/CHI).
For example, I am an associate now, but in my analyst years in NYC, I did not save much aside from my bonus, and pretty much all my friends / roommates who worked in banking were in the same boat. Maybe I saved around $30k-$40k or something with 401k and bonus at the end of every year. Not a whole lot. Student loans, food, rent, and weekend entertainment drain your paychecks pretty quick and there is not much left over - maybe a few thousand at the end of the year if you are lucky. In my opinion, this is completely fine and one of the best things about finance is that pay scales considerably and anything saved in your analyst years will pale in comparison to earnings when you are more senior. You will never be able to get your early-mid 20’s back, so enjoy them.
There also seems to be a huge obsession on here with achieving a net worth of X at Y age, but the reality is, if you are relatively smart with your money and and also do not forego spending some cash every now and then, you will probably enjoy much better career longevity versus if you were to solely focus on saving.
Exactly why I commented my $500/month above. Seeing the comments about $2k+ is just completely unrealistic if you have any semblance of a life in a HCOL.
I have my entire life to live in a slower paced cheaper city, but in my 20s I’m gonna live it up in a city I love and still bank more than the average American.
I've been putting 15% into my 401k (~$19k) + company match. Then I'm saving about $500 per month on top of that (~$6k annually). My first bonus I spent entirely on paying off my student loans. My second bonus will predominately go towards a future down payment + some fun things (small trip, nice dinner, etc.). Hoping the after-tax + fun things amount is $25k+.
Fortunate to no longer have student loans, about $45k in retirement accounts, 6-months of emergency savings, and then ~$15k of liquidity. I'm hoping to leave the industry in a year or so and hope this provides a nice saving foundation.
When I was first-year analyst back in 2019, I would try to save $1,000/month outside of my 401k. Sometimes I didn't hit that, but no big deal because there was a nice bonus at the end of the year. Probably not a bad target to aim for.
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