How Much Money Should You Save Before You’re 30?
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How Much Money Should You Save Before You’re 30?

Everyone knows saving money is a good thing. The problem is, aside from learning the how,you must learn the how much. By the time you’re 30, you’ve likely already moved past the financial disasters of your college years (and, um, drunken spending sprees). You’ve held a few jobs, have some financial stability and (hopefully) you put aside some hard-earned dollars each month.

But, how do you know you’re on the right track toward a “smart” savings goal? We asked a few financial experts for their thoughts on the admittedly annoying—but important—question:

“How much money should I have saved by 30?”

The answer? It really, truly, depends on your unique situation. Giving hard numbers, we were told, is nearly impossible. At least, not without taking into account your job history, location, and any debt you might have accumulated. So, while you might hear how some people have managed to have $100K in savings (*cough* over-achievers), that’s not nearly the case for most everyone else.

If you’re truly looking for a benchmark number, you can go for a simple formula. Aim to have your annual salary’s worth in savings by the time you’re 30, Kimmie Greene, a money expert at Intuit, told CNBC. That number—however—can be an unforgiving one if you haven’t been saving religiously for years. That’s why the retirement broker T. Rowe Price suggests another formula: halve your salary and aim for that in savings by age 30. Then, increase your savings goal as you age.

Regardless of what’s in your piggy bank by the time you’re 30, it’s a good time to kick off thinking about your money habits and savings goals. So, how do you get started on your financially-savvy future?

First, the simple answer: Save ‘as much as you can’

The financial experts we tapped for this story agreed that the earlier you start saving, the better. Review your monthly budget and figure out what you must absolutely spend (a.k.a. your ‘fixed expenses;) and what’s flexible (or your ‘discretionary expenses’). “If the difference is a few hundred dollars, that should go toward savings,” Katharine Perry, CFP, and a financial consultant at Fort Pitt Capital Group, told Girlbossvia email. “Even if it is $50, and that’s all you can afford to put in savings, make the effort to put that in a savings account.”

If you want a percentage—aim for 10-20% of your income

Perry suggests saving at least 10% of your income each paycheck. Though, as a good rule of thumb, saving 20% is a solid benchmark, Michelle Waymire, founder of Young + Scrappy, told Girlbossvia email. “I personally like to see 10% of your income go towards retirement, and 10% go towards shorter term goals: an emergency fund, the down payment on a house, a fun vacation, [or other goal],” Waymire said.

Or, try the 50/30/20 budgeting rule

“The rule simply divides your take-home pay into three categories and provides a framework for how that money should then be allocated,” Jordan Sowhangar, CFP, and wealth advisor at Univest Investments, Inc., told Girlboss via email. Under this framework, half of your money goes toward your “needs.” Think: rent, utilities, insurance—anything you have topay. “The 30 represents allocating 30% to discretionary spending – i.e. vacation, going out to eat…etc,” Sowhanger said. That, then, leaves an additional 20% of funds for savings, which she advises is a good number to shoot for.

There’s also the 50/15/5 budgeting rule

If the above formula seems too rigid, Kelly Lannan, a financial expert at Fidelity Investments, offers a different formula: The “50/15/5 Rule.” You still set aside half your income for necessary expenses, but allocate 15% to retirement, including your contribution and any employer matches. You’d then allocate 5% for short-term savings (a.k.a., your ’emergency fund,’) in an account you can access quickly.

“The 30% you have left over can allow you to save up for those big purchases, splurge on those life events, or just be able to say ‘yes’ to those smaller spur of the moment opportunities,” Lannan said. “After all, these are the things that make us happy—and we should be able to live the life we want, as well as well as save for the future.”

You can also break up your savings plan by time frames

“The first thing to note is that when it comes to savings, you should be thinking of 3 buckets: short, mid and long-term,” Priya Malani, a founding partner at STASH Wealth, told Girlboss via email. For example, she explained, a short-term goal might includesaving for a sweet vacay in Turks & Caicos in a few months. A mid-term-savings goal might be saving to buy a home in five years, while your long-term savings goal is saving enough to retire.

“Once you know what you’re saving for, it’s much easier to decide how to split up your savings, and how much to save to hit your savings goal,” Malani said. She recommends setting up  automatic deposits to your savings account each month, or every two weeks.

Then, Malani suggests, create an online bank account for  your savings and name it with your savings goal. “If your account is nicknamed ‘Turks & Caicos Trip,’you’re gonna think twice before you touch that cash,” she said.

Don’t forget to think about your debt situation, though

“If you have debt (credit card or student loans), you should be putting 20% of your paycheck to paying off the debt and 10% to savings,” Malani said. “The rest (70%) is yours for life [stuff]. If you are debt-free, you should aim to put 20% of your paycheck towards saving and the rest (80%) is yours for life [stuff]—bills, rent and a boozy brunch.”

When it comes to retirement, use your current income as a base

There are different online calculators available to help calculate your retirement savings, but Bridget Venus Grimes, CFP, and author of Corner Office Choices: The Executive Woman’s Guide to Financial Freedom, suggests using a simpler formula to start. “If the goal is retirement and you would like to live a similar lifestyle to what you are living now long into retirement, then you want to be able to replace your current income in retirement,” she told Girlboss via email. Determine what your current expenses are and multiply that by, say, 25 to calculate how much in total you’ll need in savings.

For example, she explained, if you have an annual income of $60K/year and about $5K/month in expenses, you’ll need about $1.5. million to retire. If you have about 40 years before retirement, a good savings goal would be in the 20 percent range, she suggested.

Sound like too much? “Put aside what you want with the goal of saving more as you can,” Venus Grimes said. “I like to suggest that each time you get a raise, allocate half for savings and reward yourself with the other half.”

Oh, and here’s one way to make sure to stick to your savings plan…

Automate it. Every financial expert suggested setting up automatic transfers to a savings account. “Let technology work for you,” Malani said. “Besides, none of us needs another thing on our to-do list.”