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[quote=Anonymous]We have followed this for more than a decade

1. At the start of the year, we look at my anticipated earnings+ bonus+ RSU etc.

2. Decide what % of savings we want to save, for the last 10 years it has been atleast 30% of "gross" and now as income has gone up, between 35%-40%.

3. We save a % of "gross" income, savings for simplicity is a $ amount whether pre-tax, post tax.

4. Savings include 529, Roth, 401K, deferred comp plan, RSU vesting (whether or not we sell the stocks that year). It does not include any car funds, vacation funds, mortgage payments, company matching 401K etc.

5. So essentially, if we need to save 200K, I would plan for saving 60K each (for total of 120K) in backdoor Roth and 401K, assuming 6K company match. Perhaps 20K in 529 (set it to autodebit). Rest in brokerage when the bonus comes.

6. Free to spend whatever else we want to spend on, I don't budget, but do have anchor points in my mind

7. Monitor every month ( or atleast once in 2-3 months) to make sure we are on track, if the bonus is smaller, our target savings gets smaller, if it's a better than expected bonus then we need to set more aside.

8. Any big purchases or home renovation decisions are makde only after a back of the envelope calculation that we are on target savings this year.

9. This system works for us, but can be implimented in many flavors such as % of take home income, or including mortgage principle payments as savings, not counting college savings as it is actually an expense etc..[/quote]

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