How much should I have in bank savings at my age?

londonman81

I'm 25 years old and have been working for 18 months full time, having previously been a student.

I know this is a very open and vague question depending on many factors such as my earnings etc, but I really would like to know people's opinion...

How much cash should I have in my savings account by the age of 25?

I just want to get an approx benchmark figure against which to compare myself so that I know that I'm on course to cope with lifes expenses....

Many thanks in advance!

codetown

minimum safeguard should be 3* your current total monthly expenses, and then build on that as much as you can. I would recommend to full up your ISA allowance and also use some regular savings which pay good interest.

Probably 30% of your salary in savings would be a good aim.

cattie

When I was 25 I didn't have a bean. I spent my money as it was earned.

Really there is no definitive answer to your question, it depends on too many variables.

As things stand, you've only just recently started working so haven't had much opportunity to build up much in the way of savings I guess.

Remember too that many younger people who claim to have X amount in the bank actually owe thousands on things such as loans & credit cards so their savings are not in effect real.

ReportInvestor

You haven't said if you are a homeowner.

If you are then you might need a "fair bit" in case the roof falls in.

But IMHO paying off debt should come first - before rainy day savings - because if the roof falls in you can still go to the bank for a loan.

If you aren't a homeowner then you need "as much as possible" to go towards your first deposit since you get better mortgage deals when your home loan is less than 90% of the value of your first purchase

going2die_rich

I'd say it varies widely depending upon your job/salary, lifestyle and circumstances. If you lived at home you'd have saved on rent, where as if you had the trouble of taking loans out to pay for university you'll be paying them off before having any real savings.

Only you can judge how much savings you should have. I'd say work out how much you've made over the last year (after tax) and then work out how much you spent on essential bills (things you couldn't avoid). Whatever is left in theory should be your savings but obviously you need to have some sort of lifestyle so it can't all be savings.

It will at least show you what you could have saved last year and let you know if maybe you are spending too much on luxury items such as nights out the latest gadgets or if you are on track with your saving.

Hopefully this helps

cloud_dog

Taking a slightly different approach...............perhaps you need identify a savings general rule of thumb, which might be that you should try and save 20% of your take home pay. Obviously this is very general and there will be times when you save nothing as there are large bills or whatever but it is the concept that is important. Set aside that money up front as soon as you get paid do not wait until the end of the month to see what you have left.

When I started earning but, still lived at home, it was an uderstood rule that I would give my parents (mum) 25% of my take home pay (to pay my way). This actually helped because when I was then looking to buy a property I had a ready made hole (sort of) to use for mortgage repayments and bills, etc.

Savings is an understanding otherwise you will absolutely always live to your means and sometimes beyond it.

cloud_dog

regularsaver1

I am 25 and have managed to save £12k in the last 2 years -

i wish I'd started earlier

started pension too

and gonna have that student loan around my ears for a while

david29dpo

in this day and age, i think you are very wise to think of saving, most seem to be going mad with credit cards! good for you!

zag2me

Im 27 and had a great conversation with a very wise old man in a nursing home a few years ago which really changed my view on savings.

He sat me down and explained to me he had saved 10% of every single wage packet since the day he started work. He recomended 15% these days. I didnt take much notice of him until I found out later that week he was a self made milionaire, it just accumilated over time.

Anyway, I've been doing this for 3 years now and have a healthly sum in my savings, it hasnt really effected the way I life my life or spend my money as I just made a direct debit on the day i get paid. It really has worked for me.

londonman81

Thanks for all your replies. I probably could, and should, have given a bit more info on my circumstances so that you could judge better...

I currently have £4k in the bank, around £500 in current account, £550 in premium bonds and £3.5k worth of shares (which have recently taken a severe hammering as they were worth £6k just 2 months ago ...:-( ) I also have around £900 tied up in a deposit for rented accomodation.

I have a student loan debt which I am paying back month by month through my salary- probably now stands at around £10k debt.

I live in rented accomodation and pay £350 per month including all bills. Then my living/lifestyle expenses come to around £300 per month (food, gym, travel costs to visit parents etc).

So my total monthly cost comes to £650.

My net salary per month (after tax, student loan deductions etc) is £1525. So after living expenses I should have £875 left each month.

My aim is to put £1000 per month into the bank somehow.

I also like dabbling in shares and want to invest around £200 each month into a different share. So then I'll put that much less in the bank.

I'm just amazed at how fast the money goes out and how slowly it builds up in the bank....such is life...

Stonk

You're doing far better than average. I read today that the average person saves £270 per month. Every time I see a statistic like that it's a different figure, but always in the range £100 to £300.