How Much Money Should You Have Saved By 30?

One of the most commonly asked questions is how much money should you have saved by 30. This is just one more reason people find approaching their 30s daunting. You might be anxious about what you should have achieved by now and money forms a big part of that. You might be concerned that your finances, your savings or income are lagging behind where you thought they would be.

The amount of savings or how much you should be earning by 30 is often cited and contrasted to others of the same demographic. You can get caught in a trap of thinking that you are not happy with their life at 30, simply because you don’t have the perfect job, the dream car or the ideal house. This can trigger an existential crisis in many people, and you might panic that you have wasted your youth and will never achieve the life you want.

Important Money Lessons By 30

Many people allow society to dictate what should make them happy, rather than defining it themselves. This also applies unessary pressure. The discrepancy between reality and ideal causes dissatisfaction, herefore you should aim for reasonable rather than perfect. Rather than letting society tell you how to earn, save and spend your money you need to decide for yourself. At the end of the day, this is your own personal journey, so there is not a one size fits all approach.

It simply doesn’t help to have people tell you how much money you should have saved by 30, if you don’t have it; especially if you don’t have the means to get there.Having just turned 30 myself in June 2021 I wanted to share 3 money lessons that have helped me triple my net worth and on track to retire by 2036.

#1 Money Psychology: Saving Money Is About Balance

It’s important to remember that 80% of saving and investing is about our own personal psychology, spending habits and your own personal journey. I feel that people frequently fall on two sides of the spectrum, those that struggle to save and those that feel guilty for spending. Both parties often feel anxious about money for different reasons.

I myself reached a stage in my 20s where I would avoid extravagant purchases or treating myself at all costs. It felt like spending money would stop me from reaching my financial goals and financial freedom in the future. Since then I have learned otherwise. As long as I have financial goals and systems in place to achieve them, I am free to buy value with the remaining income.

What Do You Love To Do?

If travelling for 3 weeks of the year and/or staying in luxury resorts is what does it for you, then you don’t have to stop. It’s important to continue to experiment and purchase objects or experiences that you think may enhance and add value to your existence.Whilst it is important to curb lifestyle inflation, it’s just as critical to stop penny pinching and instead grow your income.

#2 Money Habits: Systems Not Goals Are Essential For Making Progress

Throw off the financial handcuffs; they will only make you miserable. You don’t need to be on a financial diet to save money but you do need good systems. You can design all the budgets and goals that you want, but you will not achieve them until you build positive habits and they compound up. This is ultimately more imporant than how much money you should have saved by 30. Therefore, It’s essential to build financial systems and habits that will not only enhance your quality of life but your bank account too:

• Automate your savings and investments
• Pay yourself first
• Switch providers frequently to reduce your core expenses
• Negotiate your expenses
• Review and cancel subscriptions regularly

Focus On Recurring Expenses

By understanding our negative repeating behaviours that cost you money and don’t add value, we can replace them with better ones. For example, we can remove the 3x per week fattening takeaway and replace them with nutritious buddha bowls.The point is that you should spend money on things that enhance your life whilst cutting away those that don’t. We simply replace the financial cravings.

#3 Lifestyle Design: Financial Freedom Can Be Reduced To Constituent Parts

Freedom of time, location independence and autonomy in work; are the constituent parts I feel contribute to my happiness. If I can generate an income with all three, then I would be incredibly happy. However, we convince ourselves that only when we have ‘enough’ money will we finally be able to be fulfilled.

Asking how much money you should have saved by 30 is abritrary unless you know what your end goal is and how much is enough. Learn to know what is enough.

The Pessimistic Deferred Life Plan

The deferred life plan of waiting 15-20 or more to replace your active income with passive income from the stock market can become frustrating. When you are still working close to 40 hours per week in a job you dislike or are bored by, you can become indifferent and emotionally flatline. Patiently waiting for financial freedom is not worth this cost and it’s better to take action now, than 20 years in the future. This might mean:

• Changing job and/or career direction.
• Quitting your job and/or taking an extended break from work (as I did in 2020).
• Building side hustles to replace your income.
• Working less hours or more flexible hours.
• Remote working.

Focus On Creating Flow States

The traditional 9-5 can be restrictive in each of those aspects; time, location and automomy. However, it does often create flow states that result in intrinsic enjoyment or satisfaction relating to work. Whilst people often crave more time, they are not familiar with structuring their time or environment to create states of flow.

Occupations based on freelance work i.e. copywriter, website designer can condense the number of required hours, and provide autonomy and independence in time and location. You could theoretically condense your work into 8 hours per week and work anywhere in the world.

Therefore I think it is necessary to consider the type of work we want to do now, rather than when we are financially independent. The catch; the lack of time and mental bandwidth due to working a 9-5. Personally, I think solving this problem, is more importating that how much money you should have saved by 30.

What Lifestyle Do You Want To Lead

The things we spend our money on should reflect the lifestyle we want when we reach financial freedom.By living with less and directing your money to uncover what you value in life, you can achieve a greater level of wellbeing. Saving money often forces you to close off certain outlets of spending, often possession based, so you can maximise spending on others. Frequently you will find you often want less than you originally thought you needed and this fast-tracks your wealth journey.

Take The Time To Explore Your Interests

Through taking time to travel I realise that I want time and location freedom to explore nature, whilst being able to spend time focusing on my writing. Travelling in itself is not enough to provide me with purposeful and meaningful work. This aspect of financial planning is key.I believe there are two fallacies when it comes to long-term financial independence planning:

1. The illusion of giving up work when financially independent will result in happiness.
2. That you need to be a multi- millionaire to live a millionaire lifestyle.

You do not need to be a millionaire to live a millionaire lifestyle.Freedom of time and location combined with enough income can result in the feeling of living a rich lifestyle; however this must be combined with autonomous and meaningful work.

Final Money Lessons For My My 20 Year Old Self

Of all my money lessons in my 20s, it’s not just the saving and investing knowledge that have been the hardest to learn. There are many times in my 20s I fretted about spending money (i.e. meal out, an expensive watch or booking a hotel room), and at times it’s still something I struggle with.

In reality, these problems only existed in my imagination, when I actually had the money to solve them quite easily. Sometimes you just have to go with the flow of life and your habits will do the rest. So building good habits by the time you are 30 is more important than how much money you should you have saved by 30. Consistency is a better driver and measure of success in all forms of life, that the decisions we often scrutinise.

• If you can afford to spend money on something you think will create an incredible memory, then do it.

• Don’t neglect yourself by trying to keep costs as low as possible; buy value.

• Focus on increasing your income by job hopping and learning new skills, stop scrutinising over small purchases.

• Build skills that will promote time, mobility and income.

• Learn to build good savings habits when you are in your 20s, this way you can maximise the benefits of increased income.

• Start a hobby such as blogging, vlogging or podcasting as early in your 20s as possible.

• Planning how to become financially independent as soon as possible (Use my free calculator).

• Consistency is more important than any significant decision you will make.

• Focusing on learning or creating something every day or week to build expertise.

• You don’t already need to be an expert to contribute, you can learn as you go.

• Aim to start, not to start something perfectly.

• Read non-fiction and learn from the best out there; you will discover blueprints for success.

• Most great entrepreneurs out there, started from scratch just like you. Over time they became experts.

• Focus on solving painful problems and other people’s pain points.

• Make being happy, healthy and wealthy intentional.