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How Much Money Should I Have Saved By 21? Average Savings For a 21 Year Old

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Have you ever wondered, “How much should I have saved by 21?” It’s a question that can cause both excitement and anxiety as you stand on the brink of true adulthood. By 21, you’re not just dipping your toes into the world of financial independence; you’re diving in headfirst.

The answer isn’t just about a number—it’s about setting the stage for a financially secure future. Whether you’re a college student, a budding entrepreneur, or stepping into your first full-time job, knowing the benchmarks can help you navigate the waters of personal finance with confidence.

How Much Should I Have Saved By 21
How much money should a 21 year old have saved?

At 21, the financial seeds you plant can grow into a robust safety net, a down payment for a home, or even the early foundations of retirement savings. Savings goals at this age are less about the final figure and more about developing healthy saving habits and understanding the value of a dollar saved today.

In a world where financial advice is often complex and overwhelming, let’s break it down into simple, actionable steps. With nearly three decades of experience guiding young adults like you, I’m here to share insights that are both practical and attainable.

So, what’s the magic number? While individual circumstances vary, a common guideline is to aim for one year’s worth of salary saved by the time you hit 30. That means at 21, you should be on your way—starting with an emergency fund, exploring investment options, and perhaps contributing to a retirement account.

Let’s embark on this journey together, and by the end of this article, you’ll not only have a clearer picture of your financial goals but also the tools and confidence to reach them. Ready to take control of your financial destiny? Keep reading to set the foundation for a prosperous future.

Key Takeaways of How Much Money Does The Average 21 year Old Have

  • By age 21, assuming you have worked full time earning the median salary for the equivalent of a year, you should have saved a little more than $7,000
  • Couples in their 20s should aim to have about one time their salary saved for retirement accounts.
  • By age 30, it is recommended to have the equivalent of your annual salary saved.
  • By age 30, it is suggested to have at least $14,115 to $28,230 in savings and $61,937 in retirement savings.
  • The average retirement savings balance for those under 35 is $30,170.

How Much Should I Have Saved By 21

At the tender age of 21, the question of savings is not just about numbers—it’s about setting a precedent for your financial journey. The search intent here is clear: you’re looking for a benchmark, a way to measure if you’re on the right track with your savings.

People like you who tend to look for this article are hungry for knowledge on how to save, how much to save, and why it’s important. I will use my experience as a financial planner and provide you with information that is relatable and actionable.

Setting the Stage for Financial Success

Did you know that the average full-time worker aged 16 to 24 earns about $690 weekly? That’s $35,880 a year, as reported by the U.S. Bureau of Labor Statistics. If you’re footing the bill for all your expenses, that doesn’t leave a lot of room for error—or for savings. And let’s face it, many 21-year-olds haven’t yet hit that full-time salary mark.

But here’s a nugget of wisdom: save 20% of your income for retirement, emergencies, and future dreams. If you’ve been earning the median income full-time for a year, that’s over $7,000 in your savings account.

The Savings Snapshot for the Young Adult

How much should you have saved at 21? It’s a question that looms in the minds of many young adults. The Federal Reserve Board’s Survey of Consumer Finances may not pinpoint 21-year-olds, but it does tell us that the median savings for those under 35 is $3,240, with an average of $11,250. Yet, these figures are just a starting point, a baseline from which to grow.

The Reality for the Young Saver

  • Income Variability: At 21, many are just starting out in their careers or may still be in college, often resulting in a lower income.
  • Living Expenses: The cost of living can take a significant bite out of one’s ability to save, especially in urban areas.
  • Student Debt: With student loans being a common hurdle, they can delay the ability to start saving early.
  • Financial Literacy: A lack of financial education can leave young adults unprepared to manage and save money effectively.
  • Essential Costs: High expenses like rent and car payments can restrict the amount one can put aside in savings.

The Importance of Starting Early

It’s recommended to have between 3-12 months of expenses in a high-yield savings account. While it’s common to have modest savings at this age, aiming for at least $1,000 for unforeseen expenses is a wise goal.

Have you ever faced a financial surprise that you weren’t prepared for? You’re not alone. Many 21-year-olds are in the same boat, with 58% not having any savings at all (according to the CNBC Your Money Financial Confidence Survey). But here’s a piece of wisdom from decades of financial planning: start small, but start now. Even a modest savings habit can snowball into significant financial security.

With nearly three decades of guiding wealthy families and business owners, I’ve seen firsthand the power of early savings. It’s not just about the amount—it’s about the habit. Starting your savings journey now, no matter how small the step, sets the stage for a more secure and flexible financial future.

Why Save Early? The Savings Strategy for the Young Adult

Starting to save early is like planting a seed for a tree under which your future self will enjoy the shade. An emergency fund is your financial safety net, ready to catch you when life throws surprises your way.

And it’s not just about stashing cash under your mattress; it’s about smartly allocating funds to places where they can grow—think compound interest and retirement funds like a Roth IRA.


  • The Early Saver starts at age 18 and contributes $5,000 annually for 10 years.
  • The Late Saver starts at age 30 and contributes $5,000 annually for 25 years.
  • Both accounts earn a 10% annual return, compounded yearly.
  • Contributions are made at the end of each year.
AgeEarly Saver: Starts at 18 for 10 yearsLate Saver: Starts at 30 for 25 years
29Stopped Saving – Grows to $101,921.42$0
30Grows to $112,113.56$5,000
65Grows to $1,378,905.57Grows to $820,846.69

Key Takeaways:

  • The Early Saver contributes a total of $50,000 over 10 years.
  • The Late Saver contributes a total of $125,000 over 25 years.
  • Despite contributing less than half the total amount, the Early Saver ends up with significantly more savings by age 65 due to the power of compound interest and starting early.

In conclusion, while the average savings for a 21-year-old may vary, the act of saving is non-negotiable. It’s a critical step towards financial independence and resilience. Remember, it’s not about hitting a number; it’s about starting a journey. So, ask yourself, what can I save today to better my tomorrow?

Your Savings, Your Future

By 21, your savings should be a reflection of your life’s ambitions. It’s not just about what you save, but how you save it. Budgeting isn’t a chore; it’s a strategy to maximize your hard-earned money.

And while the concept of retirement may seem light-years away, starting now means you’re ahead of the game.

Saving: A Habit Beyond Numbers

The true value in saving lies not in the amount but in the consistency of the action. It’s a lesson in priority, habit formation, and long-term vision.

Consider the case of my sister-in-law. As a teen, she was an anomaly, owning a 401(k) while her peers had no thoughts of retirement. Initially, it was a quirk she laughed about. Now, as an adult, she appreciates the early start. Her teenage savings have grown, and so has her gratitude towards her father’s foresight.

This transformation from humor to thankfulness underscores a vital financial principle: start saving early, no matter the amount. It’s the habit of saving that counts, turning small deposits into significant sums over time.

Action, Habit, Outcome: Start saving, maintain the habit, and the outcome will be financial stability. Let’s embrace this practice today for a secure tomorrow.

Take Action

So, what’s your next move? If you haven’t started saving, now’s the time. And if you have, are you optimizing your savings? Remember, it’s not about hitting a magic number—it’s about progress, not perfection.

With decades of experience in financial planning, I assure you that the steps you take today are the ones that will pave the way to a secure and comfortable future. Let’s not just dream about financial independence—let’s make it a reality.

Start Your Savings Journey Today

Savings Goals for 21-Year-Olds: A Visual Guide

Savings Goal: Establishing a Target

  • Emergency Fund: Aim for 3-6 months of expenses.
  • Retirement Savings: Start with what you can, even if it’s small.
  • Major Purchases: Set milestones for items like a car or down payment on a home.
AgeEmergency FundRetirementMajor PurchasesNotes
21$1,000 – $10,000As much as possibleVariesStart small, aim high
Savings Goals and Benchmarks

Key Savings Metrics

  • Average Savings Rate: 4-4.5% (BEA).
  • Median US Savings: $5,300.
  • Suggested Savings by 21: At least $7,000.
Average Savings Rate4-4.5%Baseline for comparison
Median US Savings$5,300Benchmark for personal savings
Recommended Savings by 21$7,000Goal to surpass the median

Savings Reality Check

  • 58% of 21-Year-Olds: No savings account.
  • Your Savings Journey: Personalized, not a comparison game.
Percent of 21 year olds with savings

Steps to Determine Savings Needs

  1. Calculate Expenses: Total up 3-6 months of living costs.
  2. Set Milestones: Break down large goals into achievable steps.
  3. Seek Expertise: Consider a financial advisor for personalized plans.
How a 21 year old should allocate their income
How a 21 year old should allocate their income

Starting Your Savings

  • Automate: Set up automatic transfers to savings accounts.
  • Retirement Accounts: Contribute to a 401(k) or IRA regularly.
  • Vanguard Automatic Investing: An example of a tool to facilitate automated savings.
Step by step how to automate your savings
Step by step how to automate your savings

The Cornerstone of Financial Well-being: A Savings Account

Why a Savings Account?

Ever found yourself wondering why everyone insists on a savings account? It’s not just a rite of passage into adulthood; it’s a foundational block of personal finance.

How Much Can you save by age 21
How Much Can you save by age 21

Mastering Money: Budgeting Basics for Young Adults

Budgeting: Your Financial Blueprint

Are you ready to take control of your money? For young adults stepping into the world of financial independence, budgeting is your secret weapon. It’s the tool that helps you manage your earnings, steer clear of debt, and save for the future.

Crafting Your Financial Game Plan

Think of budgeting as the compass that guides your financial ship. It’s not just about tracking expenses; it’s about creating a plan that aligns with your financial goals and lifestyle.

  • Managing Expenditures: By understanding where your money goes, you can identify areas to save and make room for more important financial goals.
  • Allocating for Savings: Every budget should have a line for savings. It’s the portion of your income that you pay to your future self.
  • Avoiding Debt: A well-planned budget keeps you within your means, helping you sidestep the pitfalls of credit card debt and loans.
  • Investing in Your Future: With a budget, you can plan to contribute to an investment portfolio, even in your 20s, setting the stage for financial growth.

Your Next Move

Start by tracking your income and expenses. Then, set clear savings goals. Remember, a budget isn’t a restriction; it’s a liberation from financial stress.

Laying the Groundwork: Investment Portfolio Basics in Your 20s

Investing Early: The Path to Prosperity

Have you ever dreamt of financial freedom? Starting an investment portfolio in your 20s isn’t just smart; it’s a powerful move towards that dream. It’s about setting the stage now for a future of wealth and stability.

Creating an investment portfolio in your 20s is like planting a tree; the best time was yesterday, the next best time is now. It’s your launchpad to capital growth and fiscal prudence.

  • Diversifying Assets: Spread your investments across different assets to balance risk and reward according to your risk tolerance.
  • Embracing Compound Interest: Understand that time is your ally. The earlier you start, the more you benefit from the magic of compound interest.
  • Setting Goals: Align your investments with your long-term financial goals, whether it’s buying a home, starting a business, or retiring comfortably.

Taking the First Step

Begin by educating yourself on investment basics. Consider low-cost index funds, robo-advisors, or consult a financial planner. Remember, the journey to wealth starts with a single step.

Embracing the Future: Early Retirement Planning

Ever wondered if your future self will thank you for your financial choices today? Retirement planning in your 20s isn’t just wise—it’s a strategic move for lifelong peace of mind.

Why Wait? The Early Bird’s Retirement Planning Guide

Charting the Course for Retirement

When it comes to retirement planning, starting in your 20s can be the most impactful decision of your life. It’s about more than just saving money; it’s about creating a future that’s financially secure and free from worry.

  • Investing in Your Future: Diversify your assets early to build a robust investment portfolio that grows with you.
  • Consistent Savings: Make saving a habit. Even small amounts can turn into significant wealth over time with the power of compound interest.
  • Retirement Funds: Explore options like 401(k)s and IRAs to maximize your retirement savings.

A Secure Path Forward

Taking action now means you’re paving a path to a retirement that’s not just comfortable but also empowering. It’s about giving yourself the freedom to live life on your terms when the time comes.

Frequently Asked Questions For The Average Savings For 21 Year Old

How Can I Start Saving at a Young Age?

To start saving at a young age, I can set aside a portion of my income regularly, create a budget, and prioritize saving over unnecessary expenses. It’s important to establish good financial habits early on for a secure future.

What Are Some Common Financial Mistakes Young Adults Make?

Some common financial mistakes young adults make include overspending, not saving enough, and not budgeting properly. It’s important to prioritize saving, live within your means, and educate yourself about personal finance to avoid these pitfalls.

How Can I Determine My Individual Savings Goals?

To determine my individual savings goals, I can consider factors like my income, expenses, and financial priorities. Using age-based benchmarks, savings percentages, or online calculators can help me figure out how much to save.

Are There Any Specific Strategies for Saving Money as a College Student?

As a college student, I would recommend creating a budget, tracking expenses, and saving a portion of your income. Look for opportunities to cut costs, like buying used textbooks or cooking at home.

What Are Some Tips for Managing Expenses and Saving Money While Living on a Tight Budget?

Managing expenses and saving money on a tight budget can be challenging, but it’s possible. Prioritize needs over wants, create a budget, track spending, look for ways to cut costs, and save a portion of your income each month.

Should I prioritize saving money over paying off student loans?

It’s essential to find a balance. Start by building an emergency fund to provide a financial safety net. Once that’s in place, you can allocate funds towards paying off student loans while continuing to save.

What should I do if I don’t have enough money saved by age 21?

Don’t stress if your savings aren’t where you’d like them to be at 21. Begin by setting achievable savings goals, budgeting wisely, and exploring additional income streams to enhance your savings.

Should I focus on building an emergency fund before saving for other goals?

Yes, an emergency fund should be a top priority. Aim to save three to six months’ worth of expenses to ensure you’re covered for unexpected events before pursuing other financial goals

How can I make saving money a priority in my daily life?

Integrate saving into your routine by automating transfers to your savings account, reducing unnecessary expenses, and treating saving as a non-negotiable daily practice, much like your morning coffee ritual.

Next Steps: The Journey to Financial Freedom Begins Today

The Power of Early Financial Planning and How Much Does The Average 21 Year Old Have Saved?

As we draw the curtains on our journey through the essentials of early financial planning, let’s reflect on the key takeaways that can transform your twenties into a launchpad for lifelong prosperity. Remember, the art of saving and investing is not just about accumulating wealth—it’s about crafting a future that resonates with freedom and fulfillment.

  • Your Financial Compass Whether you’re a student, a young professional, or an entrepreneur, the roadmap to financial independence is clear: save diligently, invest wisely, and plan strategically. These aren’t just buzzwords; they’re the pillars upon which your financial house stands firm.
  • The Essence of Saving At 21, your savings are the seeds from which your financial tree will grow. It’s not about the amount but the habit. Start small, think big, and watch as your savings multiply through the wonders of compound interest.
  • Investment: Your Growth Engine Your investment portfolio is your ticket to capital growth. By diversifying your assets and embracing the power of compound interest, you’re not just saving—you’re building a legacy.
  • Retirement: A Visionary’s Game Retirement planning is a visionary’s game, played best by those who start early. With each contribution to your retirement fund, you’re not just planning for an age; you’re planning for a lifestyle.
  • Gratitude for Your Engagement Thank you for taking the time to navigate these financial waters with us. Your engagement and proactive approach to financial literacy are the first steps towards a future where financial worries are a thing of the past.

Are you ready to take the next step? Sign up for our newsletter for exclusive financial content that will guide you further down the path of financial enlightenment.

As you stand on the threshold of financial independence, ask yourself: What financial legacy do I want to leave for my future self? Let that question guide your actions today.

Remember, the journey to financial freedom is a marathon, not a sprint. Start today, and let each step be a stride towards a future of abundance and peace of mind.

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Note: The content provided in this article is for informational purposes only and should not be considered as financial or legal advice. Consult with a professional advisor or accountant for personalized guidance.

Michael Ryan
Michael Ryan
Who Am I? I'm Michael Ryan, a retired financial planner turned personal financial coach. And author and found of blog. My advice is backed by decades of hands-on experience in finance and recognition in esteemed publications like US News & World Report, Business Insider, and Yahoo Finance. 'here'. Find answers to your financial questions, from budgeting to investing and retirement planning, on my blog My mission is to democratize financial literacy for all.