How you move forward in your life, probably your aspirations and goals will change and what you do now, maybe in few years you won’t like it anymore. It doesn’t matter in what stage of life you are now, there is no better moment to start saving money than now. How much money should I have saved by 25 is a hard question to answer but I will try to do my best to make you a clear image of how the things stands. If you are the one of those people who wait for the perfect moment to start saving money you make a big mistake because it will never be the perfect time for that.
If you are thinking to start saving money you can start with 10% of each paycheck, when you get a raise or winter holiday’s bonuses you can increase the percentage.
There is no exact rule that says how much money you should have until now but using your age we will estimate how much money you should save for different events that can occur in your life, we will create a range for the following types of events:
- Emergencies (here is any emergency that stay out of your control, like natural disaster)
- A comfortable retirement
- Pursuing your dreams (travel around the world, a new car or house etc)
When we think about emergencies savings we have to take in account that we need at least 3 to 6 months worth of expenses.
|Age||Ideal savings balance|
|30||$14,000 to 29,000|
|40||$18,000 to $36,000|
|50||$19,000 to $38,000|
|60||$17,000 to $33,000|
|70||$14,000 to $28,000|
|80||$11,000 to $22,000|
The above numbers are are based on national averages from U.S. Bureau of Labor Statistics and may not resonate with your lifestyle, because as you know everyone’s situation is different. Another important thing you have to take in account is where you keep your money, because in case of a natural disaster you need to get the money very fast, most CDs have a specific date when the money can be withdrawn, if you want to withdraw the money before that date probably you will have to pay a penalty tax.
Next we will talk about the savings you should have for your retirement. Maybe the most important rule here is to have one times your income saved by age of 30, twice your income by age of 35, three times by 40, fourth times by 45, fifth times by 50 and so on. Your main goal here is to save at least 15% of your salary for retirement, anyway you don’t need to start with 15%, at the beginning you can start with a lower percentage and increase it by 1% every year until you get to 15%.
Ideal saving for retirerment by age:
|Age||You should have saved||Which means|
|30||1x your income||$62,000|
|40||3x your income||$186,000|
|50||5x your income||$310,000|
|60||7x your income||$435,000|
|70||9x your income||$560,000|
|80||11x your income||$685,000|
These numbers are examples based on estimated household earning, your saving for your own retirement can vary based on the following things:
- Your annual income
- The age when you plan to retire
- The lifestyle you want to have in retirement
Savings for your goals and your dreams
|Saving for||Plan to save|
|A car||$22,000 to $58,000|
|Down payment for a home||$16,000 to $65,000|
|College for your kids||$35,000 to $205,000|
The above amounts can differ in your own case, our amounts are based on averages, all amounts can change depending on the circumstances.
I hope you enjoyed this article and found it useful, also if you want to start your journey in making money online check this article.