Asked by Anonymous
Asked on 25 Jun 2019
I am turning 30 in two years, how much should i have saved/invested (assets) at that age?
Every individual is different with different responsibilities, bills to pay, loans, inheritance, salary etc.
There is no fit-for-all amount to achieve at 30. There is a guideline from Seedly and other financial blogs on the percentage to save, invest and expenses.
(20% for savings, 50% expenses and 30% wealth)
Also, pay off the loans (if any) first, then get healthcare insurance set up and start building your emergency fund (6~12 months of monthly expenses) before you move on to investing.
When it comes to, "How much should I have saved by the age 30", I'll like to think of it this way - What would I possibly need to spend or rely on when I hit the age of 30?
And that for an average Singaporean could be dependent on 3 requirements:
Be able to have 6 months worth of emergency funds
Be able to afford downpayment for a BTO (25% of the property price, 5% must be in cash)
Fulfilling our partner's dream of getting married before 30
Here are the breakdown and assumptions.
1) Be able to have 6 months worth of emergency funds
Say you're making an average salary of a Singaporean between the age of 25 to 30 and that's S$4K (inclusive of employer CPF contributions). Which means that you will need S$24K in savings to overcome any short term adversity in your life. Breaking that down into 60 months (12 months*5 years) you will find that you need to save at least S$400 per month to check this requirement.
2) Be able to afford downpayment for a BTO (25% of the property price, 5% must be in cash)
Say you're merely looking at a 3-room BTO with the assumption that the property will cost S$200K. Also, you will like to pay all 25% in cash and not touch the savings in our CPF. Which means that you will need to folk out S$50K cash in downpayment (Well, you might be able to share this load with your partner, case by case basis).
Breaking that down into 60 months, (12 months*5 years) you will find that you need to save at least S$833 per month to check this requirement.
3) Fulfilling our partner's dream of getting married before/on 30
Well, I won't go into detail on why the average cost of weddings in Singapore is S$27K You can read about it here https://blog.seedly.sg/cost-of-wedding/
Once again, Breaking that down into 60 months (12 months*5 years), you will find that you need to save at least S$450 per month to check this requirement.
This is an important requirement that you would want to check especially if you are with a "marry-or-flight" partner. In summary, if you're just like me, then these are the 3 things that will bother you when you're on your way to 30. Which means to check all three requirements, you'll need to save at least S$101K (S$1,683 per month) to achieve this goal. I say it's insane but achievable. Alternatively, just pick the requirements that are most important to you and work towards your goals.
1) 6 Months Worth Of Emergency Funds
Total Savings Target: S$24K
Monthly Savings required for the next 5 years: S$400
2) Downpayment For A BTO
Total Savings Target: S$50K
Monthly Savings required for the next 5 years: S$833
3) Getting Married Before/On 30
Total Savings Target: S$27K
Monthly Savings required for the next 5 years: S$450
I hope this helps!
It seems you’re looking for a general benchmark, so a good figure is probably $100,000. It’s what an average uni grad would have saved by that age.
Currently, the average grad earns a median salary of $3,400. That’s a take home pay of about $2,700 after deducting CPF contributions.
We’ll assume you’re an average spender (neither super frugal nor high-rollin') and have no loans to pay off (most grads’ uni fees are paid for by their parents).
Ladies will graduate at 23 years old (= 7 years of savings), while men graduate at 25 (= 5 years of savings). We’ll take the average (= 6 years of savings).
Most finance sites/experts recommend you save half your salary, so that’s like saving 6 months of pay per year. With the standard 5% annual salary increase, 6 years of savings comes to $110,188 - or $100,000 conservatively. (The $10,000 buffer can be for overspending, emergencies, etc.)
We could go further and assume you want a wedding (about $15,000 per spouse) and a renovated BTO ($20,000 downpayment per spouse) by age 30. After paying for these, your remaining savings will be $75,000.
I think everyone will have a different benchmark on how much is a good benchmark when it comes to saving up by 30 years old?
For example there was some people who were fascinated by the $100k by 30 benchmark.
But i believe that ultimately it is up to individuals to decide what level is best for themselves...
I would think that:
having manageable debt (eg home loan) not huge credit card debt or loans
at least 6 months worth of savings for rainy day funds
This is a baseline!
Including CPF, my networth is 3x of my gross annual salary after 5 years of working.
Minus CPF, it's about 1.5X my gross annual or 2X my nett salary. Perhaps that's what you should aim for.
Really depends on your goals.
People are a little obsessed with the idea of $100,000 for some reason. I'm not sure why.
Just try to associate it with your own personal life and then figure out how to get there.
If I'd like to build a life with my girlfriend, I need about 2.2 million.
So by 30 it has to be like...at least $400,000.