How much savings should you have at 32 years old?

greendoor665

I'm nearly 32. I have around 45k in cash & investments and around 30k in my pension.

As recently as 27 I had less than 1k in cash, no investments and no pension. I have only got here as I woke up to the fact I was doing dead end jobs for low pay and wasting my potential, and despite living with my parents hadn't saved much.

I have joined a large company and invested in myself by doing a professional qualification which has increased my earnings quite dramatically. I have been taking advantage of my companys sharesave scheme amongst other things which so far has made me some decent returns. Once the sharesaves mature they go into my stocks and shares ISA.

I do recognise that I have been fortunate to save money by living with my parents for a number of years. I did pay them rent/bills contribution but less than the market rate. I am now fortunate to be living in a house owned by a family member by myself rent free. This has meant I have been able to save a higher percentage of my earnings than someone renting privately.

I don't live extremely frugally but I don't spend excessively on 'stuff' either. I drive an old car, don't buy takeaway coffee etc but I do spend money on experiences and holidays.

Alexland

greendoor665 wrote: »

I do recognise that I have been fortunate to save money by living with my parents for a number of years. I did pay them rent/bills contribution but less than the market rate. I am now fortunate to be living in a house owned by a family member by myself rent free. This has meant I have been able to save a higher percentage of my earnings than someone renting privately.

Yes great point I spent the early years of my career living as a lodger while I was saving up my first property deposit which was significantly cheaper than renting. I then took lodgers for extra income to overpay the mortgage - all tax free income under the rent a room scheme.

My wife did the same when she was single and to be honest did slightly better than me overall (she bought a bigger property for a great price during the financial crisis) so when we married we had about the same amount of money despite her being younger.

Alex

Fatbritabroad

As others have said don't compare it doesn't matter what others have as we've all come from different starts in life and different stages. At 32 i was similar to Alexland. At 37 i have twice that. Once you have a decent amount saved it's amazing how quick compounding adds to the amount. Also beware measuring net worth in a benign investing environment. Another financial crisis could halve that figure quite easily

CKhalvashi

OP, it doesn’t matter what you do or don’t have as it’s all relative to lifestyle and income, you are right to take an interest though.

Best advice I can give you is to start saving here and there as you can to build a small pot, before working upwards as and when you can.

Most households in the U.K. are in difficulty if they don’t need have pay for just 1 month, so the answer is likely not as much as you think.

KeepOnKnitting

Think of yourself as starting from scratch now. Don't beat yourself up about the past, you can't change it.

At 32 I had about £500 in savings, got discharged from my bankruptcy, was enjoying the freedom of divorce to become a mature student, and I felt like I was 18 again. We all have different paths.

zzzt

Zero_Sum wrote: »

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.

Personally I wouldn't subtract mortgage from savings. A mortgage is a secured debt that doesn't prevent you from using your savings. It's not secured against your savings, it's secured against your house (an asset), so you would subtract the mortgage from that, and unless you were in negative equity, you would get a positive figure.

You are talking about net worth, which is a different thing to discussing savings.

MallyGirl

greendoor665 wrote: »

I have been taking advantage of my companys sharesave scheme amongst other things which so far has made me some decent returns. Once the sharesaves mature they go into my stocks and shares ISA.

Hopefully you mean that the profits made by selling your company sharesave shares goes into your S&S ISA. Otherwise if your company goes belly up then so do those investments along with your salary - too many eggs in the same basket is not a good idea

lalman

What an interesting article.... I am 32 but as other great posters have said before we all have our own paths, own ideologies and aims.


My aim since starting work after my undergraduate degree was FIRE (Financial independence Retire Early), never have to worry about money and start a business.


I have 3 investment properties and looking to double that number and have 8 by 35 but the first 1 was the longest slog, 2nd one took 2 years and same with the third... 4th and 5th deposits took a lot shorter time to get together.... but as others have said compound interest/ investment returns is so effective.


I am unusual but as long as you have good mentality and you have woken up you will be fine.... take one step at a time and don't beat yourself up about the past... as I told an ex girlfriend 'time is linear'... safe to say that didn't last....


Life is not a race... there is no correct answer unfortunately and money is not a mark of success or failure....

DragonQ

I'm close to 32 and have £18k in savings/investments and a £15k pension. My savings pot has actually decreased since the start of this year due to several large purchases (two week holiday, air con, home cloud server, and a kitten).

Before I bought my house 2 years ago I could get at least 3% on nearly £50k of cash by spreading over various current accounts and regular savers. This is no longer possible since rates have plummeted, so I started getting into stocks and shares investments. I got pretty lucky (timing wise) and signed up to a robo-investor while they were doing a great promotion, so I got £500 cashback and can also invest up to £12k with zero fees for life. I'm close to filling that so I'm considering what to do next. The best place to get good interest rates seems to be these risk-spreading peer-to-peer lending sites, but for long term investment I guess going with an IFA makes more sense.

I put 100% of the extra money I got from my last two pay rises into my pension. It saves money in the long run (no tax or NI to pay) and I don't need the cash now; I save about 5% on my weekly shop due to a discount I get with work; I've made a few thousand pounds just by taking advantage of cashback offers for investing money or switching bank accounts; I do all of my spending on 0% interest credit cards so I can earn some interest on the cash in the interim. You just have to be pro-active in seeking out opportunities to save and make money.

In terms of properties, I might rent out my current property when I decide to upsize but I'm not sure yet. I really don't want extra hassle and obviously it's a huge gamble at this point in time given the current property bubble and the possibility of a Labour government who could introduce rent controls or extra taxes that would make having a property portfolio far less attractive. Personally I think that would be a good thing but that's a story for another day.

Zero_Sum

zzzt wrote: »

Personally I wouldn't subtract mortgage from savings. A mortgage is a secured debt that doesn't prevent you from using your savings. It's not secured against your savings, it's secured against your house (an asset), so you would subtract the mortgage from that, and unless you were in negative equity, you would get a positive figure.

You are talking about net worth, which is a different thing to discussing savings.

But it is related to savings in terms of choice as to overpayments

I could have more money in savings if i chose not to overpay but have a bigger mortgage. Whats the difference?