The Importance of Saving for Your 30s and Beyond: Strategies, Goals, and Tools

a person stacking coins on top of a table

eppendpeYour twenties are a formative decade. Many of us finish college and begin a career, discover new interests, consider starting a family, work our way up the property ladder — the list goes on.

But, while you’re out there discovering yourself and kicking off your life, it’s easy to overlook the importance of kicking off your savings, especially if you want financial freedom in your 30s and beyond.

With the rising cost of living, it can be difficult to save money while staying afloat and living your life. But the truth is that there are a plethora of relatively simple, tried-and-true strategies available to assist you in saving for your future financial goals.

More importantly, there are a number of savings vehicles and investment products worth investigating that can assist you in starting to build your nest egg now — so that by the time you’re 30, you and your family will be in a pretty good financial position.

This guide explains why saving for your 30s (and beyond) is important, how much money you should have saved by 30, and the tools you can use to start saving for or even during your 30s.

How Much Money Should I Have Saved By 30?

“How much money should I save by 30?” This is a common question, but there is no one-size-fits-all answer. It depends on factors like income, lifestyle, and savings goals.

This will include where you live, whether you have children, whether you rent or own a home, how you shop, whether you own a car, and a million other details. Everyone will have their own magic number that they must calculate for themselves.

Having said that, it’s worth looking at some averages as a starting point.

According to the Federal Reserve’s Board Survey of Consumer Finances, the average savings balance for people under 35 in 2019 was $11,200. However, there are competing interests to save for, so let’s explore those interests and recommended saving amounts.

Putting together an emergency fund

Experts advise having an emergency fund with 3-6 months’ worth of living expenses. To calculate the target amount, list your essential monthly expenses and multiply it by 3 or 6. Avoid using credit cards or loans, as rising interest rates may lead to overwhelming debt.

This fund must be available at the drop of a hat, and its exact size will fluctuate up and down over time depending on your monthly expenses.

If you don’t have an emergency savings account, don’t worry. Start by opening a dedicated account (like Tellus’ high yield accounts) and deposit what you can each month. Micro-saving strategies and tools will be discussed later.

Putting money aside for retirement

When you’re in your twenties, retirement may seem a million years away. However, if you want to build a large nest egg and reap the benefits of compound interest throughout your life, you must begin saving early.

Pension providers typically recommend that you save the equivalent of your annual salary by the age of 30. That means that if you earn $75,000 per year, you should have $75,000 in your retirement fund by the time you reach your 30th birthday.

Before you get too worked up, this figure does not refer to the amount of money in a jar on top of the fridge.

Your retirement savings, invested in pension plans, 401(k), Roth IRA, or other, may include stocks and index funds, resulting in a higher balance than the initial investment.

Nonetheless, pension providers estimate that you must save at least 15% of your annual income for your pension in order to reach this retirement goal.

How Much Money Should You Have By 30?

Before we get into how much should you have saved by 30 the time you’re now (and the tools you can use to do so), let’s take a step back and discuss why you should be saving.

Don’t worry if you’re in your mid-twenties and haven’t started saving yet. It isn’t too late. But the truth is that your thirties will most likely be an expensive decade. More importantly, they are critical in terms of preparing yourself and your family for the future.

That is why, by the age of 30, you should start making your money work harder for you.

Let’s talk about numbers. First, there is family formation. We understand that the linear family model has evolved significantly, but the median age for marriage in America remains 29 for men and 28 for women, according to the US Census Bureau.

According to the National Association of Realtors, the median age for first-time homebuyers in the United States is now 33.

And if you’re thinking about getting married and buying a house, chances are you’ll want kids (if they haven’t already).

Whatever your financial situation or future plans are, there’s no getting around the fact that your 30s are statistically going to be expensive. Worse, it appears that most twenty-somethings aren’t prepared for those costs.

According to a Bankrate 2022 survey, only 41% of millennials had enough savings to cover a $1,000 surprise expense. Worse, inflation has eroded the little spending power that many of us had. According to the same survey, 54% of people in their 20s and 30s admit to using their savings accounts to cover everyday expenses.

But saving in your twenties isn’t just about the future.

This is also the time to start thinking about your retirement. This includes participating in an employer-sponsored retirement plan, putting money aside, or choosing another long-term investment vehicle that can help you build compound interest over time.

If you’re unfamiliar with the concept of compound interest, it’s when interest earned on a balance in a savings or investment vehicle is reinvested, earning you even more interest.

Assume you deposit $1,000 in an account with a 3% annual interest rate. After a year, you’ll have earned $30 in interest. However, compound interest would earn you 3% interest on your principal plus interest ($1,030). That means you’d receive $30.90 in interest the following year.

We realize that doesn’t sound like much. But if you save thousands of dollars per year, it all adds up pretty quickly. Compound interest is essentially free money, and if you start saving in your early twenties, it will significantly boost your savings by the time you’re 30.

Some saving vehicles, such as the 401(k), also provide tax advantages and typically higher returns (k). Savings made in your twenties have an extra decade to compound than savings made in your forties and fifties. That is why it is critical that you begin saving as soon as possible.

How to Begin Saving Before the Age of 30

We’ve already discussed why you should begin saving for your 30s and how much you should save. Let us now discuss how much money to have saved by 30.

There are numerous options available, but we’ll walk you through three tried-and-true ways to save for the future.

Apply the 50-30-20 rule.

With the rising cost of living, one of the most difficult aspects of saving for the future is simply finding enough money to put away each month. This is where the 50-30-20 budget rule comes in handy.

The 50-30-20 rule is a money management strategy in which you divide your annual income (or monthly income) into three categories: needs, wants, and savings or debt.

Spend 50% must on non-negotiables such as rent or mortgage payments, household bills, transportation, and food. Your 30% should then be used for discretionary spending, such as shopping, eating out, vacations, and things like streaming subscriptions.

Finally, set aside 20% of your monthly income to pay off debt, such as student loans, credit card payments, or car loans, in excess of the minimum payments, or to put into a savings account, investment account, or pension fund.

If you look at your outgoing expenses and believe it is impossible to save 20% of your income, you should reassess your expenses and try to cut back.

You’ll start building your nest egg for the future by aiming to save 20% of your income. However, where you put that 20% is determined by your savings goals.

Set up a 401(k) plan (k)

If you’re unfamiliar with the concept of a 401(k), it’s essentially a retirement plan that you can invest in over time.

People like 401(k) as it’s pre-tax, meaning it doesn’t affect taxable income. The account grows tax-deferred, so taxes are paid when money is withdrawn after retirement.

However, there is some fine print here. You must wait until you are 59 to make withdrawals, and you must withdraw a minimum amount.

401(k) plans are also referred to as “defined contribution plans.” This is due to the fact that they do not guarantee you a specific level of income. Instead, it is your responsibility to save money in the plan.

Many employers offer 401(k) matching bonuses, which means they will put money into your account for every dollar you contribute. Those contributions are typically limited to a percentage of your salary, but they are essentially free money. As a result, the 401(k) plan is an extremely popular way to begin saving in your 20s and 30s.

Set your own goal, then devise a strategy for achieving it

Aside from working with a financial advisor, the best way to figure out how much you should have invested is to use a retirement calculator, which will take your information and return much more personalized advice.

Don’t get me wrong: it may still feel like your guidance is laughing in your face. That’s when strategies like the ones listed below come in handy to help you gain traction.

Set monthly or weekly goals

In 2020, workers aged 25 to 34 earned a median annual wage of $47,736. To save $40,000 by age 30, someone starting at 25 would need to invest $580 per month with a 6% average annual return. T. Rowe Price reduces this to $300 per month.

That is still a significant sum of money. Looking at it weekly, however, it improves slightly: $133 per week under Fidelity’s model; $70 under T. Rowe Price. If you break your goal down into small pieces like this, you might find that you can at least work your way up to it.

Learn how tax breaks reduce the cost of saving

By investing in a 401(k) or traditional IRA, you can receive a tax break where $580 can be contributed monthly. However, the contribution only reduces your monthly income by $500 due to the tax break, as you receive the remaining amount back during tax time. If your income is low enough, you may also qualify for an extra saver’s credit when filing taxes.


At the end of the day, you should always be prepared for an emergency and work to safeguard your (and your family’s) financial future. That is why you must save, especially before the age of 30.

Understanding your financial goals is crucial for saving money. Learn about different savings options to make your money work harder and generate passive income. Follow these rules for success.

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