How To Make Sure You Save Enough By Age 35

It’s common to think about how much money you need to save for your retirement. But that may be a long time from now, depending on your current age. It’s a good idea to think in shorter terms. Have you considered how much you should have saved by the age of 35? It’s never too early to make an effort to set aside money…

How Much the Average 20- and 30-Something Has Saved

If you can save, you might wonder how your balance compares with others your age. Savings vary by age, financial situation, and goals, and generally rise over time. Federal Reserve data from 2022 shows median bank balances of $5,400 for people under 35 and $13,400 for those 65-74.

But being younger isn’t necessarily a drawback: Despite likely having fewer years in the workforce and potentially having education or family-related expenses, the under-35 group is the only age range that has steadily increased its median bank account balances at three-year checkpoints over the last decade:

^{Source: The Federal Reserve’s “Survey of Consumer Finances” (2022), median transaction account balances by age group. Transaction accounts include checking, savings, money market, and brokerage cash accounts, and prepaid debit cards.}

In addition to what’s in bank accounts, the median saver under age 35 has these assets:

• $22,500 in directly held bonds and stocks
• $10,000 in certificates of deposit (CDs)
• $1,300 in savings bonds

With the $5,400 in the bank, these amounts total $39,200. Additionally, this age group has a median retirement account balance of $18,880.

Americans under 35 are the only demographic that has steadily increased savings over the past decade. Regardless of these numbers, it’s important to note that there’s no universally correct amount to save. 

 “Don't compare yourself to others,” said Chloé Moore, certified financial planner (CFP) and founder of Financial Staples, a financial planning and investment management firm. “Just focus on yourself and make sure that you set good, intentional goals for yourself and that you work toward achieving those goals.”

Savings Targets to Aim For Before Hitting 35

To reach a savings goal, you first need to set one. You can start by tracking your income and expenses for a few months to see where your money goes and where you can improve. This can help you decide on a realistic target. A financial advisor can also help you set your goal and create a plan to reach it.

Moore generally recommends saving at least six months of take-home for an emergency fund, for example, but that varies based on personal circumstances. Instead of suggesting specific dollar amounts, she offers guidelines for her clients, many of whom are young tech professionals and first-generation wealth builders. 

She offers some tips to boost your savings habit:

• Start small: If saving six or 12 months of expenses sounds intimidating, she said, start by trying to save one month of living expenses. “Review your cash flow and just see if there are places where you can essentially save a little bit more each month,” Moore said.
• Add income: If you have valuable things or other possessions that you don’t need, Moore suggested that you consider selling them or look into getting a side hustle to generate more income if you can’t lower your expenses. 
• Have a plan: If you receive a lump sum of cash, whether it’s unexpected or something like a tax refund or bonus, know what you are going to do with it. “Try to have a plan for those before you receive them and not just think of it as free money that you can just spend,” Moore said. 

For more advise on how to reach your goals, you can read the full article here.

No matter your age
, there are many good reasons to focus on saving money, and plenty of tried and true methods to get you started. What matters most is that you are aware of the need and are making an effort. Establishing good habits will help in the long run, and it is much more important than the amount you have set aside today.