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How much should you have saved by 30?

K

Kendo

macrumors 68020
Original poster
Apr 4, 2011
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Obviously the answer is going to be drastically different for millionaires but this is targeted to those in the middle class (not rich but not living paycheck to paycheck).

Assuming that you have no debt by age 30 (school loans paid off), how much should you have saved up before taking on a mortgage or just in your savings in general?
 
There's no way to give a definitive answer to that question as everyone is in a different situation. A few of the factors that need to be considered are:
  • Annual Income
  • Buying Location
  • Dependants (children)
  • Current Expenditure
  • Interest Rates
 
BreakGuy said:
There's no way to give a definitive answer to that question as everyone is in a different situation. A few of the factors that need to be considered are:
  • Annual Income
  • Buying Location
  • Dependants (children)
  • Current Expenditure
  • Interest Rates
Click to expand...

How about single, no children, does not yet own a home and annual income $50,000 to $75,000 (is that considered middle class?).
 
In savings like a savings account or all savings (like 401k, IRA, etc?) I'd say Minimum $50k and closer to $100k ideally.
 
Get rich slowly balanced money formula:

50% needs
30% wants
20% savings

Simple, easy to follow, hassle free retirement.
 
The percentage depends too much on income.

Personally, I believe that if you're single, have no children, and don't own a home, you should easily save 25% of your take-home pay, 30% with moderate discipline, and 35% if you're serious saving, and are willing to live "only" comfortably. Remember, "Cost of Living" and "Cost of Lifestyle" are different things. ;)

I save around 28% of my take-home pay. Actually, I save around 35%, but I actually still owe money (but it's just to my parents, and they're in no rush to get that money back), and am pay them back around $4k to $6k per year.


I don't know how much you SHOULD have in the bank before 30 years of age. I only graduated (with a PhD) and got my 1st proper job at age 29, I don't have $50,000 in savings, and I think I'll do just fine. ;)
 
Kendo said:
Assuming that you have no debt by age 30 (school loans paid off), how much should you have saved up before taking on a mortgage or just in your savings in general?
Click to expand...

Before taking on a mortgage? Enough to put up 20% on a house, plus money to pay for moving costs and buy the initial furniture, tools, etc, that you need, plus at least 6 months of living expenses to keep in savings for emergencies, rainy day, etc. IMO, of course.
 
Depending on your income, and when you start saving... I say a years salary is a safe bet.

If you make $50k a year and start saving at age 22 when you graduate from school, that's only $240 a paycheck or roughly 10%. That percent will remain a constant too, regardless of your salary.

Now that's just straight savings. I'm not talking about money for a house, or specific government and/or work related retirement plans.
 
There is no set amount someone should have saved at this age because everyone's circumstances are different. Percentage targets are useless because they don't take into account the fact that there are fixed costs of living and that has to be paid regardless.

By the age of 30 I had completed many (8!) years at university and had completed my first 'real' job and had nothing saved whatsoever - just paying off student debt. I also had a mortgage by this point and so owed many more thousands, my income really only kept me afloat. I could afford nothing beyond the mortgage and bills. I could not afford a mac either! Life 100% savings 0%

However by not taking out anymore debt for anything at all and living sensibly and overpaying significantly on my mortgage, I now have a six figure sum saved up and also own 40% of my third home. In fact I could pay off the other 60% if I wanted! This is not too bad a position and I am not 40 yet. There is no secret to this - work & earn, pay off debt aggressively, don't take on any more debt (except mortgage), don't buy what you can't afford, and don't use friends & neighbours as a benchmark for how you ought to live (they usually can't afford it either!). I can now afford to buy macs thankfully ;-) Life 50% Toys 10% Savings 40% roughly

Essentially I think the best position to be in when 30 is to be starting lifelong finance planning - starting pension planning and saving if possible. It can feel a bit pointless at this point, but remember, 1) compound interest, 2) your salary will probably increase, 3) pay off debt aggressively, don't take out more.

good luck with saving up! And.
 
There are pretty much too many variables to consider.


If you're in a range of $50k-$75k salary, don't own a house (I'm assuming renting?), don't have really any debt: Then, I'd say right now your savings should be enough to be able to afford that house, and then some. What I mean by that is put up the down payment (The higher the better), be able to afford the mortgage and living expenses for I'd say 9 months without any income. If you can only afford 3 months, then you'd better start saving more.


But that's not really good advice, seeing as how I'm less than 2/3 of your age :p
 
It also depends whether your company has a matching option with their 401k. With a match and a salary that high, you could save a great deal. There are so many factors though, even within a savings program - how much you save, how you invest it, and the match percentage...

I'm concurring with everyone else on here that there are just too many factors that contribute to "how much you should save by 30". You're lucky that you can save at that age. Many people have issues with paying off loans and just supporting themselves.
 
Once you start working, everyone should save at least 10% of their gross pay every year for retirement. Obviously more is better, but this should be the absolute mimimum, no matter what. Power of compounding...
 
slu said:
Once you start working, everyone should save at least 10% of their gross pay every year for retirement. Obviously more is better, but this should be the absolute mimimum, no matter what. Power of compounding...
Click to expand...

There really isn't much compounding going on if it's just sitting in a standard checking or savings account. It should probably be put into a company 401k/Roth IRA.

I'm 22 and just graduated last May. Unfortunately I had almost no time to find an apartment (found a job in the city the last day my old lease was up), so I can only put away 6% + company match of 3%.

On top of that, I try to take $50-100 a paycheck and dump into an ING savings account for a rainy day fund. It's not the most, but it's something and adds up. $50 is auto withdrawn every paycheck and then I like to put more in when I can.
 
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