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hey guys welcome and welcome back to my channel this is sandra and i make videos all about personal finance career advice as well as having a career in technology let me know in the comments if there's a specific area that you want me to you know focus more on because i kind of see that that's mostly finance for now and today's video is going to be about how much money you should save by each age so there's so many things i was reading online about this as well as other videos i've been looking at it comes to you how much money you should have saved by like a certain age and just an example of some of the stuff that i was reading online on cnbc they were saying how about the age of 30 you should have your annual salary saved up but for the most part we're going to be releasing to net worth in this video and i'm just going to go over my own list that i've made instead of facing numbers on annual salary i actually based a lot of my numbers instead on animal spending so this is 63 000 because sure you could make 80 000 per year and even if you save that much money you're most likely not spending eight thousand dollars throughout a year at least if you're responsible in your saving and you're investing so that's kind of what i'm keeping in mind so starting off with 25 years old the first five year increment i was going to start at 20 but i feel like a lot of people aren't even graduating college yet definitely take into account this if you have huge student loans um this could definitely be different for you but at 25 you should have at least a three-month emergency fund so like i said i'm not really talking about your salary i'm not talking about three months salary just three months of spending and that that could look different for someone in cali or in the lower cost of living area and i really feel like the three month emergency fund is just the core staple of all your savings and investments combined because you really want to focus on having enough money to cover a big emergency whether that's losing your job god forbid of course um some kind of medical issue some kind of accident you never know what's going to happen life is unprecedented um as you can see with everything going on in the world today so you really want to give yourself that financial cushion just in case anything happens you are prepared for it at least to an extent you want to make sure that whenever you have the power to do something about it you want to do that for yourself or your future self or your loved ones or a family pet that's another reason why you should make sure you have at least three months savings emergency fund in your pocket not invested just sitting in a high interest savings account somewhere even though interest rates are pretty low right now um you still want to be in a place where you can just go to and reach and get that money to use for an emergency at the 30-year mark so five years later you should have one-year annual spending saved up so of course i based this off of the average annual income per household which is 63k of course this is different for everyone because you might be a single person who just graduated college and are working in their first full-time job and then you could also be a single parent who might have two kids or you could be an entire family so it really depends on you know your situation at 30 you should have at least one year of animal spending saved and this is really going to ramp up in your 30s and 40s because that's when i believe you have really the most amount of earning potential and at that point in your life a lot of people are going into higher levels in your career they're going to potentially management but it's also the time of life where you have a lot of costs but not yet at the point where you're potentially paying for you know your kids college or um helping aging parents yet in your 30s and 40s yes you're having kids it's probably going to be expensive but as long as lifestyle inflation doesn't pay you too hard that's definitely when is the best time to save as much money as possible when you're young and healthy and um you don't have too many older relatives or you know family that needs your financial help okay so when you hit the age of 35 i expect you to have a net worth of two years of your annual spending and i feel like since everyone's annual spending is so different that's why it's so important to you see it this way because when you're looking at your net worth and you have let's say 40 000 and that's one year of spending that's basically knowing that you have a potential emergency fund of a year and of course that amount of money should be partially emergency fund partially investments that you most likely should not pull out for you know anything unless you know you really really really have to and there are people who might need it for a medical reason so it really depends on you but i really feel like knowing that your net worth is how much you have in spending per year is a lot easier to think about it compared to your salary because your salary is something that is pre-tax so if i make sixty thousand dollars per year then i can't save sixty thousand dollars per year you know in general even if i you know didn't spend anything so like if i make sixty thousand dollars per year you're probably on like your take-home is probably around forty thousand thirty seven thousand ish depending on what state you're living like if your state income tax how much you're paying for social security as well as just how much you're contributing to your employer's 401k and hsa accounts or fsa accounts so there's a lot that goes into that so that's why i feel like annual spending again is like such a good measure for this so by age 35 you should have at least two years of your annual spending as your net worth so when you're 40 i expect you to have four years of your annual spending made up and again this is another reason why i feel like this is the best time to spend or save because you're potentially growing your family you're potentially getting a head start in your career a lot of people's 30s and 40s look different one woman's earning potential is the highest so i really want people to you know grind as much as possible especially when you're in your 30s and 40s you have 10 15 years of experience under your belt you're able to negotiate a better bonus you're able to negotiate a higher salary you're able to jump to a senior level position at a different company or get a promotion in your own company if that's something that you're going for so there's just so much potential in your 30s and 40s you should really take advantage of saving as much money as possible again this is gonna look different for everybody and then from 35 to 45 every five years you should be saving two years of annual spending as part of your net worth and i do agree these are definitely ideal numbers they're not you know the national average i think there's a statistic like more than 50 percent of americans don't have 500 to cover a emergency and that's a really scary statistic and i don't want anyone to ever be in a situation where they're going through a medical emergency or or they lost their job and then maybe you have to try to borrow from friends or family if that's even an option and then potentially take out your personal loan for a high interest it is just a really hard situation to navigate and get through so at age 50 you should have nine years of annual spending saved so if you spend 50k a year then by this point nine years of annual spending saved would be about 450 000 and of course the investments are all based on you and your preferences um this could be half in 401k and then partially in a roth rra and then you have maybe a six to nine month emergency fund um especially if you have kids and notice that i added three years of annual spending saved from 45 to 50 because i really believe that in your 45 to 50 you're gonna have the best chance to make the most money in your career by then you're gonna have 20 25 years of experience in the industry you deserve to get paid more and this is probably a really good time to fight for that raise or fight for that bonus um if you haven't before and even if you did um you should really fight for getting paid what's fairly yours and how much you deserve based on the work that you're doing so that's definitely something to keep in mind and especially because around this age is when you really want to save as much money as possible because who knows what kind of health impediments or anything that could go wrong god forbid again but i really feel like being prepared for these things is the most important and if you notice this is an increase of only two years of annual spending just because i feel like at this point you might be slowing down in your career um it really depends on you there are people who just pick up speed at this point so it all depends and i just want to add in that none of this is including any compounding interest or dividend income or any growth on your principal of your investments partially savings but you know a bigger chunk of it is going to be investments but your the amount of money that you actually have saved is going to be way more than this just because of compounding interest through 10 15 20 years of just having your money invested in the stock market okay so by 260 i expect you to have 13 years of annual spending which is another two year increase so by this time it definitely depends on you and your situation but this is just a goal again so maybe your partner is making less money or maybe they already stopped working or maybe your kids are going to college so this is definitely a bit of a harder time but again um if you're retiring at the average retirement age or expected retirement age of 65 then this is probably a really good time just to kind of slow down but also like save as much money as possible by age 65 i expect you to have a base of 15 years of annual spending saved and this is kind of like the final number that i came up with so if you spend 50 000 a year then for 15 years of annual spending that is about 500 000 and i really don't think that's a huge huge number for a net worth but again with years of compounding interest years of dividend growth and reinvesting that difference in income um into your portfolio and you know buying stocks back that's really going to be important because you're going to have so much money just on top of your principal and amount of money that you're investing that this 500 000 that you first invested it's just gonna be a percentage of how much that you actually have in your portfolio when you retire so that's the key to this and again if you're looking into fire and the fire movement um these numbers are going to be way different for you especially if you're going by a savings rate of like of like 50 70 90 per year there are people who do that so um if you're interested more in fire definitely check out the fire and financial independence subreddits those are really good places to get um some background into it but i'm not really going to talk about that in this video but yeah um so that concludes the end of the video for net worth per year based on annual spending um i hope you guys found this video helpful and it's really just a earmarked goal to have but it's not really something that you know i expect you to have number by number every single year because i know there's ups and downs i know life happens things that could go wrong but then there are also things that could go right so yeah it's really up to you guys but just make sure you aim as high as possible just to land somewhere ideal for your future self your future family and your loved ones so yeah that's it for this video i hope you guys liked it and let me let me know in the comments any other future videos that you'd like to see and i will see you guys in my next video bye you