How much savings should you have at 32 years old?

Ta123456

I currently have none need advice?

Robin9

Tell us some more about yourself - working, houseowner, family, etc ....

Ta123456

Currently renting at the moment, single so no kids. At the moment just realised that that spending on thing that are not really necessities looking to change my situation around.

Alexland

When I was single and 32 my total savings, investments (inc pension) and the proportion of the property that I actually owned totalled about £250k, which would be more in today's spending power with inflation. I had a good graduate job so decent earnings from the start of my career, saved, invested and wasn't too wasteful.

Everyone makes their own path but it was obvious to me that money earned and invested early would be more valuable through compounding than anything I could do with money earned later in life so I decided to get lots of qualifications, get promoted fast and earn bonuses to front-load my lifetime earnings. Now in my late 30s married and a father I am starting to slow down and begin cruising to hopefully early retirement. Still doing occasional exams but mostly for intellectual curiosity.

Good luck with your journey.

Alex

Peelerfart

To answer your question, none. At 29 I'd just spent everything I had on a house.

I accept that doesn't help you much, but the realisation that I'd worked 12 years to get to the point where I could make such a move, might.

Yup I spent money on cars, girls and booze as for the rest,as the saying goes, I just wasted :-)

zzzt

As it happens I am 32, but I'm not going to say how much savings I have. Our goals and priorities are probably different.

How much savings you have is up to you, and what kind of life you want in the future and in your retirement.

As a general rule, if you are renting you should have at least 3 months emergency fund (i.e. 3x your monthly take home pay). If you have a mortgage then you should have at least 6 months emergency fund. If you are self-employed then you should have at least 9 months emergency fund.

An emergency fund secures you against unexpected events, gives you security and peace of mind, and prevents you going into debt.

Once you have an emergency fund, you should open a stocks and shares ISA and start putting any extra money you have after expenses into an index tracking fund such as Vanguard LifeStrategy or another which has less UK bias. Make it a direct debit so that it happens automatically, rather than relying on yourself to be good and top it up.

If you want a nice life in retirement, then in your 30s you should have your annual salary in savings. So if you earn £35k per year then you should have £35k in savings and investments. Obviously the vast majority of people (including me) do not manage this, having spent their twenties just having fun.

It might sound unrealistic, but if you had saved 10-15% of your salary every year of your 20s then you'd have achieved it easily and with compounding set yourself up really nicely for your 40s and 50s.

It's never too late to start saving. I started late and after 5 years I've come a long way.

Zero_Sum

zzzt wrote: »

As it happens I am 32, but I'm not going to say how much savings I have. Our goals and priorities are probably different.

How much savings you have is up to you, and what kind of life you want in the future and in your retirement.

As a general rule, if you are renting you should have at least 3 months emergency fund (i.e. 3x your monthly take home pay). If you have a mortgage then you should have at least 6 months emergency fund. If you are self-employed then you should have at least 9 months emergency fund.

An emergency fund secures you against unexpected events, gives you security and peace of mind, and prevents you going into debt.

Once you have an emergency fund, you should open a stocks and shares ISA and start putting any extra money you have after expenses into an index tracking fund such as Vanguard LifeStrategy or another which has less UK bias. Make it a direct debit so that it happens automatically, rather than relying on yourself to be good and top it up.

If you want a nice life in retirement, then in your 30s you should have your annual salary in savings. So if you earn £35k per year then you should have £35k in savings and investments. Obviously the vast majority of people (including me) do not manage this, having spent their twenties just having fun.

It might sound unrealistic, but if you had saved 10-15% of your salary every year of your 20s then you'd have achieved it easily and with compounding set yourself up really nicely for your 40s and 50s.

It's never too late to start saving. I started late and after 5 years I've come a long way.

The savings thing isnt that simple, as what about mortgages. If i'm on £35k with a £100k mortgage, and with £35k in bank. What difference would it make if I had £15k in bank & £80k mortgage?

I think total equity/assets would be a better measure.

Alexland

Zero_Sum wrote: »

I think total equity/assets would be a better measure.

Yup I always use net worth assets minus liabilities. However even then it isn't simple as we have a high proportion of our wealth in pensions which are yet to be taxed so I end up adding together taxed and untaxed income which doesn't feel right. I am probably going to have to do some maths to estimate the future pension tax payable (based on current rules and rates) to give me extra liabilities in my family balance sheet.

Alex

dealer_wins

£9021.50 exactly. Anything less and you have failed life!!

What a stupid question!!

Alexland

dealer_wins wrote: »

What a stupid question!!

To be fair to the OP they seem to be having an epiphany about their income and expenditure and the resulting impact on their (lack of) accumulation of wealth. I expect there are many others in a similar situation with varying degrees of awareness and/or concern.

These questions are quite natural and it might be useful if they had a range of examples of the various positions of comfort or otherwise that people recently achieved at 32 and some background to how they got there.

We don't live in a society with perfect economic mobility and frankly it is not possible for everyone to get to the same position as the highest achieving 32 year old (whoever they are probably not on MSE anyway). However there are some areas of thinking and understanding that may be possible to replicate with enough motivation and determination. There may also be more lessons learned the hard way.

Alex

atush

Congrats OP on your wake up call.

At your age you should at least have an emergency pot and have joined your employers pension- have you? How much is in it?

If you havent, at least you are now about to take charge.

Go over to the debt free (do you have any?) or budget forums and post an SOA. Then people can help you to whittle down your outgoings. Do a spending diary, accounting for every pound you spend, even if just parking or a coffee. Find the waste There will be some- probably a lot) and cut it out of your spending- this will give you a boost in savings ability.