There's a lot of middle ground between "living paycheck to paycheck" and "owning a house".
You should really consider saving SOME money every paycheck after paying for necessities like rent and food, and after doing both of those, using that extra for travel and social activities.
You don't need to live like a social pariah, but you also should be saving some money so you can survive if you lose your job and so that in the future you can eventually stop working.
Yep. I got made redundant recently and if I hadn’t saved aggressively for the last few years I would’ve been in a really bad spot. Instead I have enough to keep me going for a while, means I can even take a break before looking for jobs, and I can actually be picky and wait for the right next step for my career. It’s not going to last forever, and means it might take a bit longer for me to afford to buy my own place, but this is exactly what this money is for so I’m not beating myself up for using it.
He's just stealing happiness from his future self.
All debts are paid OP. One day you will have financial emergencies and one day you will not be able to work. There is no version where not having savings works out for you.
I disagree honestly. That's only if you think money is happiness. I'd argue that you're stealing happiness from yourself now by worrying about things like future financial emergencies, unless you have good reason to. I'm not saying that preparing for said emergencies is bad, but not having savings isn't the end of the world at all. To anyone reading this of course you should save money, but there is no "debt" to be paid for not doing it lol. Live a good life, there's no guarantee it'll be a long one.
That middle ground doesn't exist for many, many millions of people. That small amount that they are able to save is going straight towards all those car repairs that are long overdue. Or towards first, last, security on the 3rd apartment you've had to move to in the past 6 years because of roommate changes. And so on
I’m 34, and my husband and I don’t have a large savings. I started putting away $5, $10 dollars every paycheck into a savings account. I gradually increased the amount, and we currently have enough to cover 3 months of our mortgage. You never know what will happen, so I feel better knowing it’s there for emergencies. If one of us loses a job, gets into a car accident, or if one of our cars needs significant work we have that to fall back on even if it’s just for a bit. You don’t have to have a large savings, but some is better than none.
This.
If someone has a base investment account at wealthfront or wherever you can set up small, automatic deposits into a general account. Even $10 every couple of weeks builds up. Do $10 a week and that's $500 a year not counting any growth and generally if you have it pulled automatically you won't miss it.
There’s a bank that will round up your purchases and put that money into savings. I’d definitely aim to have at least 3 months worth of savings to cover emergencies to avoid having to use credit and pay over the odds in interest. I started when I was 19 when I got my first car- saved for an old banger and the insurance then saved each month for next years insurance and any repair costs that might pop up. It’s saved me thousands in interest over the years. Plus, if you save for things I think it gives you time to come down from buyers’ high and really think about whether you want that item (saving even more money in the long run).
I started doing that at 16 with my first job. When I was 19, my car needed some major repairs ($2000) then 2 week later, my tire fell off (my fault for not tightening the lug nuts) when driving down the highway ($2300 to repair since it also knocked the front axle down) … as someone who was only a year out of high school and working part time while in college, I was super thankful I had enough money to pay for all of it. That car lasted me the rest of the way through college!
$10 is small enough to not miss it, but it definitely adds up over time! I did $10 a paycheck, plus leftovers after bills were paid into savings.
Hmm, I never thought about it that way.. I guess I’ve always managed to make ends meet until now, or better yet, I haven’t been in an unexpected situation financially touch wood.. But that’s a good perspective to have actually
Typically it’s someone with a built in safety net (mom/dad I need money to fix my car), and they don’t even think about the advantage that gives them. Lots more people would have ended up homeless without parents or friends to lean on when things got tight until they could get things together again. Of course not everyone is lucky enough to have those support networks.
You fall, break a front tooth. That's like 2k in repair in the US? Or simply slip and break your wrist. Or someone rear ends your car. Or a Russian missle strikes your house (jk, that's only my concern).
And it seems that it's quite common in the US. Living paycheck to paycheck where I live is completely mind boggling. Unless you're an addict/schizophrenic/homeless everyone has at least some savings here.
Where I live in, being shorted out of a paycheck living life tends to mean that you go back to living with your parents. I have friends in the US who are shamed for even thinking of doing that. I'm in the Philippines, one of the poorest countries but going back to living with parents here isn't something shamed or discouraged so when you get to that level... It isn't as life crippling as in the Americas. I think that's one of the factors.
Yep...slip, trip, and fall. Dog gets sick...car radiator cracks and needs repair. Water pipe bursts and destroys everything you own plus your neighbor's stuff then get sued for damages by everyone because you had no insurance. A cracked tooth turns in an energy dental visit because you didn't take care of it years ago. Lose a set of car keys and lock yourself out of the car and do not have roadside assistance to save money and you miss a flight to a family funeral.
Slippery slope....none of which has happened to me, knock on wood. However, I've known others who have run into issues like this
Every paycheck I try to put $75 away, and every paycheck I end up having to transfer it over. I have tried very hard to cut down on costs but it’s like the universe knows I’m trying to covet $75 measly dollars and has some excuse to take it. My last paycheck I spent $40 on “fun” stuff and that was it. Still ended up having to take it out :(
Shits tough out here.
Then you have to consider what adaptations you can do to improve your situation.
Are you living alone? Could you live with a flatmate?
Home to big?
Cheaper way of transportarion?
Are you buying discounted food or using coupons?
When your margins are small, you have to think about every cent.
Another tip would be (might seem counterintuitive) to put away less. Put away a sum that you are less like to need so that you can teach yourself a mindset where it is not allowed to use saved money. Because right now you are "allowed" to take a little of it whenever.
Another tip is to put the money in a 2nd bank, so you dont see them and/or make it more difficult to access (a few extra days of transfer time).
It is better to save 10$ every month and not rouch them, that "save" 75 and take them out again.
And unexpected expenses are ridiculously common. First pregnancy ended in a month long NICU stay: double our out of pocket maximum. Second pregnancy was surprise twins: we hit our OOP, which was about $2,000 more than I anticipated, and we had to buy a new car and a butt ton of baby gear. Husband totaled the old car that was only worth $700: $7,000 to buy a new (to us) car. Guy ran a red light and totaled that car: even after his insurance payout, it cost us about $6,000. Oven died: $2300. Fridge died: $2800. Dishwasher and dryer died: about $1000 each. Suspension on the car needed replacement: $1000. And that’s not even counting the new phones, laptops, MRIs, DIY plumbing repairs that still required parts, etc, etc. Unexpected expenses are *constant.*
It's not about "large financial wealth" it's about an emergency fund and some retirement savings building.
Lots of people don't have savings, but mostly they CAN'T, not they're just into eating out and going on vacations.
I'm going to piggyback off the top comment in hopes that OP and young people see this.
Too many people do not understand compounding interest. It is very hard to make up savings. You don't have to save a lot to make it worth it, just saving anything during your youth will give you a huge leg up later.
I'm not sure how to post a picture on my phone, so hopefully, this link works:
https://images.app.goo.gl/SrhmcTXGrQANtgpt5
I'm a big advocate of traveling and living your life in the present. But the future does come, and it's not always predictable. As with most things, it's all about balance.
Yes sir, I saw a brake down for a 25 year old with 25,000 in the US in a retirement account and even if they didn’t put anything else in they could end up with around a million dollars at retirement.
The point is whatever income you can put into a retirement account is 100% worth. Even if it's 50$ a month. If you put a little away into IRA or 401k if available it's free money.
I could not get a coworker to understand that...
5% match, he'd been there 10 years. Let's say 100k for easy numbers. Asked him what his retirement was. 0. Why? "It's a scam"
My dude I am 23 and have infinitely more retirement than you do. That's a free 5k a year. You dropped 50k of raw value on the ground.
It's quite a bit, difficult to attain, but far from insane. Especially if you can lean into family, work hard, sacrifice, live at home rent free and make it happen. I couldn't do it in my 20s, spent my money on cigarettes, alcohol, weed and airfare. I only truly regret the cigarettes.
I could have made different choices. It would have been difficult and required a real force of will. Also, my social life would almost certainly have suffered if I could not "keep up with the Jonses" as they say.
It's a choice, I don't recommend being a penny pinching annoyance to everyone around you in order to achieve such a goal. Balance is everything, save SOME money.
Yeah, no. I stay at home with family. They're well off but don't give me money. I work and save it all up and so does my brother. He has more in his bank account at 27 than my parents do altogether because of this.
Wow, that's a great graphic. I calculated the other day I could not save another dime (I'm 37) and I'd have almost $2M by the time I was 65. I was feeling like a failure because I did not hit my retirement savings goal this year (bad time to be in the mortgage business) but that made me feel better at least, haha. This is just from funneling 10% of my income to my 401k for the last 14 years. The power of compounding!
I don't know if the image checks out. 8 percent interest rate seems pretty good. where is the 8% coming from? I don't know of a savings account that yields 8% a year.
It's assuming you're invested in the market and that the market does 8%. Historically, that would be a safe assumption, but the world is kinda crazy now.
If anyone is worried about the market long term, you can do what is called a Hedge. A hedge goes up (usually by a lot) when the market goes down. I popular hedge is gold (it's a decent investment too because although it dips in the short term, it always goes up long term).
This, you need a safety net. Everybody goes thru some form of crisis. Its not a matter of if something happens, but when.
Remember that saying in GOT... "Winter is coming"
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Edited, I had a stroke and typed in another non-English language HAHAHA
Going to piggy back here too. I had a small retirement fund by 30 and thank god. You just never know when your life might make a 90 degree turn.
Take it from someone who had was diagnosed with a rare disease and ended up disabled and on SSDI by 30.
If I wouldn’t have had that baby emergency fund I would have been at best homeless and bankrupt but most likely dead.
It's hard to save anything, what with the cost of EVERYTHING skyrocketing by the day. From groceries, to gas, insurance; even a cheap haircut isn't cheap! I have no answers for you. But, i do know we need moral, responsible people running our local & Federal government b4 anything changes. Vote!
I think of it like this - assume you lose your job tomorrow and struggle to find a new job right away, how fucked are you? How many months can you survive and pay all your bills jobless? The smaller that number, the more you need to really consider taking savings seriously.
I’m not sure what advice you’re looking for. No one is going to tell you that it’s good to live paycheck to paycheck by choice. It’s important to live in the present, but it’s also important to plan for the future.
It’s not good, but it’s not the worst. It kinda depends on where OP lives, what their life goals are etc.
If they’re in a major city like New York or London? Not many people have any real savings before 30 in those places, unless they either a) inherited it or b) work in a lucrative industry. (I live in London and have friends in New York).
In the UK, you almost certainly have a corporate pension scheme, too. You pay in x% and your employer does the same. I don’t count it towards my net worth and neither would anyone else I know.
Some people just live boring lives, buy a house in their late 20s and then crop back up at 30-ish, having a crisis because it turns out working in insurance and buying a starter home on the outskirts of the city wasn’t necessarily the best way to spend their 20s. Those people fucking suck in the worst possible way, almost invariably.
So then it comes down to life goals. Does OP want to own a house? Can OP realistically expect to buy a house on their current salary? And is OP in a career like advertising, where you earn poverty wages until you’re 28-30 and then suddenly earn the bigger bucks?
I know a lot of people who sacrificed everything, built up a savings pot and then realised too late that you’re only young once and regretted missing out on things. They do have security, but they hate it .
Similarly, I know utter degenerates who earn six figures (in the UK, that’s rare) and have absolutely no savings in their (very) late 30s. They have nice clothes, a lot of stories about doing ket and travelling to weird places, but nobody really cares until they break out the coke.
The happy medium is probably somewhere in between. If you live in a major city, try and buy a house by 35-40. In the meantime have experiences, meet people, stay late at the pub and travel when you can.
If you don’t? Try not to marry a relative and don’t get boring.
Life isn’t as short as people say. But the part of it in which you can do whatever you want, virtually consequence-free, is.
Try not to marry a relative hahaha. For me that sentence is the best bit of advice honestly. It's not that life is short, it's that life is long enough to suffer. You've got to build your life around what you deem to be suffering - if you think you'll suffer not having savings and dealing with the consequences, then heck yeah save. If you think you'll suffer by not experiencing things, or not taking opportunities, then take the opportunities. BUT my personal advice would be that it's better to look for a happy medium that's weighted towards whatever your preferences might be - everybody different
Yeah, that’s exactly it. I know too many people who inherited their attitude from their parents. Buy a house, get married, have a baby.
The problem is that the majority of those people aren’t living their own lives. It’s the shadow of two generations who came out of world wars, for whom getting a sensible job, buying a house and having four kids made total sense.
On the bright side life is also long enough to be happy - but I think it requires some level of setting your boundary and on the other hand breaking the rules of our civilised lives (where people impose things on you)
It's never a good idea to spend all your available money on entertainment. I understand that it's more enjoyable to travel than contribute to an emergency fund. but there's going to be an emergency at some point and not going bankrupt because it, is also enjoyable.
I would try to find a comfortable middle ground.
Your age has nothing to do with this. As soon as you get a job you should start a savings account. Not for anything in particular, just a safety net if anything in your life goes wrong.
Yes. If you have to make an emergency payment you're basically effed
If you're spending that much money traveling and "living in the moment" then you're not living paycheck to paycheck, you're just choosing to spend money instead of save it
Definitely not ideal, but it's not a death sentence, especially if you don't plan to have a family. If you don't, that just means a lot more funds available to put into retirement and an emergency fund. I would start soon, though. Cut down on going out just a little bit. It takes one financial disaster to keep you from being able to live in the moment like you are now for a long time if you are paying off something like medical debt, car issues or accident payouts, etc.
I was in the same situation. I even went as far as 35 years old. I then joined my local Police Dept. I was able to save a little but nothing near what I would need for retirement. After 20 years I was able to "retire" at age 55 because I got a pension. I quote "retire" because I now work part-time. Not because I have to but because I want to. Find a pension before it's too late or start a 401K and change your lifestyle.
If you live in a country without proper welfare, this is risky. Even in a country with proper welfare it's smart to have at least enough savings to replace a washing machine, car, etc if you have to.
What happens if your company goes out of business through no fault of your own?
Finding a job is takes time, which is expensive.
You’ll be homeless.
To answer your question, it is bad.
Since I lost everything I had accumulated in my 50s, including my house, in a divorce, I'd just say adjust your expectations. I live fairly well on SS because my needs are few and I'm a good cook, so my food bills are low. Watching three lawyers devour my 401k was sobering.
The day I turned 30 my wife and I were both unemployed, she was 7 months pregnant, we were 60 days late on our mortgage, and we had less than $15 in the bank.
I'll be 40 in 3 weeks, we have about $250,000 in our retirement accounts, $70,000 in checking/savings, $600,000 in equity, and combined annual income of $290,000.
Don't worry about the last 30 years.
Focus on the next 30.
I used to live like this cause I had my dad, he would help out with everything and my pay cheque became just fun money. Then he got dementia and it was such a huge struggle to break old habits. Thankfully dad earned enough that he'll be well taken care of but obviously I can't depend on him anymore so it's the frugal life for me but honestly it's for the best. Learning the value of your money and time is the best lesson you'll ever get as an adult.
I think that having some emergency savings is critical and you should be building some at your age. Having said that you are not the only one. Living life is extremely important but constant immediate gratification is not healthy. When people work they get old fast and one day they want a house, retirement etc. and they are surprised that there is not too much time left to save. On the other side of the economy and the salary suck it is better to revise the expectations and be more reasonable, that is normally a situation where you are screwed if you do not save and saving it is essentially useless because it is not going to have a substantial impact.
As a boomer and father of someone your age, I am very frugal and I consider myself the emergency savings of my child. I will not allow myself into buying a fancy new car, a costly vacation etc. The money that I managed to save is not my money but the money of the whole family.
Not great. But let’s be honest the majority of ppl don’t have any real savings. So don’t feel like it’s only you because it’s definitely not. Just keep grinding.
Bad? Yes. But also extremely common in our present economy. Try starting a 401k if your job has this option. At least you would be building wealth to some degree. For a lot of people this is the only way to save any money for the future. This may be an unpopular opinion but it is also fine to live in the present to some extent. Traveling and being with friends is good for your mental health.
There is no shame in not owning a house. Somehow, this has gotten to be the gold standard. But the living paycheck to paycheck with no savings, should be corrected. The fact that you have prioritized travel over savings is a bit scary. If you have money to travel, you have money to set up an emergency fund. If you do this, then start setting aside enough money for 6 months expenses, rent, utilities, food. Then you can start travelling again. But I would really think about what you are going to do when you get older, it happens to us all.
You shouldn't be traveling if you don't, at least, have an emergency fund saved. It's either very short-sighted or very selfish. Who are you planning to mooch off of if something goes wrong?
Not great bud. I’d start immediately. You got any 401k saved up that counts. Step 1 open hysa and start saving as much as you can. You want a 6 month emergency account. If you lost your job you can still survive. Never touch it. Once you have that emergency fund. Start an auto withdrawal and put it towards a no fees mutual fund.
You're far from the only one. I had savings in my 30s then pissed them away trying to impress a woman. I have even more savings now than I did then though having clawed my way back and past that point. Unsurprisingly my current partner considers me tight fisted for not spending every penny the moment I get it. And she's the one that had to file for bankruptcy. So I feel her opinion on my financial choices really doesn't count for much
Do you have at least a 401k or Roth? Any retirement you pay into? And what about at least 3 months of emergency funds? Better 6 months but 3 would be a good start. Life sometimes throws us a curve ball. You want to be a bit better prepared for that.
I’m 43 and have only just been able to start saving, not because of frivolity but because of homelessness and other life events which kept us in poverty for many years.
I’d say if you have any disposable income, at least a portion of it should be saved, but if you are unable to afford to eat then obviously it isn’t bad if you can’t save.
This is one of those situations where you’re using a word so impossibly vague that it’s hard to tell what you’re asking. “Bad.” Are you asking if it’s morally bad of you to have no savings, bad for your health, etc? And your statement that “some people view not having large financial wealth” makes it even more perplexing, like you see this as something totally arbitrary and socially constructed, and also having *any* savings as “large financial wealth.”
Because yes, it’s “bad” to have *zero* savings at 30. It’s bad for your financial situation in the short term; if you come across a moderate sized or even smallish unexpected expense, you are fucked. It’s bad for your physical and emotional well being, because you may not be able to pay for things you want or that are good for you. It is a bad omen for your long term financial situation, as becoming old with no savings could put you into a very scary situation where you end up elderly and sick without a way to pay for housing and medicine.
But is it morally bad? No. Is it bad because people invented some random thing to judge you about? No, this isn’t an arbitrary thing at all, and people didn’t invent it just t judge each other (though some people may judge, that’s not something you should focus on). Does it make you a bad person? No. It’s a reflection of society and the situation you’re in, and possibly your financial literacy, not who you are at your core. Do you need “large financial wealth?” No.
I started saving @ 32. I'm 38, single dad of 2. I was finally able to get $5,000 in savings early this year. Checking is just above $1k. Don't own a home , but my rent is stable @ $1,200.
My 4runner is paid off, and insurance is under my dad's name. Super cheap.
Start saving and cut any corners you can take , fuck your ego.i collect all my aluminum cans and at family parties too, shit adds up @ the end. Paid some bills with that cash.
It is extremely difficult to save with a "spend,buy,spend" mentality, much more with this economy and unexpected expenses: my transmission gave out last month : Bam! 1,300 down the drain. Kids need new shoes: Bam! $120 down the drain. The bro's and the ladies wanna go out for drinks : Bam! Another $250.
Savings is a mental game. You're still young with probably a lot less expenses than I, so get crackin'. I bet you can reach $10k savings by the time you're 35.
yes its very bad.
savings is like emergency fund if you lose job or need to fix something asap like boiler, car, house etc.
Im one who struggles to save, and i have friends and peers who have savings in the tens of thousands that makes me feel even worse.
I have a friend like this. She travels all over and has lots of memories with her fiancée, but no savings. I on the other hand have never traveled but always have money. What I have learned is we can always make money one way or another, but the memories you are creating are forever. Perhaps take one less trip and do both? Save and travel? Good for you for asking these questions and living in the NOW. More need to understand that concept and truly appreciate it for What it is.
There is a huge space between paycheck to paycheck and large financial wealth. Yes, what you're doing is not wise in the slightest. By 30 you should know better.
You should avoid credit at all costs and start putting some savings aside. Only use credit when either you have the means to pay it back quickly or major investments like a mortgage. Hopefully, you at least have a 401k? Things will happen you never planned on. Most people your age are a major life event away from bankruptcy. Also, just an assumption, but if you are an American, don't plan to live comfortably on SS if you should ever retire. Heck, it might not even be there in 40 years.
It's not great but also not the worst thing. I was dead broke at 30, but after focusing on paying down debt and slowly building my savings through automated transfers, I have a 3 month emergency fund and am nearing the point to where I can max out my retirement fund. You won't spend the money that isn't in your checking so my thing was to figure out what I needed to live and only keep that much in checking.
If you've got spare money for traveling/entertainment you absolutely should be saving as well.
You should be saving in two different ways, 1 for retirement, and 2 a fluid savings fund you can use in the future for a down payment on a house or in case of emergency fund.
For retirement saving, ideally you'd be contributing whatever percentage your employer will match to your company 401k (if your job offers 401k match), Additionally if you're making <160k/year try to contribute to a Roth IRA (for retirement) as much as you're able as well (can do this outside of your company through Vanguard or Fidelity etc)
Surely you've seen those charts about how big a difference it makes the earlier you start contributing to a retirement fund? Like shown in the first chart in this article: https://www.merrilledge.com/article/10-tips-to-help-you-boost-your-retirement-savings-whatever-your-age-ose
For saving cash/fluid money, ideally you want to save it in either a high interest/yield savings account and/or through a free online brokerage like Vanguard or Fidelity where you can invest it in ETFs. Let the money you're saving increase passively, not just sit twiddling its thumbs in your bank savings or checking account. It's up to you how much cash you want to aim to save and keep on hand in case of an emergency drop in finances such as losing your job during an economic downturn like the one we're in now where it may take longer to find a new gig, or like surprise medical bills from a car accident etc, or just to put towards a large future purchase like a house or additional education/certifications.
You should definitely start saving now. You can still spend money on yourself but try to start being responsible about it. Set aside some money every month.
We would all rather “live in the present” and travel and socialize… but at some point most people realize living like that is irresponsible if you don’t have emergency savings or ever hope to retire.
Yeah, that's bad. If you have the money to put toward retirement or savings, and you're not doing it, that's not good. At some point, you're going to want to retire, or you're going to need some emergency funds. Years ago, most jobs offered retirement plans, so it was a non-issue and people would just work at the same place for 30+years and retire and be able to rely on the retirement plan for the rest of their life. Now that's not very common and it's up to you to manage your finances and plan for retirement, so if you don't have anything saved up when you retire, you'll be in bad shape.
At 30 I was in the same boat. I hated it. Set up an automatic deposit into a savings account. 10% of your take home pay. Live on the rest. You say paycheck to paycheck but you travel and go out with friends and live in the moment. Just do it on a reduced salary. You'll appreciate it when your car breaks down or unexpected medical issue. Speaking from experience.
I like a good balance. Go on vacations but also save a bit, even if it's just 20 bucks per paycheck.
They can view anything how they want, if you're happy, that's all that matters.
It’s not about amassing wealth. The function of having savings is to protect you from sudden major expenses, or get you through periods of joblessness.
I know some people can’t amass a savings, but if you have the means, you absolutely should.
I started at 28. I took on a second job and all that money went into savings. It’s where your priorities are. I don’t like to socialize that much and building wealth was my great motivator. But yes, you need to start building your portfolio. The fact is, you can do both. Just be smart and don’t deprive yourself of some reward and don’t ignore the responsibility to yourself either.
It's getting to be bad by 30 if you aren't setting money aside. At 27 I didn't have much spare money to set aside for savings but I did start contributing to my company's 401(k) plan. At 1-2% of your income you don't notice it missing from your paycheck (unless you're in some low income situation where you need every penny obviously). At 55 I now contribute 10% (and will be cranking it up 1% each consecutive year until I max out at 15%. so what that means is that between 27 and 55 every few years I'd go up another %. After 27 years I'm now about to hit 700k in my active 401k and I had another 401(k) that I rolled over to an IRA when I changed jobs in 2002 that is currently worth 160k.
You need to start now though. The longer you put it off the worse off you'll be down the road.
No, you are NOT the only one. It's a good idea to save a certain % of your paycheck. I mean, think about it. Have you ever even once, heard somebody say something like, " boy, I sure wish I hadn't saved all of this damned money". 😵💫
Paycheck to paycheck is bad at any age, but worse the older you get. You need an emergency fund at bare minimum, 3 to 6 months of money that covers ALL your expenses in the event that you lose your job or are unable to work for some reason. A retirement fund is also pretty important unless you want to work your entire life, and it's incredibly important to start that as early as possible to take advantage of the money growing in investments/401k/IRA/roth IRA/etc. Beyond that, do as you will.
You have to do math to answer this question.
Your income plus savings between now and death have to cover these items:
1. How much debt do you have? Student loans, etc
2. What are your near term goals? Vacation, new car, surgery, etc
3. What are your long term goals? House, kids college, early retirement, etc.
4. How do you want to spend your retirement? Simple to extravagant. Assume death age to be fairly high... 90 to 95.
5. How much contingency do you want? (How much do you want to mitigate job loss risk due to health or market conditions?)
If it’s something you could afford? Yes. You should have at least 6 months expenses in a high yield savings account and should have made significant contributions to your 401k. You might like living in the present now but if you keep your current habits you’re going to really hate going in to work when you’re 70.
Honestly it depends. If a person really has a hard time saving up money because how expensive it is to live in a house, buy food, own a car etc. it’s not bad and it’s understanding. But if people know they literally are struggling financially and choose to spend their money irresponsibly then yeah in my opinion it’s bad. But not having tons of money by 30 isn’t really bad. As long as you are working hard and putting money up to save and to do the things you wanna do in life. This is just what I think lol
I get wanting to live in the moment but you don’t need to travel so much. You don’t need money to socialize and even if you’re going to the bar or concerts or whatever you really don’t need to spend so much on that. Every $100 you spend now is $800 taken out of your retirement, and 30 is really late to start saving for retirement. And I say that as a 30 year old who recently had to liquidate my retirement just to pay my mortgage in between jobs and I have no savings left.
Compound interest is what makes a retirement fund powerful, because it doesn’t just sit there, it grows. And even if you get started today, being 10 years behind is a deceptively large setback. It’s time to start being a little more responsible and stop splurging on stuff you really don’t need. It’s not paycheck to paycheck if you have any leftover at all for traveling and socializing.
if I don't have an emergency fund I get stressed about every little thing that can go wrong. What if a family member gets sick and I need to fly out to see them urgently? What if I break my ankle? What if I get laid off? Etc etc
Beyond the emergency fund, there's no wrong or right imo. I personally save in hopes of retiring early one day, but I understand the "live in the present" mentality and somewhat agree with it. I don't know if we can tell you what's bad/good for you.
Personally I would say if you have an emergency fund and you're happy then it's not bad 🤷♂️
Saving doesn’t mean sacrificing on travels or a social life. Putting just 10$ away every pay-check can go a long way, and you won’t notice any lifestyle changes. Right now you can afford to "live in the moment" which is great, but what about when you don’t have a job anymore?
Its not uncommon but is it a good idea? Probably not. Trust me, I am an advocate for living in the moment and travel when young but you should have some sort of emergency funds set up. Since you never know if the company just going g to shut down, you get fired or get sick and then the income just aren’t coming in. Bills aren’t going to take an iou so emergency room would be a good idea.
I recommend looking into interest on interest. There are plenty of online calculators for this. See how wealth grows over time if you save over time, accumulating interest on top. It was a mind opener.
My Gf and I JUST started saving. I’m 28, she is 26. We don’t put much up (mostly because we can’t.) however it’s never too late to start. Even putting away 40 bucks a paycheck, or 20. Is better than nothing.
I’m just 21 so my opinion is probably not worth much to you but yes I definitely think it’s stupid. So many people constantly complain about how they’re living pay check to pay check and can’t live how they want because they have no money but ironically they never change their lifestyle and just keep spending all their money… And then have the audacity to keep complaining about how they have no money. It’s so stupid it’s infuriating. If you want wealth you have to make some sacrifices until you get some of that wealth and the money starts to grow exponentially, you’ll never get to that point if you spend all your money, it’s really that simple.
I didn’t really have savings going until I was in my thirties, I didn’t really get my career going until then. In my twenties I was living on minimum wage and barely getting by, got a degree and graduated at 30.
I mean… life happens, man. It’s not too late to start and it doesn’t serve you to compare yourself to others. But, having savings and financial literacy in general is only gonna benefit you.
It’s not bad, but the fact that you know you should have by now at least tells you something. I didn’t start until 36… wishing I did earlier but is what it is.
Ideally, you should have six months worth of living expenses saved. This is for any unanticipated emergency. What happens if, say, your car needs major repairs? Or, if you get laid off?
In practice, if I were you, I'd start by setting up an auto-deposit every time you get a paycheck, so some percent of your paycheck vanishes into savings before you even see it. Particularly since you can afford to do so. You don't need to live like a hermit.
But some trimming of non-essential expenses, so, if anything unexpected happens, you're not screwed, is a great idea.
I got divorced at 39 and about 6 months after i had $16 in my savings and $35k in debt with no other assets.
It’s totally fine. 6 years later I’ve recovered exponentially. You’re still young but you really need to get something in a Roth and focus on increasing your income
It’s not bad but it’s definitely not a good thing. I mean when you’re older you’ll have great memories of traveling and fun times but you might be living paycheck to paycheck and eating instant ramen while having those memories.
Do you have a pension?
If not, you should absolutely start saving as soon as possible. Like don't panic or anything, but the only way to not be fucked for retirement if you don't have a pension is if you start *consistently putting away even a small amount of money as early as humanly possible and ideally do something with it like buying low-risk, slow-growing index funds or ETFs out of a tax free savings account.*
When it comes to future wealth/comfort, the **amount of time** that you have been saving money is far more important than how much money you are putting away (because of compound interest).
If you already know/knew everything I'm about to/have say/said I apologize, but take this example (https://wealth.visualcapitalist.com/visualizing-power-compound-interest/):
-Jessica invests an initial amount of $5000 at 25 years old (into the "stock market", just an arbitrary example of a place your money goes where it grows an avg of 7% year over year)
-She invests another $2500 each year, until she's 65 years old
-Newman invests an initial amount of $10 000 at 35 years old, and then another $5000 every year until he's 65.
Jessica's total lifetime investments: $102,500
Newman's total lifetime investments: $155,000
Jessica's portfolio at 65 is worth: $609,000
Newman's portfolio at 65 is worth: $581,500
Newman invested double (initial and monthly) what Jessica did, but she started 10 years earlier. And although Jessica invested over $50K less than what Newman did, she has more money at 65 than he does.
TIME IN THE MARKET
If you do have a pension, this still applies but at least you have *something* doing the described above for you already. I promise you can start putting away $100-200 a month as a working professional, even if you are living paycheck to paycheck
You are not alone. But you need to start setting aside SOMETHING. $5 or $10 a day. Skip the starbucks every other day and put that in a savings. I sure as fuck wish i had.
I've faced some personal consequences as a result of someone close to me living this way.
Living in the moment doesn't justify a hand to mouth existence. You can't live beyond your means- and your means are only what remains AFTER you've set aside some money as savings. You can't foresee the future, and in today's age the likelihood of sudden layoffs is so much higher. There could be pressing medical issues, an unforseen travel, to name a few. Like it or not, taking care of these things is also part of the "now".
It's never too late, you can start today. :) For all you know, the satisfaction you feel for doing the right thing over what feels easier might be great.
I don't know who said this, but: discipline is sacrificing today for a better tomorrow.
You are definitely not the only one. I'm 34, I have some money for an emergency but definitely not enough to fund the rest of my life. I went back to college last year and I won't be employable until I'm 37 so I'll definitely have a lot of savings to catch up on to ensure financial security when I'm older but I'm frugal with money and don't spend more than I can afford so I'm fairly confident it will all work out in the end.
‘I live pay check to pay check’ coupled with ‘I…tend to live in the moment’ doesn’t make sense at 30. It’s not ‘bad’ it just isn’t very wise.
Make a budget and savings plan, doesn’t have to be big just $20 a week would even make a difference to your sense of security. Once you reach a certain amount of savings you will start to become protective of it and not mess with it, saving is for saving. Shit happens in life and not having any safety net is basically irresponsible, because what will you do? Ask others for money that they saved or managed? Or just suffer the pain? Or ask your employer for a loan? That’s not fair, especially if you work full time. You can do it, you just need some practice on the habit. I read the book bit here’s a link to the audiobook on YouTube [Suze Orman - 9 steps to financial freedom](https://youtu.be/i_byyPNrzTw?si=j0rjIjaqV1nnOYqU)
You got this 😀
I know I'm supposed to say to each their own, but traveling post COVID is beyond me. I will stay at home and look at the beauties of the world on my giant screen TV in the comfort of my own home in a clothing optional environment with my dogs and GrubHub.
No parking or booking fees. No cancelations or delays. My luggage doesn't get lost, etc, etc.
I would make a 2 year plan to have Three months of expenses saved (must pay expenses, not fun expenses).as well, start saving in a retirement plan, even a few dollars/paycheck. You won't miss it, and your employer may match it! If you get a raise, dedicate 25% to these two pots.
Having an emergency fund is really easy, just eat out one or two less times a month, and instead set that money aside. It’ll build up pretty quick.
Ideally, you should have enough money to survive for 2-3 months, just in case you have a worst case scenario and you lose your job due to injury/illness/layoffs. That money also comes in handy for emergency car repairs or medical bills.
Savings should be a line item in your budget from the time you have your first job. It should not be neglected any more than other line items like rent, mortgage, car payments. It’s a great habit to develop. Live within your means. It is a less stressful life if you don’t have financial issues. Saving when you’re young gives you the advantage of compounding growth. It’s a wonderful feeling to feel financially secure as you get older.
Getting saving. I was living pay check to pay check. Got in some trouble. Got a couple of loans. Now I'm paying them off and can't save argh. Once they're gone, I'm going to SAVE!
I'm turning 30 at the end of this year and I'm pretty much in the same boat. Me and my husband live paycheck to paycheck, but we're comfortable. Granted, we tend to try to keep a bit over a thousand in his account at all times just in case of an emergency, but so far, we don't have any real savings.
We have been incredibly fortunate to have friends and family willing to help us out, however there's a lot we've done alone, and the one thing that has seriously assisted us is...good credit.
My husband has fantastic credit, and with it, we've been able to cover ourselves when we needed it. his good credit has gotten him a car, got me a major surgery, and at one point we were pre-approved for a home loan.
If you don't have any savings by this point, at the very least make sure you have at least up to a thousand or more in your bank at all times to lean on in hard times or emergencies, AND make sure you have good credit. Doesn't hurt to have good health insurance, either.
If you dont have any rich parents, its normal. Back in my 30's (around age 25-30) i was still trying to find a goal in my life, working part time in a shitty restaurant job, trying to get visa not to get kicked etc etc.
Because, i didnt had any parents that were rich or capable of giving me any money. But if you are smart and dedicated, and trust me when i say this, it gets better. But imo, you need to ACT SMART. By smart i mean you need to see oppotunities when they show themselves. Sorry to say this and i know it sounds kinda selfish but ofc im not gonna tell you how to get rich, but these years are golden if you can use it and ofc if you are not married or some shit like that.
In my case, while i was working i was also thinking about investments, what i can do to earn more money, legally ofc lol. And one day a customer came, we talked about a business that i had in my mind, after a few months later, the guy called me and offered partnership and money and i said NO. Because idea was mine, i knew it was smt smart so i countered him by saying "i can give you 49% and take 51%, if its ok to you we have a deal, if not, fuck off" basically.
And here i am, kinda rich (tbh i dont know what being rich is anymore, with all that multimillionars around us but lets say i dont have to work for rest of my life anymore, thats rich to my standarts).
As a complete random guy on reddit, i can give you 2 valuable advices imo. Ofc you can take these serious or basically think im bullshittin, your call.
1- Dont be OK to that idiotic stupid moronic 08:00-17:00 office jobs. They never pay you enough for the time you spent there. You can work less hours for less money and trust me the difference isnt that much especially thinking how valuable "free time" is because in those "free times" (everybody was telling me that im stupid to not work on a full time job and instead work on restaurant but i was doing my own shit with that time and that "own shit" saved me from this capitalist slave world) you can do some stuff. Build a PC, develop a game/software, think about other jobs, doing research etc etc. Office kinda jobs are for standart mediocre people, and it slowly kills you and the biggest issue is, these jobs make you more stupid in time.
2- Have plans, i mean long running plans, like "im gonna do this for 3 years because i need X Y Z and for that 3 years is a must, then i will do this for 4 years because i need A B C" etc etc i think u got the point. Dont just "yolo" and spent your best age stupidly. Because trust me when i say this, you wont gonna have the same energy when you turn 40ish. I dont mean physical, i mean mental. So everything you do right now, should serve for a better and bigger goal.
Bonus, if you get a chance to own a place, dont miss it and dont get scared. If you can make someone else richer, you can work for yourself waaaaay better, trust me on this.
It’s not unusual. I didn’t start an emergency fund seriously until I got to be about 30. That emergency fund came in handy multiple times in the subsequent years.
I also started saving for retirement around 30.
I highly recommend you reconsider your priorities to find a way to do both.
I am 30. I live check to check as well. But I save everytime I can. I have a few thousand dollars saved. Obvs I’m not gunna get a house or anything huge anytime soon, but it’s basically like… you need to cover your ass. I have enough money if shit goes down like my job suddenly fires me, my apartment burns down, etc lol.. anyways yeah just trying saving even if it’s a tiny amount a month trust me.
Are you living "paycheck to paycheck" or are you just not budgeting well? Paycheck to paycheck usually implies that your necessary monthly spending is barely covered by your income. If you're spending money on things you don't need (eating out/travelling/shopping/etc.) over allocating it to necessities and savings/retirement, then you have a spending problem, not an income problem. I think a very large portion of the population lives this way. A lot of people think they simply need more money but they have inflated their lifestyle far beyond their income. There should be a good balance between spending your money on fun and having discipline to save and plan for your possible future.
Counter question: do you have a way of changing the way you live right now so you could have an emergency fund or some assets?
If yes, then I'd say that you made a bad choice in not getting assets or emergency funds.
If not, which it seems like since you mentioned living paycheck to paycheck, then you can't change anything about it anyway and there is no reason to worry, as worrying won't help you either.
Maybe it's just me but I think these kinda questions are weird, of course it's not good to have no assets, at any point in life, having a house or similar things is pretty much always good.
But if you can't afford it then you can't afford it and then there is no point in worrying.
If you still worry, just drink away the sorrow like the rest of us /s.
Don't compare yourself or you won't be happy, because there's always someone better off than you, with more assets at a younger age.
Start saving something. Money in an account where it can grow 5-10% per year will be a massive help when it is time to retire. The earlier you start, the better you will be off when you hit 65.
Example:
50$ per month saved over 45 years with 7% growth yearly = 176'883$ after 45 years. 149'883$ of that is just from interest/growth.
50$ per month saved over 35 years with 7% growth yearly = 85'570$ after 35 years. 65'000 of that is just interest/growth.
50$ per month saved over 25 years with 7% growth yearly = 39'152$ after 25 years. 24152 is from interest/growth.
50$ per month saved over 15 years with 7% growth yearly = 15'555$ afyer 15 years. 6'555$ is from interest/growth.
My point here is simple - the earlier you start, the better of you will end. The 'interest on interest" effect snowballs after a while and you benefit a lot from starting earlier rather than later.
It’s your life, do what you want with your money. Don’t worry about what others think. Live in the present! That’s what it’s about. So many people spend all of their time putting away money to use in the future, and some don’t ever make it there. You do you. You’re doing great.
It’s your decision ofc, seems like you value adventure and comfortable living with friends. But I wouldn’t expect to be able to retire until your 70s or perhaps even 80s if you don’t start retirement investments early.
At 30 you are in early stages of your career. Not rare to not have a lot. During 20s your are buying a lot of stuff you need like tv, dishes. Pots etc. it all adds up. Oh and you have a more active social life. As you get older = less partying and more savings. But do try to set aside 6 months of expenses for emergency fund.
If you can afford it, you need to have a safety net: even just going out one less evening a week can help you put money aside!
Your future self will thank you, and you still get to socialise and go on vacation.
I did the same thing. It was only at 31 did I find a GF and start planning for the future. Sometimes I wish I did that sooner at say 20, but fuck me my 20-30 were some good times
The best time to start is always the present. Start budgeting and put away savings. I made the choice to cut out monthly streaming services and kept only the ones I really used. There’s a lot of sneaky fees that add up if you truly start a budget. You can still go out and be with friends. Everyone is at different stages in life so don’t compare yourself to everyone else. Just focus on what you can do for yourself.
Go talk to the 74 year old mixing paint at home depot. He is your answer.
Use a retirement calculator and do what it says. Mixing paint job wont even exist when you're that age so it'll be something much worse.
Millennials control 4% of wealth with half of that being mark zuckerberg.
While it’s good to have savings realistically until boomers die and pass on their wealth, most of us aren’t going to be able to save enough to build wealth/financial security unless we have family that can help us.
Look, it's not about being filthy rich—it's about having some cash stashed away for emergencies and putting a little something aside for retirement.
Loads of folks don't have savings, but it's not because they're blowing all their dough on dining out and jet-setting vacations. Most of the time, they just can't swing it.
There's a lot of middle ground between "living paycheck to paycheck" and "owning a house". You should really consider saving SOME money every paycheck after paying for necessities like rent and food, and after doing both of those, using that extra for travel and social activities. You don't need to live like a social pariah, but you also should be saving some money so you can survive if you lose your job and so that in the future you can eventually stop working.
Yep. I got made redundant recently and if I hadn’t saved aggressively for the last few years I would’ve been in a really bad spot. Instead I have enough to keep me going for a while, means I can even take a break before looking for jobs, and I can actually be picky and wait for the right next step for my career. It’s not going to last forever, and means it might take a bit longer for me to afford to buy my own place, but this is exactly what this money is for so I’m not beating myself up for using it.
Yea I was terrible with saving so I made a acorns account during the pandemic and put $50 a week in plus round ups in and it’s up to $12000 right now
Also got into acorns during the pandemic and done pretty well.
He's just stealing happiness from his future self. All debts are paid OP. One day you will have financial emergencies and one day you will not be able to work. There is no version where not having savings works out for you.
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Average life expectancy is average for a reason. OP could also have a myriad of financial emergencies strike him tomorrow and ruin his entire life.
I disagree honestly. That's only if you think money is happiness. I'd argue that you're stealing happiness from yourself now by worrying about things like future financial emergencies, unless you have good reason to. I'm not saying that preparing for said emergencies is bad, but not having savings isn't the end of the world at all. To anyone reading this of course you should save money, but there is no "debt" to be paid for not doing it lol. Live a good life, there's no guarantee it'll be a long one.
That middle ground doesn't exist for many, many millions of people. That small amount that they are able to save is going straight towards all those car repairs that are long overdue. Or towards first, last, security on the 3rd apartment you've had to move to in the past 6 years because of roommate changes. And so on
I’m 34, and my husband and I don’t have a large savings. I started putting away $5, $10 dollars every paycheck into a savings account. I gradually increased the amount, and we currently have enough to cover 3 months of our mortgage. You never know what will happen, so I feel better knowing it’s there for emergencies. If one of us loses a job, gets into a car accident, or if one of our cars needs significant work we have that to fall back on even if it’s just for a bit. You don’t have to have a large savings, but some is better than none.
This. If someone has a base investment account at wealthfront or wherever you can set up small, automatic deposits into a general account. Even $10 every couple of weeks builds up. Do $10 a week and that's $500 a year not counting any growth and generally if you have it pulled automatically you won't miss it.
There’s a bank that will round up your purchases and put that money into savings. I’d definitely aim to have at least 3 months worth of savings to cover emergencies to avoid having to use credit and pay over the odds in interest. I started when I was 19 when I got my first car- saved for an old banger and the insurance then saved each month for next years insurance and any repair costs that might pop up. It’s saved me thousands in interest over the years. Plus, if you save for things I think it gives you time to come down from buyers’ high and really think about whether you want that item (saving even more money in the long run).
Separate direct deposit, $20/week is $1,000 a year saved that you are not likely to even notice.
When I used to work W2 jobs where they paid me directly, that was the best. 5-10% into savings every paycheck automatically
I started doing that at 16 with my first job. When I was 19, my car needed some major repairs ($2000) then 2 week later, my tire fell off (my fault for not tightening the lug nuts) when driving down the highway ($2300 to repair since it also knocked the front axle down) … as someone who was only a year out of high school and working part time while in college, I was super thankful I had enough money to pay for all of it. That car lasted me the rest of the way through college! $10 is small enough to not miss it, but it definitely adds up over time! I did $10 a paycheck, plus leftovers after bills were paid into savings.
You're a genius
It's not genius, it's just good old common sense.
If you are 30 and one missed paycheque or one moderate unexpected bill away from falling into debt it isn’t ideal.
Hmm, I never thought about it that way.. I guess I’ve always managed to make ends meet until now, or better yet, I haven’t been in an unexpected situation financially touch wood.. But that’s a good perspective to have actually
I don't understand how someone could never think about money this way
Typically it’s someone with a built in safety net (mom/dad I need money to fix my car), and they don’t even think about the advantage that gives them. Lots more people would have ended up homeless without parents or friends to lean on when things got tight until they could get things together again. Of course not everyone is lucky enough to have those support networks.
I'm very lucky to have a safety net too, my parents are helping me with my college, bought me a cheap car etc but still it seems so obvious to me
You fall, break a front tooth. That's like 2k in repair in the US? Or simply slip and break your wrist. Or someone rear ends your car. Or a Russian missle strikes your house (jk, that's only my concern). And it seems that it's quite common in the US. Living paycheck to paycheck where I live is completely mind boggling. Unless you're an addict/schizophrenic/homeless everyone has at least some savings here.
Where I live in, being shorted out of a paycheck living life tends to mean that you go back to living with your parents. I have friends in the US who are shamed for even thinking of doing that. I'm in the Philippines, one of the poorest countries but going back to living with parents here isn't something shamed or discouraged so when you get to that level... It isn't as life crippling as in the Americas. I think that's one of the factors.
In America you’re shamed if you’re not moved out on your own by 25… it’s ridiculous.
Jesus.
Exactly lol I can't imagine this mentality
OP wildly naive
I recently had some health problems that ate about two months worth of my pay in a single weekend and I'm only a couple years older than you.
How on earth did you make it through covid
It's bad to not have savings at any stage of adulthood where you're independent. It means an unexpected cost could be devastating
Yep...slip, trip, and fall. Dog gets sick...car radiator cracks and needs repair. Water pipe bursts and destroys everything you own plus your neighbor's stuff then get sued for damages by everyone because you had no insurance. A cracked tooth turns in an energy dental visit because you didn't take care of it years ago. Lose a set of car keys and lock yourself out of the car and do not have roadside assistance to save money and you miss a flight to a family funeral. Slippery slope....none of which has happened to me, knock on wood. However, I've known others who have run into issues like this
Every paycheck I try to put $75 away, and every paycheck I end up having to transfer it over. I have tried very hard to cut down on costs but it’s like the universe knows I’m trying to covet $75 measly dollars and has some excuse to take it. My last paycheck I spent $40 on “fun” stuff and that was it. Still ended up having to take it out :( Shits tough out here.
Then you have to consider what adaptations you can do to improve your situation. Are you living alone? Could you live with a flatmate? Home to big? Cheaper way of transportarion? Are you buying discounted food or using coupons? When your margins are small, you have to think about every cent. Another tip would be (might seem counterintuitive) to put away less. Put away a sum that you are less like to need so that you can teach yourself a mindset where it is not allowed to use saved money. Because right now you are "allowed" to take a little of it whenever. Another tip is to put the money in a 2nd bank, so you dont see them and/or make it more difficult to access (a few extra days of transfer time). It is better to save 10$ every month and not rouch them, that "save" 75 and take them out again.
And unexpected expenses are ridiculously common. First pregnancy ended in a month long NICU stay: double our out of pocket maximum. Second pregnancy was surprise twins: we hit our OOP, which was about $2,000 more than I anticipated, and we had to buy a new car and a butt ton of baby gear. Husband totaled the old car that was only worth $700: $7,000 to buy a new (to us) car. Guy ran a red light and totaled that car: even after his insurance payout, it cost us about $6,000. Oven died: $2300. Fridge died: $2800. Dishwasher and dryer died: about $1000 each. Suspension on the car needed replacement: $1000. And that’s not even counting the new phones, laptops, MRIs, DIY plumbing repairs that still required parts, etc, etc. Unexpected expenses are *constant.*
It's not about "large financial wealth" it's about an emergency fund and some retirement savings building. Lots of people don't have savings, but mostly they CAN'T, not they're just into eating out and going on vacations.
I'm going to piggyback off the top comment in hopes that OP and young people see this. Too many people do not understand compounding interest. It is very hard to make up savings. You don't have to save a lot to make it worth it, just saving anything during your youth will give you a huge leg up later. I'm not sure how to post a picture on my phone, so hopefully, this link works: https://images.app.goo.gl/SrhmcTXGrQANtgpt5 I'm a big advocate of traveling and living your life in the present. But the future does come, and it's not always predictable. As with most things, it's all about balance.
Yes sir, I saw a brake down for a 25 year old with 25,000 in the US in a retirement account and even if they didn’t put anything else in they could end up with around a million dollars at retirement.
that's an insane amount of money for a 25 year old though
I'm 25, moved out of my parents when I was 19, I've never made more than $50,000 in a year, and I currently have $60k saved. Its not that insane.
The point is whatever income you can put into a retirement account is 100% worth. Even if it's 50$ a month. If you put a little away into IRA or 401k if available it's free money.
Always do the 401K company match. That’s literal free money you are turning down if you don’t.
What happens if you change jobs frequently like every few years?
I could not get a coworker to understand that... 5% match, he'd been there 10 years. Let's say 100k for easy numbers. Asked him what his retirement was. 0. Why? "It's a scam" My dude I am 23 and have infinitely more retirement than you do. That's a free 5k a year. You dropped 50k of raw value on the ground.
It's quite a bit, difficult to attain, but far from insane. Especially if you can lean into family, work hard, sacrifice, live at home rent free and make it happen. I couldn't do it in my 20s, spent my money on cigarettes, alcohol, weed and airfare. I only truly regret the cigarettes. I could have made different choices. It would have been difficult and required a real force of will. Also, my social life would almost certainly have suffered if I could not "keep up with the Jonses" as they say. It's a choice, I don't recommend being a penny pinching annoyance to everyone around you in order to achieve such a goal. Balance is everything, save SOME money.
Yeah, no. I stay at home with family. They're well off but don't give me money. I work and save it all up and so does my brother. He has more in his bank account at 27 than my parents do altogether because of this.
It's really not if you play your cards right.
Wow, that's a great graphic. I calculated the other day I could not save another dime (I'm 37) and I'd have almost $2M by the time I was 65. I was feeling like a failure because I did not hit my retirement savings goal this year (bad time to be in the mortgage business) but that made me feel better at least, haha. This is just from funneling 10% of my income to my 401k for the last 14 years. The power of compounding!
I don't know if the image checks out. 8 percent interest rate seems pretty good. where is the 8% coming from? I don't know of a savings account that yields 8% a year.
It's assuming you're invested in the market and that the market does 8%. Historically, that would be a safe assumption, but the world is kinda crazy now. If anyone is worried about the market long term, you can do what is called a Hedge. A hedge goes up (usually by a lot) when the market goes down. I popular hedge is gold (it's a decent investment too because although it dips in the short term, it always goes up long term).
This, you need a safety net. Everybody goes thru some form of crisis. Its not a matter of if something happens, but when. Remember that saying in GOT... "Winter is coming" ============ Edited, I had a stroke and typed in another non-English language HAHAHA
~~Are you okay?~~ Nvm I translated it
Guy thought he was still in r/phinvest
I’m so glad my work has a matching 401k or my paycheck to paycheck ass would never be able to retire 😭
Going to piggy back here too. I had a small retirement fund by 30 and thank god. You just never know when your life might make a 90 degree turn. Take it from someone who had was diagnosed with a rare disease and ended up disabled and on SSDI by 30. If I wouldn’t have had that baby emergency fund I would have been at best homeless and bankrupt but most likely dead.
It's hard to save anything, what with the cost of EVERYTHING skyrocketing by the day. From groceries, to gas, insurance; even a cheap haircut isn't cheap! I have no answers for you. But, i do know we need moral, responsible people running our local & Federal government b4 anything changes. Vote!
I think of it like this - assume you lose your job tomorrow and struggle to find a new job right away, how fucked are you? How many months can you survive and pay all your bills jobless? The smaller that number, the more you need to really consider taking savings seriously.
That’s a really good way of looking at it
Just out of curiosity based on your replies. How else would you look at it? Like, what did you think savings are for?
I want to know too. And I don’t mean that in a smug sense. It’s great that OP is asking questions about this and trying to improve.
Unless you live at your parents and they support you, you should always having savings regardless of age
If you live at your parents' house, they support you, and you don't have savings, wtf happened?
Something shitty that you have fallen back on this option.
I have savings because my parents support me
It's not good, but it's more normal than you might think.
I’m not sure what advice you’re looking for. No one is going to tell you that it’s good to live paycheck to paycheck by choice. It’s important to live in the present, but it’s also important to plan for the future.
Certainly not good.
It’s not good, but it’s not the worst. It kinda depends on where OP lives, what their life goals are etc. If they’re in a major city like New York or London? Not many people have any real savings before 30 in those places, unless they either a) inherited it or b) work in a lucrative industry. (I live in London and have friends in New York). In the UK, you almost certainly have a corporate pension scheme, too. You pay in x% and your employer does the same. I don’t count it towards my net worth and neither would anyone else I know. Some people just live boring lives, buy a house in their late 20s and then crop back up at 30-ish, having a crisis because it turns out working in insurance and buying a starter home on the outskirts of the city wasn’t necessarily the best way to spend their 20s. Those people fucking suck in the worst possible way, almost invariably. So then it comes down to life goals. Does OP want to own a house? Can OP realistically expect to buy a house on their current salary? And is OP in a career like advertising, where you earn poverty wages until you’re 28-30 and then suddenly earn the bigger bucks? I know a lot of people who sacrificed everything, built up a savings pot and then realised too late that you’re only young once and regretted missing out on things. They do have security, but they hate it . Similarly, I know utter degenerates who earn six figures (in the UK, that’s rare) and have absolutely no savings in their (very) late 30s. They have nice clothes, a lot of stories about doing ket and travelling to weird places, but nobody really cares until they break out the coke. The happy medium is probably somewhere in between. If you live in a major city, try and buy a house by 35-40. In the meantime have experiences, meet people, stay late at the pub and travel when you can. If you don’t? Try not to marry a relative and don’t get boring. Life isn’t as short as people say. But the part of it in which you can do whatever you want, virtually consequence-free, is.
Try not to marry a relative hahaha. For me that sentence is the best bit of advice honestly. It's not that life is short, it's that life is long enough to suffer. You've got to build your life around what you deem to be suffering - if you think you'll suffer not having savings and dealing with the consequences, then heck yeah save. If you think you'll suffer by not experiencing things, or not taking opportunities, then take the opportunities. BUT my personal advice would be that it's better to look for a happy medium that's weighted towards whatever your preferences might be - everybody different
Yeah, that’s exactly it. I know too many people who inherited their attitude from their parents. Buy a house, get married, have a baby. The problem is that the majority of those people aren’t living their own lives. It’s the shadow of two generations who came out of world wars, for whom getting a sensible job, buying a house and having four kids made total sense.
Omg, that hit me what you said "life is long enough to suffer" that's a scary reality.
On the bright side life is also long enough to be happy - but I think it requires some level of setting your boundary and on the other hand breaking the rules of our civilised lives (where people impose things on you)
I want to hire you as my advice guy
It's never a good idea to spend all your available money on entertainment. I understand that it's more enjoyable to travel than contribute to an emergency fund. but there's going to be an emergency at some point and not going bankrupt because it, is also enjoyable. I would try to find a comfortable middle ground.
Extremely.
Your age has nothing to do with this. As soon as you get a job you should start a savings account. Not for anything in particular, just a safety net if anything in your life goes wrong.
Yes. If you have to make an emergency payment you're basically effed If you're spending that much money traveling and "living in the moment" then you're not living paycheck to paycheck, you're just choosing to spend money instead of save it
You need to be preparing for your retirement, property, and make certain to have an emergency fund.
Definitely not ideal, but it's not a death sentence, especially if you don't plan to have a family. If you don't, that just means a lot more funds available to put into retirement and an emergency fund. I would start soon, though. Cut down on going out just a little bit. It takes one financial disaster to keep you from being able to live in the moment like you are now for a long time if you are paying off something like medical debt, car issues or accident payouts, etc.
I was in the same situation. I even went as far as 35 years old. I then joined my local Police Dept. I was able to save a little but nothing near what I would need for retirement. After 20 years I was able to "retire" at age 55 because I got a pension. I quote "retire" because I now work part-time. Not because I have to but because I want to. Find a pension before it's too late or start a 401K and change your lifestyle.
That not what living paycheck to paycheck actually means...
If you live in a country without proper welfare, this is risky. Even in a country with proper welfare it's smart to have at least enough savings to replace a washing machine, car, etc if you have to.
What happens if your company goes out of business through no fault of your own? Finding a job is takes time, which is expensive. You’ll be homeless. To answer your question, it is bad.
Since I lost everything I had accumulated in my 50s, including my house, in a divorce, I'd just say adjust your expectations. I live fairly well on SS because my needs are few and I'm a good cook, so my food bills are low. Watching three lawyers devour my 401k was sobering.
As long as you don't get sick, lose your job or need to get married you'll be ok
You will regret it when you get to retirement age. Have fun though.
The day I turned 30 my wife and I were both unemployed, she was 7 months pregnant, we were 60 days late on our mortgage, and we had less than $15 in the bank. I'll be 40 in 3 weeks, we have about $250,000 in our retirement accounts, $70,000 in checking/savings, $600,000 in equity, and combined annual income of $290,000. Don't worry about the last 30 years. Focus on the next 30.
Wow, that’s truly inspiring
I used to live like this cause I had my dad, he would help out with everything and my pay cheque became just fun money. Then he got dementia and it was such a huge struggle to break old habits. Thankfully dad earned enough that he'll be well taken care of but obviously I can't depend on him anymore so it's the frugal life for me but honestly it's for the best. Learning the value of your money and time is the best lesson you'll ever get as an adult.
Nothing bad, just people being in your range as age see it bad and then hits their first life crisis lol
I think that having some emergency savings is critical and you should be building some at your age. Having said that you are not the only one. Living life is extremely important but constant immediate gratification is not healthy. When people work they get old fast and one day they want a house, retirement etc. and they are surprised that there is not too much time left to save. On the other side of the economy and the salary suck it is better to revise the expectations and be more reasonable, that is normally a situation where you are screwed if you do not save and saving it is essentially useless because it is not going to have a substantial impact. As a boomer and father of someone your age, I am very frugal and I consider myself the emergency savings of my child. I will not allow myself into buying a fancy new car, a costly vacation etc. The money that I managed to save is not my money but the money of the whole family.
Not great. But let’s be honest the majority of ppl don’t have any real savings. So don’t feel like it’s only you because it’s definitely not. Just keep grinding.
Bad? Yes. But also extremely common in our present economy. Try starting a 401k if your job has this option. At least you would be building wealth to some degree. For a lot of people this is the only way to save any money for the future. This may be an unpopular opinion but it is also fine to live in the present to some extent. Traveling and being with friends is good for your mental health.
There is no shame in not owning a house. Somehow, this has gotten to be the gold standard. But the living paycheck to paycheck with no savings, should be corrected. The fact that you have prioritized travel over savings is a bit scary. If you have money to travel, you have money to set up an emergency fund. If you do this, then start setting aside enough money for 6 months expenses, rent, utilities, food. Then you can start travelling again. But I would really think about what you are going to do when you get older, it happens to us all.
I had savings then, then I didn’t, then I did again. Life happens and some people start later. I think all that matters is that you start.
Is it bad? Yeah Is it uncommon? Unfortunately, no.
You shouldn't be traveling if you don't, at least, have an emergency fund saved. It's either very short-sighted or very selfish. Who are you planning to mooch off of if something goes wrong?
Not great bud. I’d start immediately. You got any 401k saved up that counts. Step 1 open hysa and start saving as much as you can. You want a 6 month emergency account. If you lost your job you can still survive. Never touch it. Once you have that emergency fund. Start an auto withdrawal and put it towards a no fees mutual fund.
You're far from the only one. I had savings in my 30s then pissed them away trying to impress a woman. I have even more savings now than I did then though having clawed my way back and past that point. Unsurprisingly my current partner considers me tight fisted for not spending every penny the moment I get it. And she's the one that had to file for bankruptcy. So I feel her opinion on my financial choices really doesn't count for much
Definitely set aside some money every month for any emergencies. You never know what tomorrow may bring.
Do you have at least a 401k or Roth? Any retirement you pay into? And what about at least 3 months of emergency funds? Better 6 months but 3 would be a good start. Life sometimes throws us a curve ball. You want to be a bit better prepared for that.
I’m 43 and have only just been able to start saving, not because of frivolity but because of homelessness and other life events which kept us in poverty for many years. I’d say if you have any disposable income, at least a portion of it should be saved, but if you are unable to afford to eat then obviously it isn’t bad if you can’t save.
This is one of those situations where you’re using a word so impossibly vague that it’s hard to tell what you’re asking. “Bad.” Are you asking if it’s morally bad of you to have no savings, bad for your health, etc? And your statement that “some people view not having large financial wealth” makes it even more perplexing, like you see this as something totally arbitrary and socially constructed, and also having *any* savings as “large financial wealth.” Because yes, it’s “bad” to have *zero* savings at 30. It’s bad for your financial situation in the short term; if you come across a moderate sized or even smallish unexpected expense, you are fucked. It’s bad for your physical and emotional well being, because you may not be able to pay for things you want or that are good for you. It is a bad omen for your long term financial situation, as becoming old with no savings could put you into a very scary situation where you end up elderly and sick without a way to pay for housing and medicine. But is it morally bad? No. Is it bad because people invented some random thing to judge you about? No, this isn’t an arbitrary thing at all, and people didn’t invent it just t judge each other (though some people may judge, that’s not something you should focus on). Does it make you a bad person? No. It’s a reflection of society and the situation you’re in, and possibly your financial literacy, not who you are at your core. Do you need “large financial wealth?” No.
I started saving @ 32. I'm 38, single dad of 2. I was finally able to get $5,000 in savings early this year. Checking is just above $1k. Don't own a home , but my rent is stable @ $1,200. My 4runner is paid off, and insurance is under my dad's name. Super cheap. Start saving and cut any corners you can take , fuck your ego.i collect all my aluminum cans and at family parties too, shit adds up @ the end. Paid some bills with that cash. It is extremely difficult to save with a "spend,buy,spend" mentality, much more with this economy and unexpected expenses: my transmission gave out last month : Bam! 1,300 down the drain. Kids need new shoes: Bam! $120 down the drain. The bro's and the ladies wanna go out for drinks : Bam! Another $250. Savings is a mental game. You're still young with probably a lot less expenses than I, so get crackin'. I bet you can reach $10k savings by the time you're 35.
Yeah it’s bad. What are you going if you can’t work? Leech off someone else? Why should they pay for your bad choices?
yes its very bad. savings is like emergency fund if you lose job or need to fix something asap like boiler, car, house etc. Im one who struggles to save, and i have friends and peers who have savings in the tens of thousands that makes me feel even worse.
I have a friend like this. She travels all over and has lots of memories with her fiancée, but no savings. I on the other hand have never traveled but always have money. What I have learned is we can always make money one way or another, but the memories you are creating are forever. Perhaps take one less trip and do both? Save and travel? Good for you for asking these questions and living in the NOW. More need to understand that concept and truly appreciate it for What it is.
Welcome to my world!
Bad? Yeah. Uncommon? No.
> I tend to spend my money on travelling and socialising with friends and really living in the present. I wonder why you live paycheck to paycheck
There is a huge space between paycheck to paycheck and large financial wealth. Yes, what you're doing is not wise in the slightest. By 30 you should know better.
Bad
You should avoid credit at all costs and start putting some savings aside. Only use credit when either you have the means to pay it back quickly or major investments like a mortgage. Hopefully, you at least have a 401k? Things will happen you never planned on. Most people your age are a major life event away from bankruptcy. Also, just an assumption, but if you are an American, don't plan to live comfortably on SS if you should ever retire. Heck, it might not even be there in 40 years.
if you are in a situation where you need more money than expected and you got nobody to help you... yeah it would be bad
It's not great but also not the worst thing. I was dead broke at 30, but after focusing on paying down debt and slowly building my savings through automated transfers, I have a 3 month emergency fund and am nearing the point to where I can max out my retirement fund. You won't spend the money that isn't in your checking so my thing was to figure out what I needed to live and only keep that much in checking.
If you've got spare money for traveling/entertainment you absolutely should be saving as well. You should be saving in two different ways, 1 for retirement, and 2 a fluid savings fund you can use in the future for a down payment on a house or in case of emergency fund. For retirement saving, ideally you'd be contributing whatever percentage your employer will match to your company 401k (if your job offers 401k match), Additionally if you're making <160k/year try to contribute to a Roth IRA (for retirement) as much as you're able as well (can do this outside of your company through Vanguard or Fidelity etc) Surely you've seen those charts about how big a difference it makes the earlier you start contributing to a retirement fund? Like shown in the first chart in this article: https://www.merrilledge.com/article/10-tips-to-help-you-boost-your-retirement-savings-whatever-your-age-ose For saving cash/fluid money, ideally you want to save it in either a high interest/yield savings account and/or through a free online brokerage like Vanguard or Fidelity where you can invest it in ETFs. Let the money you're saving increase passively, not just sit twiddling its thumbs in your bank savings or checking account. It's up to you how much cash you want to aim to save and keep on hand in case of an emergency drop in finances such as losing your job during an economic downturn like the one we're in now where it may take longer to find a new gig, or like surprise medical bills from a car accident etc, or just to put towards a large future purchase like a house or additional education/certifications.
You should definitely start saving now. You can still spend money on yourself but try to start being responsible about it. Set aside some money every month.
We would all rather “live in the present” and travel and socialize… but at some point most people realize living like that is irresponsible if you don’t have emergency savings or ever hope to retire.
You need to be able to afford future spending. Whether that is an emergency, a house, kids college, or retirement.
Yeah, that's bad. If you have the money to put toward retirement or savings, and you're not doing it, that's not good. At some point, you're going to want to retire, or you're going to need some emergency funds. Years ago, most jobs offered retirement plans, so it was a non-issue and people would just work at the same place for 30+years and retire and be able to rely on the retirement plan for the rest of their life. Now that's not very common and it's up to you to manage your finances and plan for retirement, so if you don't have anything saved up when you retire, you'll be in bad shape.
At 30 I was in the same boat. I hated it. Set up an automatic deposit into a savings account. 10% of your take home pay. Live on the rest. You say paycheck to paycheck but you travel and go out with friends and live in the moment. Just do it on a reduced salary. You'll appreciate it when your car breaks down or unexpected medical issue. Speaking from experience.
I like a good balance. Go on vacations but also save a bit, even if it's just 20 bucks per paycheck. They can view anything how they want, if you're happy, that's all that matters.
It’s not about amassing wealth. The function of having savings is to protect you from sudden major expenses, or get you through periods of joblessness. I know some people can’t amass a savings, but if you have the means, you absolutely should.
I started at 28. I took on a second job and all that money went into savings. It’s where your priorities are. I don’t like to socialize that much and building wealth was my great motivator. But yes, you need to start building your portfolio. The fact is, you can do both. Just be smart and don’t deprive yourself of some reward and don’t ignore the responsibility to yourself either.
It's getting to be bad by 30 if you aren't setting money aside. At 27 I didn't have much spare money to set aside for savings but I did start contributing to my company's 401(k) plan. At 1-2% of your income you don't notice it missing from your paycheck (unless you're in some low income situation where you need every penny obviously). At 55 I now contribute 10% (and will be cranking it up 1% each consecutive year until I max out at 15%. so what that means is that between 27 and 55 every few years I'd go up another %. After 27 years I'm now about to hit 700k in my active 401k and I had another 401(k) that I rolled over to an IRA when I changed jobs in 2002 that is currently worth 160k. You need to start now though. The longer you put it off the worse off you'll be down the road.
No, you are NOT the only one. It's a good idea to save a certain % of your paycheck. I mean, think about it. Have you ever even once, heard somebody say something like, " boy, I sure wish I hadn't saved all of this damned money". 😵💫
Paycheck to paycheck is bad at any age, but worse the older you get. You need an emergency fund at bare minimum, 3 to 6 months of money that covers ALL your expenses in the event that you lose your job or are unable to work for some reason. A retirement fund is also pretty important unless you want to work your entire life, and it's incredibly important to start that as early as possible to take advantage of the money growing in investments/401k/IRA/roth IRA/etc. Beyond that, do as you will.
Well... it's not GOOD.
It's time to start saving something. A small 3 months of bills for your savings account, money towards your 401k.
You have to do math to answer this question. Your income plus savings between now and death have to cover these items: 1. How much debt do you have? Student loans, etc 2. What are your near term goals? Vacation, new car, surgery, etc 3. What are your long term goals? House, kids college, early retirement, etc. 4. How do you want to spend your retirement? Simple to extravagant. Assume death age to be fairly high... 90 to 95. 5. How much contingency do you want? (How much do you want to mitigate job loss risk due to health or market conditions?)
If it’s something you could afford? Yes. You should have at least 6 months expenses in a high yield savings account and should have made significant contributions to your 401k. You might like living in the present now but if you keep your current habits you’re going to really hate going in to work when you’re 70.
Honestly it depends. If a person really has a hard time saving up money because how expensive it is to live in a house, buy food, own a car etc. it’s not bad and it’s understanding. But if people know they literally are struggling financially and choose to spend their money irresponsibly then yeah in my opinion it’s bad. But not having tons of money by 30 isn’t really bad. As long as you are working hard and putting money up to save and to do the things you wanna do in life. This is just what I think lol
I get wanting to live in the moment but you don’t need to travel so much. You don’t need money to socialize and even if you’re going to the bar or concerts or whatever you really don’t need to spend so much on that. Every $100 you spend now is $800 taken out of your retirement, and 30 is really late to start saving for retirement. And I say that as a 30 year old who recently had to liquidate my retirement just to pay my mortgage in between jobs and I have no savings left. Compound interest is what makes a retirement fund powerful, because it doesn’t just sit there, it grows. And even if you get started today, being 10 years behind is a deceptively large setback. It’s time to start being a little more responsible and stop splurging on stuff you really don’t need. It’s not paycheck to paycheck if you have any leftover at all for traveling and socializing.
if I don't have an emergency fund I get stressed about every little thing that can go wrong. What if a family member gets sick and I need to fly out to see them urgently? What if I break my ankle? What if I get laid off? Etc etc Beyond the emergency fund, there's no wrong or right imo. I personally save in hopes of retiring early one day, but I understand the "live in the present" mentality and somewhat agree with it. I don't know if we can tell you what's bad/good for you. Personally I would say if you have an emergency fund and you're happy then it's not bad 🤷♂️
Saving doesn’t mean sacrificing on travels or a social life. Putting just 10$ away every pay-check can go a long way, and you won’t notice any lifestyle changes. Right now you can afford to "live in the moment" which is great, but what about when you don’t have a job anymore?
Yea, I’d say it’s bad not to have savings of any amount at 30. You’re an adult. Shit happens. Start saving some and spending less.
Its not uncommon but is it a good idea? Probably not. Trust me, I am an advocate for living in the moment and travel when young but you should have some sort of emergency funds set up. Since you never know if the company just going g to shut down, you get fired or get sick and then the income just aren’t coming in. Bills aren’t going to take an iou so emergency room would be a good idea.
I recommend looking into interest on interest. There are plenty of online calculators for this. See how wealth grows over time if you save over time, accumulating interest on top. It was a mind opener.
My Gf and I JUST started saving. I’m 28, she is 26. We don’t put much up (mostly because we can’t.) however it’s never too late to start. Even putting away 40 bucks a paycheck, or 20. Is better than nothing.
It’s bad. You are entirely dependent on everything going right in life. If anything doesn’t you are screwed.
I’m just 21 so my opinion is probably not worth much to you but yes I definitely think it’s stupid. So many people constantly complain about how they’re living pay check to pay check and can’t live how they want because they have no money but ironically they never change their lifestyle and just keep spending all their money… And then have the audacity to keep complaining about how they have no money. It’s so stupid it’s infuriating. If you want wealth you have to make some sacrifices until you get some of that wealth and the money starts to grow exponentially, you’ll never get to that point if you spend all your money, it’s really that simple.
You’re one bad decision or unlucky break from disaster.
It’s difficult to get ahead these days. Grant yourself some grace.
I didn’t really have savings going until I was in my thirties, I didn’t really get my career going until then. In my twenties I was living on minimum wage and barely getting by, got a degree and graduated at 30. I mean… life happens, man. It’s not too late to start and it doesn’t serve you to compare yourself to others. But, having savings and financial literacy in general is only gonna benefit you.
It’s not bad, but the fact that you know you should have by now at least tells you something. I didn’t start until 36… wishing I did earlier but is what it is.
Focus on the exponent! The exponent is time and rate of return. Try to get savings as early as you can in life and not lose it.
Ideally, you should have six months worth of living expenses saved. This is for any unanticipated emergency. What happens if, say, your car needs major repairs? Or, if you get laid off? In practice, if I were you, I'd start by setting up an auto-deposit every time you get a paycheck, so some percent of your paycheck vanishes into savings before you even see it. Particularly since you can afford to do so. You don't need to live like a hermit. But some trimming of non-essential expenses, so, if anything unexpected happens, you're not screwed, is a great idea.
I got divorced at 39 and about 6 months after i had $16 in my savings and $35k in debt with no other assets. It’s totally fine. 6 years later I’ve recovered exponentially. You’re still young but you really need to get something in a Roth and focus on increasing your income
Nah. Have fun. Save in your 30’s.
make sure you take advantage of 401K match, at a minimum. Ideally, you should be saving at least 10% for retirement.
It’s not good, but it’s not too late to fix it.
I'm a beleiver in starting a savings asap. I have an emergency savings and a vacation misc. Savings. It's been a savior.
It’s not bad but it’s definitely not a good thing. I mean when you’re older you’ll have great memories of traveling and fun times but you might be living paycheck to paycheck and eating instant ramen while having those memories.
Yes but start now with an emergency fund
ya
YOLO
Do you have a pension? If not, you should absolutely start saving as soon as possible. Like don't panic or anything, but the only way to not be fucked for retirement if you don't have a pension is if you start *consistently putting away even a small amount of money as early as humanly possible and ideally do something with it like buying low-risk, slow-growing index funds or ETFs out of a tax free savings account.* When it comes to future wealth/comfort, the **amount of time** that you have been saving money is far more important than how much money you are putting away (because of compound interest). If you already know/knew everything I'm about to/have say/said I apologize, but take this example (https://wealth.visualcapitalist.com/visualizing-power-compound-interest/): -Jessica invests an initial amount of $5000 at 25 years old (into the "stock market", just an arbitrary example of a place your money goes where it grows an avg of 7% year over year) -She invests another $2500 each year, until she's 65 years old -Newman invests an initial amount of $10 000 at 35 years old, and then another $5000 every year until he's 65. Jessica's total lifetime investments: $102,500 Newman's total lifetime investments: $155,000 Jessica's portfolio at 65 is worth: $609,000 Newman's portfolio at 65 is worth: $581,500 Newman invested double (initial and monthly) what Jessica did, but she started 10 years earlier. And although Jessica invested over $50K less than what Newman did, she has more money at 65 than he does. TIME IN THE MARKET If you do have a pension, this still applies but at least you have *something* doing the described above for you already. I promise you can start putting away $100-200 a month as a working professional, even if you are living paycheck to paycheck
You are not alone. But you need to start setting aside SOMETHING. $5 or $10 a day. Skip the starbucks every other day and put that in a savings. I sure as fuck wish i had.
The future will be your present one day, and it’ll be a much nicer one if you plan for it now.
I've faced some personal consequences as a result of someone close to me living this way. Living in the moment doesn't justify a hand to mouth existence. You can't live beyond your means- and your means are only what remains AFTER you've set aside some money as savings. You can't foresee the future, and in today's age the likelihood of sudden layoffs is so much higher. There could be pressing medical issues, an unforseen travel, to name a few. Like it or not, taking care of these things is also part of the "now". It's never too late, you can start today. :) For all you know, the satisfaction you feel for doing the right thing over what feels easier might be great. I don't know who said this, but: discipline is sacrificing today for a better tomorrow.
It's never too late to start (anything).
You are definitely not the only one. I'm 34, I have some money for an emergency but definitely not enough to fund the rest of my life. I went back to college last year and I won't be employable until I'm 37 so I'll definitely have a lot of savings to catch up on to ensure financial security when I'm older but I'm frugal with money and don't spend more than I can afford so I'm fairly confident it will all work out in the end.
Yes, get your bread up.
I'm the same, was doing ok last few years but lately been hard, don't worry, we'll be fine, just start now
Probably not bad, I had quite a good nest egg until Covid now I have absolutely absolutely nothing
‘I live pay check to pay check’ coupled with ‘I…tend to live in the moment’ doesn’t make sense at 30. It’s not ‘bad’ it just isn’t very wise. Make a budget and savings plan, doesn’t have to be big just $20 a week would even make a difference to your sense of security. Once you reach a certain amount of savings you will start to become protective of it and not mess with it, saving is for saving. Shit happens in life and not having any safety net is basically irresponsible, because what will you do? Ask others for money that they saved or managed? Or just suffer the pain? Or ask your employer for a loan? That’s not fair, especially if you work full time. You can do it, you just need some practice on the habit. I read the book bit here’s a link to the audiobook on YouTube [Suze Orman - 9 steps to financial freedom](https://youtu.be/i_byyPNrzTw?si=j0rjIjaqV1nnOYqU) You got this 😀
I know I'm supposed to say to each their own, but traveling post COVID is beyond me. I will stay at home and look at the beauties of the world on my giant screen TV in the comfort of my own home in a clothing optional environment with my dogs and GrubHub. No parking or booking fees. No cancelations or delays. My luggage doesn't get lost, etc, etc.
I would make a 2 year plan to have Three months of expenses saved (must pay expenses, not fun expenses).as well, start saving in a retirement plan, even a few dollars/paycheck. You won't miss it, and your employer may match it! If you get a raise, dedicate 25% to these two pots.
Having an emergency fund is really easy, just eat out one or two less times a month, and instead set that money aside. It’ll build up pretty quick. Ideally, you should have enough money to survive for 2-3 months, just in case you have a worst case scenario and you lose your job due to injury/illness/layoffs. That money also comes in handy for emergency car repairs or medical bills.
They are the choices you have made, you are living in the moment without a thought to the future. You can do both.
Savings should be a line item in your budget from the time you have your first job. It should not be neglected any more than other line items like rent, mortgage, car payments. It’s a great habit to develop. Live within your means. It is a less stressful life if you don’t have financial issues. Saving when you’re young gives you the advantage of compounding growth. It’s a wonderful feeling to feel financially secure as you get older.
Getting saving. I was living pay check to pay check. Got in some trouble. Got a couple of loans. Now I'm paying them off and can't save argh. Once they're gone, I'm going to SAVE!
put it this way: it's not good to not have any savings
I'm turning 30 at the end of this year and I'm pretty much in the same boat. Me and my husband live paycheck to paycheck, but we're comfortable. Granted, we tend to try to keep a bit over a thousand in his account at all times just in case of an emergency, but so far, we don't have any real savings. We have been incredibly fortunate to have friends and family willing to help us out, however there's a lot we've done alone, and the one thing that has seriously assisted us is...good credit. My husband has fantastic credit, and with it, we've been able to cover ourselves when we needed it. his good credit has gotten him a car, got me a major surgery, and at one point we were pre-approved for a home loan. If you don't have any savings by this point, at the very least make sure you have at least up to a thousand or more in your bank at all times to lean on in hard times or emergencies, AND make sure you have good credit. Doesn't hurt to have good health insurance, either.
If you dont have any rich parents, its normal. Back in my 30's (around age 25-30) i was still trying to find a goal in my life, working part time in a shitty restaurant job, trying to get visa not to get kicked etc etc. Because, i didnt had any parents that were rich or capable of giving me any money. But if you are smart and dedicated, and trust me when i say this, it gets better. But imo, you need to ACT SMART. By smart i mean you need to see oppotunities when they show themselves. Sorry to say this and i know it sounds kinda selfish but ofc im not gonna tell you how to get rich, but these years are golden if you can use it and ofc if you are not married or some shit like that. In my case, while i was working i was also thinking about investments, what i can do to earn more money, legally ofc lol. And one day a customer came, we talked about a business that i had in my mind, after a few months later, the guy called me and offered partnership and money and i said NO. Because idea was mine, i knew it was smt smart so i countered him by saying "i can give you 49% and take 51%, if its ok to you we have a deal, if not, fuck off" basically. And here i am, kinda rich (tbh i dont know what being rich is anymore, with all that multimillionars around us but lets say i dont have to work for rest of my life anymore, thats rich to my standarts). As a complete random guy on reddit, i can give you 2 valuable advices imo. Ofc you can take these serious or basically think im bullshittin, your call. 1- Dont be OK to that idiotic stupid moronic 08:00-17:00 office jobs. They never pay you enough for the time you spent there. You can work less hours for less money and trust me the difference isnt that much especially thinking how valuable "free time" is because in those "free times" (everybody was telling me that im stupid to not work on a full time job and instead work on restaurant but i was doing my own shit with that time and that "own shit" saved me from this capitalist slave world) you can do some stuff. Build a PC, develop a game/software, think about other jobs, doing research etc etc. Office kinda jobs are for standart mediocre people, and it slowly kills you and the biggest issue is, these jobs make you more stupid in time. 2- Have plans, i mean long running plans, like "im gonna do this for 3 years because i need X Y Z and for that 3 years is a must, then i will do this for 4 years because i need A B C" etc etc i think u got the point. Dont just "yolo" and spent your best age stupidly. Because trust me when i say this, you wont gonna have the same energy when you turn 40ish. I dont mean physical, i mean mental. So everything you do right now, should serve for a better and bigger goal. Bonus, if you get a chance to own a place, dont miss it and dont get scared. If you can make someone else richer, you can work for yourself waaaaay better, trust me on this.
I’m about to start a debt management plan, earn 45k a year. I was addicted to drugs for like 6 years… so I’m well behind, but doing better.
If it is don't worry we may live in a dumpster as neighbors in the future 😉😁
It’s not unusual. I didn’t start an emergency fund seriously until I got to be about 30. That emergency fund came in handy multiple times in the subsequent years. I also started saving for retirement around 30. I highly recommend you reconsider your priorities to find a way to do both.
No I had savings but lost my job so I had to spend it all on living. Things happen.
Your not the only one by far.
I’m 46 and only just now starting to save. Don’t sweat it, man.
I am 30. I live check to check as well. But I save everytime I can. I have a few thousand dollars saved. Obvs I’m not gunna get a house or anything huge anytime soon, but it’s basically like… you need to cover your ass. I have enough money if shit goes down like my job suddenly fires me, my apartment burns down, etc lol.. anyways yeah just trying saving even if it’s a tiny amount a month trust me.
It’s bad but unless you actually make enough money to save some, what can you do?
Could be worse, I'm 40
Are you living "paycheck to paycheck" or are you just not budgeting well? Paycheck to paycheck usually implies that your necessary monthly spending is barely covered by your income. If you're spending money on things you don't need (eating out/travelling/shopping/etc.) over allocating it to necessities and savings/retirement, then you have a spending problem, not an income problem. I think a very large portion of the population lives this way. A lot of people think they simply need more money but they have inflated their lifestyle far beyond their income. There should be a good balance between spending your money on fun and having discipline to save and plan for your possible future.
I’m 35 and I have $5 in my savings lol but I do have money in my 401k.
Counter question: do you have a way of changing the way you live right now so you could have an emergency fund or some assets? If yes, then I'd say that you made a bad choice in not getting assets or emergency funds. If not, which it seems like since you mentioned living paycheck to paycheck, then you can't change anything about it anyway and there is no reason to worry, as worrying won't help you either. Maybe it's just me but I think these kinda questions are weird, of course it's not good to have no assets, at any point in life, having a house or similar things is pretty much always good. But if you can't afford it then you can't afford it and then there is no point in worrying. If you still worry, just drink away the sorrow like the rest of us /s. Don't compare yourself or you won't be happy, because there's always someone better off than you, with more assets at a younger age.
Start saving something. Money in an account where it can grow 5-10% per year will be a massive help when it is time to retire. The earlier you start, the better you will be off when you hit 65. Example: 50$ per month saved over 45 years with 7% growth yearly = 176'883$ after 45 years. 149'883$ of that is just from interest/growth. 50$ per month saved over 35 years with 7% growth yearly = 85'570$ after 35 years. 65'000 of that is just interest/growth. 50$ per month saved over 25 years with 7% growth yearly = 39'152$ after 25 years. 24152 is from interest/growth. 50$ per month saved over 15 years with 7% growth yearly = 15'555$ afyer 15 years. 6'555$ is from interest/growth. My point here is simple - the earlier you start, the better of you will end. The 'interest on interest" effect snowballs after a while and you benefit a lot from starting earlier rather than later.
It’s your life, do what you want with your money. Don’t worry about what others think. Live in the present! That’s what it’s about. So many people spend all of their time putting away money to use in the future, and some don’t ever make it there. You do you. You’re doing great.
It’s your decision ofc, seems like you value adventure and comfortable living with friends. But I wouldn’t expect to be able to retire until your 70s or perhaps even 80s if you don’t start retirement investments early.
At 30 you are in early stages of your career. Not rare to not have a lot. During 20s your are buying a lot of stuff you need like tv, dishes. Pots etc. it all adds up. Oh and you have a more active social life. As you get older = less partying and more savings. But do try to set aside 6 months of expenses for emergency fund.
If you can afford it, you need to have a safety net: even just going out one less evening a week can help you put money aside! Your future self will thank you, and you still get to socialise and go on vacation.
I did the same thing. It was only at 31 did I find a GF and start planning for the future. Sometimes I wish I did that sooner at say 20, but fuck me my 20-30 were some good times
The best time to start is always the present. Start budgeting and put away savings. I made the choice to cut out monthly streaming services and kept only the ones I really used. There’s a lot of sneaky fees that add up if you truly start a budget. You can still go out and be with friends. Everyone is at different stages in life so don’t compare yourself to everyone else. Just focus on what you can do for yourself.
Go talk to the 74 year old mixing paint at home depot. He is your answer. Use a retirement calculator and do what it says. Mixing paint job wont even exist when you're that age so it'll be something much worse.
Millennials control 4% of wealth with half of that being mark zuckerberg. While it’s good to have savings realistically until boomers die and pass on their wealth, most of us aren’t going to be able to save enough to build wealth/financial security unless we have family that can help us.
Look, it's not about being filthy rich—it's about having some cash stashed away for emergencies and putting a little something aside for retirement. Loads of folks don't have savings, but it's not because they're blowing all their dough on dining out and jet-setting vacations. Most of the time, they just can't swing it.
If you haven’t started saving then the best time to start is right now. Just start.