Hopeful Savvy Saver

I just read the article cited by MonkeyMama at

http://www.wilmingtonstar.com/apps/pbcs.dll/article?AID=/200...

The article says, according to Fidelity, the average 401(k) account balance is $62,000. This lead me to feeling like I'm on a good track, being at age 25, with about $42,000 saved for retirement.

Then I thought about that pesky net worth (http://en.wikipedia.org/wiki/Net_worth) calculation presented in the book The Millionaire Next Door.

I haven't read the book, but, know from online information that it describes under accumulators of wealth (UAW), average accumulators of wealth (AAW), and prodigious accumulators of wealth (PAW).

To determine if you are a UAW, AAW, or PAW you apply the following formula:

Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be.

If you net worth is about equal to the number you are an AAW.

Try your own with the calculator here:
http://www.retireearlyhomepage.com/millbook.html

And more info about the book here
http://www.washingtonpost.com/wp-srv/style/longterm/books/ch...

My case
Age: 25
Pretax annual salary: $76,600
Pretax annual other income: $3,000
Total pretax annual income: $79,600

Result for AAW: $199,000

With a net worth of about $33,000 I rank as a UAW.

Bummer!

It is fairly discouraging to see that I'm a UAW and to notice that my net worth isn't even close to an AAW for my income/age. So much for feeling like I'm on the right track...now I just feel a compelling need to save. I want to transform myself into at least an AAW, but it seems like there will be a long road ahead.

How does everyone else rank on the UAW, AAW and PAW scale??

I'm trying to cap my monthly food/dining out expenses at $400 per month.

With 3 days left in January I've spent $391.53 on food so far. The big expenditures this month included ordering pizza out for some friends ($39.60), dinner out last night ($23) and grocery store purchases ($277.31).

I just went grocery shopping yesterday, and minus a red potato which I'll need to go purchase, I should be adequately prepared with food through the 1st of the month. This is good news! So for the first month of 2007 I have managed to keep the food spending under $400!

Now, on to staying in control for February.

I came across savingadvice.com while perusing for good financial advice for the new year. Decided to start myself a blog to try to hold myself financially accountable in 2007.