How Much Money Should I Have Saved By 30?

For many, turning 30 feels like becoming a real adult. You're not old, but not the youngest anymore either. At this stage, a lot of people begin thinking about big life milestones like buying a house, getting a nicer car, going on vacation, starting a family, and planning for retirement. That's when questions like “how much money should I have saved by 30?” naturally start popping up. 

According to the Federal Reserve, the average savings for Americans under 35 is $20,540. This is a bit below the ideal amount for this age group, but it's not surprising since most 20-year-olds are just starting their careers and don't earn much.

If you're in your 20s and aiming to enter your 30s with a solid savings account, the best you can do is to start now. Most finance experts agree that saving any amount, no matter how small, is better than saving nothing at all. 

So, how much should a 30-year-old have saved? This article tackles this question and offers expert tips to achieve your savings goals.

How much money should I have saved by 30?

When it comes to saving, there's no exact science since everyone's financial situation is different. But if you're looking for a target number to guide your financial goals, here's a straightforward rule of thumb: by age 30, aim to have saved an amount equivalent to one year of your annual salary.

“If you make $40,000 a year, you should have $40,000 in retirement savings. If you earn $100,000 a year, you should have at least $100,000 saved,” says Melanie Musson, a finance expert with Insurance Providers. This number comes from a commonly accepted principle in personal finances that suggests an adult entering the fourth decade of their lives should have a year of their income in savings. 

In the first quarter of 2024, Americans aged 16 to 24 had a median weekly income of $763 for men and $703 for women, according to the Bureau of Labor and Statistics. This translates to annual salaries of approximately $39,682 and $36,556, respectively. Therefore, young adults earning an average salary today should aim to have saved between $35,000 and $40,000 by the time they turn 30.

“The next best number to what you should have saved is 75% of your annual income,“ Musson says. Besides retirement savings, every adult should have an emergency fund that covers at least three months of living expenses. “For most people, that number is around $10,000 to $15,000,” she adds. 

How to reach your savings goals by age 30

If you're lagging behind in your savings goals, don't get discouraged. The first decade into adulthood isn't always the easiest for saving money, especially with lower incomes—as the data shows, you're not alone in this. What you can do is create a plan to boost your savings and catch up. Here are some tips:

1. Make a monthly budget

Making a budget is the first step to building a solid financial foundation. By tracking your expenses, you'll have a clear vision of where your money is going and where you can cut back or reduce expenses to save more.

There are various budgeting methods to consider, such as the 50/30/20 rule (that splits your income into essential expenses, discretionary spending, and savings), the zero-sum budget, and the envelope budget. 

Take some time to explore these methods and pick one that fits your financial goals and lifestyle. Many budgeting apps sync with your bank accounts, making it easier to track seamlessly.

2. Payoff high-interest debt 

Debt eats into your paycheck and can seriously limit how much you can save each month. So, you should have a debt repayment plan and factor those monthly payments into your budget. Begin by tackling high-interest debt—like credit card debt. 

Then, if you have them, turn your attention to student loans. For student loans, consider opting for an income-driven repayment (IDR) plan offered by Student Aid. This plan adjusts your monthly payment based on your income and family size.

3. Prioritize your emergency fund

When you start saving, focus first on building an emergency fund. It's important to start saving for retirement early too, but initially allocate more towards your emergency savings. An emergency fund is there to cover unexpected expenses, preventing you from relying on credit cards and falling into debt. Once the emergency fund is set, you can ramp up your retirement savings.

4. Take advantage of 401(k) matching

Once you start planning for retirement, take advantage of employer-matched retirement accounts like the traditional 401(k). Simply put, some employers offer a matching program where they'll match 50% to 100% of what you contribute, up to 6% of your annual salary. Check if your job offers this and start using it to boost your retirement savings.

5. Leverage compound interest

Compound interest is interest earned on interest. This means that the money you save in an interest-bearing account not only earns interest on the principal amount but also on the accumulated interest, creating a compounding effect over time. If you're looking to accelerate your savings, allocating a portion of your money in an interest-bearing savings account can help you with that.

6. Slowly increase your savings

Going from saving nothing to saving half of your salary right off the bat is not realistic for most people—and not sustainable long-term. Instead of frantically saving, increase your savings rate little by little. “You probably can’t double your savings in one month, but if you’re used to saving $100 a month, boost it to $110 next month and $125 the next month,” Musson adds. 

7. Avoid lifestyle inflation

A common mistake in personal finances is to start spending more every time your income goes up. This is called lifestyle inflation and can take a toll on your ability to save money. Ideally, even as your earnings increase, aim to live below your means. 

“When you get a raise, maintain your lifestyle and put your additional income into savings,” Musson says. “Cut out discretionary spending and save what you don’t spend.”

8. Automate your savings

It's tempting to spend money when it's laying around in your checking account. To avoid that, open a separate savings account and set up automatic transfers on payday from your checking account to this new one. This way, you won't even have to think about saving, which makes saving a lot easier.

Where to allocate your savings

Your savings account and retirement account should offer security, competitive interest rate, and lower fees. For your retirement savings, a 401(k) and an Individual Retirement Account (IRA) are often the best options.

“If your employer offers a 401(k) matching program, take advantage of the free money you can earn through matching,” Musson says. “Otherwise, a Roth IRA is a great option. Both have tax advantages that it would be a shame to miss out on.”

For your emergency fund, consider opening a high-yield savings account that has a higher interest rate than regular savings accounts and gives you easy access to your money. “For your emergency fund, you want your assets liquid. So, a high-yield savings account is a great option.”  

If you intend to invest, consider a CD ladder (certificates of deposit with staggered maturity dates). “If you can keep three months’ worth of assets in a high-yield savings account, a CD ladder is an excellent way to invest another three to six months’ worth of living expenses,” Musson says. “The CDs should mature periodically so that you can access additional funds every two to three months.”

Frequently asked questions

1. Where should I be financially at 30?

There's no one-size-fits-all rule that applies to every individual. At age 30, it's generally good to have 3 to 6 months' worth of living expenses saved in an emergency fund, your annual salary saved in a retirement account, and a plan to pay off any debts you have.

2. How much does the average 30-year-old have saved for retirement?

According to data from the Federal Reserve, the average 30-year-old American has saved up to $18,880 for retirement. Ideally, by age 30, you should aim to have saved at least the equivalent of your annual salary. Another good target for retirement savings would be 75% of your annual income.