How Much Should You Have Saved?

How Much Should You Have Saved?

There is no set amount of money everybody should be saving each week, month or even year. It completely depends on everybody’s individual income and lifestyle. Although, we can advise that you could have a specific amount saved/ put away each month to ensure that you have enough money in case of any emergencies.

Especially during this pandemic, we have been able to identify how important having a set amount of money saved and put aside for emergencies is. With more people losing jobs and becoming furloughed, it is a very important time to have funds saved up which you can use in emergencies like this for basic essentials and everyday life.

This also links back to our last post on emergency funds which mentions aspects including how you can create an emergency fund and why you need one.

Is there a specific amount I should have saved?

Although there is no exact figure as people earn different amounts and people begin to earn at different ages, there are different guides which are helpful. For example, bankruptcy professor Elizabeth Warren suggests that everybody should be saving 20% of their income, if not more. Her budgeting rule states that we should use 50% of our income for essential, 30% for wants and then the remaining 20% is to be saved.

Although, as mentioned above, people earn different amount of money each month, therefore, some people may be able to save that extra amount each time. If your essentials are costing you less than 50% of your income, try to put that in your savings section instead of your wants. This way, if any emergencies arise, you have enough money to fall back on instead of borrowing a loan.

Variation of money saved by age

Variation By Age

A lot of people, maybe even including you want to know how much money ‘should’ you have saved depending on your specific age. But, there is no exact amount. In fact, according to 1 in 10 people do not have any savings at all, and along with that, 1/3 of Brits have less than £600 saved. They stated that in 2018, nearly 2/3 of Brits did not have any kind fo financial plan.

Statista shows the mean amount of money saved in the UK per age back in 2017. Their graph shows the correlation between the amount of money people have saved and their age.

18-24 = £8,000

25-34 = £11,000

35-44 = £16,000

45-54 = £26,000

55-64 = £37,000

65-74 = £49,000

75+ = £38,000

As you can see, as a person gets older, their savings increase. This could be due to their increase in money management, or even just the increase in how much money they earn.

How To Save

Perhaps you are just beginning your savings journey but you do not know where to begin? Well, there are plenty of ways which you are able to ease your way in. We suggest first of all you could make a budget to suit your finances. The process begins with a course of trial and errors to help you find the best method for you.

Emergency funds

Found yourself in an unexpected emergency?

As you know, not everybody has thousands of pounds saved up which they can just automatically access when they need too, especially if you are only just beginning your savings journey. But, there are multiple other ways you can deal with your finances in unexpected emergencies. Sometimes, we are hit with bills, fees and other types of important payments which we are not prepared for. If you have no other choice, you could turn to a short term loan. This way, you can borrow what you need too and then gradually repay the loan over the course of 12 months. For more information click here.