How much money should a 30 year old have in savings?

Everyone's financial situation is different. In general, however, it's recommended that you have at least a third of your annual income saved by the time you hit 30. If you're just starting out with little savings, that might seem like an impossible goal. But even if you’t have much money right now, there are steps you can take to start saving more and investing for your future sooner rather than later.

If you’re reading this as a 20-something who still has their entire career ahead of them, know that it’s never too early to start thinking about your retirement (or unEND - as we like to call it). Even if you can only spare a few dollars from each paycheck now, these are all great habits to get into and habits that will benefit you in the long run.

Automate your savings

If you want to make sure you’re saving as much as you can, you’re going to have to make it a habit. The sooner you can start saving, the more time your investments will have to grow, and the more you’ll have saved for your future. The easiest way to make saving a habit is to automate it, so you don’t have to think about it or make a conscious decision to transfer money each month.

You can set up an automatic transfer from your bank account to go straight to a 401(k), an IRA, or any other savings account you have. The less you have to think about saving, the easier it will be to build that habit up.

That being said, it’s also important to not let saving take priority over all your other expenses. You should still make sure you’re putting enough money away for bills, groceries, and other essentials, while also making sure you’re investing enough to have a comfortable future.

Commit to a 401(k)

Your 401(k) is one of the best ways to save for the future. It’s also one of the easiest. Anyone who works a job where they get a 401(k) (or any other type of employer-sponsored retirement account) should absolutely take advantage of it. A 401(k) is a type of investment account. The money you put into it is technically saving for retirement, but it’s invested in the stock market, so it could also grow and make you extra money in the short term.

An advantage of a 401(k) is that your contributions are deducted from your paycheck before taxes. This means you’re saving money on taxes twice over: first, by putting money into your 401(k) now and second, by not having to pay taxes on that money in the future when you withdraw it for retirement.

Protect your credit

Your credit score is essentially a summary of how trustworthy you are as a borrower. Lenders, landlords, utilities, cell phone providers, and even some employers can ask for your credit report as part of the application process. And if there’s something you don’t like on your credit report, it can be really hard to get it removed.

If you have bad credit, it might seem tempting to ignore the situation and hope it fixes itself. But the reality is, it probably won’t. So if an error is dragging your score down, or you don’t have great credit, there are a few things you can do to try to improve it.

There are a few different credit reporting agencies, but the most common one is Experian, and they offer a free credit report once a year (as well as free credit monitoring). You can also get your free report from the other two big agencies as well. Once you have a report, you can investigate any errors, dispute them, and work towards having better credit in the future.

Don’t rely on your emergency fund

Your emergency fund is meant to keep you afloat if you lose your job, get sick, or have some other emergency that prevents you from making money. Ideally, you have an amount saved up that would cover three to six months’ worth of living expenses.
But the truth is, this rarely happens. Most people don’t have an emergency fund, and many of those who do only have about $1,000.
Because it’s meant to keep you afloat in a very specific situation, it’s important not to use your emergency fund on anything else. If you use your emergency fund to pay off credit card debt, for example, you risk having nothing left if something actually goes wrong.

Save for the future

As important as it is to keep a good handle on your current finances and emergency fund, you also need to think about the future. Your 30s are a good time to start thinking about retirement, especially if you’re in a profession that has a high risk of retirement.
What will happen to you when you’re 65? Will you still be working at the same job? Where will you live? How will you pay for things like health care?
These are all questions that are hard to answer now. But by saving for retirement now, you can put yourself on track to have enough money saved up to last you the rest of your life in comfort. The earlier you start saving, the more time your investments have to grow.

In general, retirement savings should be one of your top financial priorities as a 30-year-old. If you don’t have much saved now, you have time to make up for it. But it’s important to start putting money away as soon as possible.

If you’re just starting out with little savings, that might seem like an impossible goal. But even if you’t have much money right now, there are steps you can take to start saving more and investing for your future sooner rather than later.