How much money should I have saved by 21? $31,668. Why is that? The median weekly earnings for teenagers aged 16 to 19 was $609, according to the BLS. Then using a 20% savings model for the 5 years between 16 and 21, you should save $31,668.
When I was 21, I saved close to $40,000 worth of money. That was a combination of scholarships, 2 jobs every school year, and saving as much money as I can on my internships. However, I know I’m in a minority of minorities because many of my college friends graduated with debt.
The guideline to save $31.7k by 21 is just a guideline. Other people are just in different paths of life. Some people choose to invest their time into university so they will be in debt by graduation and not with positive savings. Some invest their time into building a business.
Whatever the case is, the guideline of how much money should I have saved by 21? is only for people who work between 16 – 21. I personally think if you’re working and live at home, you should have a higher savings rate than 20%.
You have much more potential to save money because your expenses are lower than an adult’s. When I was working at Sears, I saved and banked one hundred percent of my after tax money because my parents took care of my food and living expenses.
The opportunities are much greater when you are in this age bracket.
How Much Money Should I Have Saved by 21? 3 Reasons Why
3 reasons why you should have saved $31.7k by 21 are below. You don’t have to be poor like every other 21 year old out there!
1) Minimal to No Expenses
When you’re 21 and live with your parents, you have minimal to no expenses. Even if you’re in college, you have minimal to no expenses because presumably, your parents help you out with your education and living costs. If you attend a private university, you may have less access to capital.
How much money should I have saved by 21? When you have minimal to no expenses, you have no excuse to not bank the majority of your paychecks and/or scholarships. The opportunities are always out there to earn more money, whether through paid work or scholarships.
I lived on a $5/day food budget in college. It was an investment into the future and I was willing to put in the sacrifice because that’s how seriously I took my future. You have opportunities and access to pay less money than anyone else in the world.
It’s time to take advantage of student discounts and university events around campus. Universities have enough money already.
2) Tremendous Energy to Work
How much money should I have saved by 21? You can save so much money because you have tremendous energy to work. When I was 21, I worked 2 jobs WHILE being a full time student. It was the most hours I’ve ever worked.
While I no longer need to work so many hours and put in so much effort, it was good to know I could’ve done so if I wanted to. Now, I care more about efficiency and getting more dollars out of my time than maximizing my pay.
However, when you’re 21, you have an endless amount of energy. Even if you sleep at 1am, the next day is not so bad because you are so excited and curious about what went on the next day. I personally thought I would continue to have the endless amount of energy to work.
That didn’t turn out to be the case and I’m learning just how much energy I lose throughout the years. You can easily take advantage of your energy in your younger years.
3) How Much Money Should I Have Saved by 21? Unlimited Time
When we’re young, we have unlimited time but no money. When we’re older, we have more money but we don’t have nearly as enough time. Time is the most valuable asset in the world. How much money should I have saved by 21? When you use your time efficiently, you can easily have more than $31.7k.
It’s what’s in your mind that matters in determining how much money you save by 21. The biggest regret of my life is not starting a business when I was 21. All others told me was to “focus on school and get good grades”. They never taught me how to make money.
Which is what matters by the end of it all. When you have unlimited time, it’s important to think of how you’ll spend your precious resource. Cut out any friends who drag you down from your money goals. It’s nothing personal, it’s just a business decision.
Leverage your time very well. That is the age in which your creativity shines the most.
How Much Money Should I Have Saved by 21? How to Get There
I can already hear many people who say, “saving $31.7k is unrealistic! There are full time employees who don’t even save that much!”. Below are the concrete steps on achieving the how much money should I have saved by 21? goal and guideline.
1) Bank Every Paycheck
When your expenses are minimal to none, you should bank every paycheck. I don’t care if it doesn’t seem like much now. There’s still no reason to purchase a $25k car just because you have 25 thousand dollars. Spending that much on cars is the biggest waste of money.
How much money should I have saved by 21? You should be banking and saving every paycheck that you can. I was earning something close to $6,000/yr – $12k/yr after tax from 17 – 21. I banked and saved the vast majority of that because what else was I going to spend money on?
You should be banking and saving as much as you can every paycheck if your living expenses are taken care of by scholarships and/or Mom and Dad. My parents gave me $5,000 per year to take care of my food costs and I stretched that money far.
When you have minimal expenses, there’s no need to waste money on extraneous things.
2) How Much Money Should I Have Saved by 21? Cut Down Expenses
I lived on a $5/day meal budget because I took advantage of every free food campus event. Furthermore, Elon Musk inspired me with his $1/day food budget ($2.50/day in 2022, adjusted for inflation). I thought if the world’s richest person kept his expenses that low to make ends meet, I can too.
There are plenty of ways to cut down expenses when you’re a student. Everyone just expects you to be poor because you have no income coming in. Companies woo students with amazing discounts. My Microsoft Products costed something like $50 for 3 copies because I was a student.
How much money should I have saved by 21 is only possible if you cut down expenses. There’s nothing wrong with living with Mom and Dad to save on rent while you look for more income generating opportunities down the road.
Many people look down on those who live rent free with Mom and Dad. Not me.
3) Ignore Your Friends
Your friends at your age are all worried about the wrong things. Some aren’t even worried about being the best student they can possibly be. Some are just worried about how they can talk to that cute girl in class. Or how they can’t wait for class to be over so they can go back to playing video games.
How much money should I have saved by 21? requires you to ignore your friends. If you want to be rich and get to the top of the food chain in the competition, your friends are not the inspiration. Some friends actually are inspiration for how you can take your life to the next level.
In college, there was a couple of friends who were like that. Those are the friends that I kept around and didn’t lose contact with. You are the average of the 5 people you surround yourself with. If your friend group is not inspirational, there’s nothing wrong with ignoring them.
Your goals and their goals are just different. Why is it hard to save money in America? One of the reasons could be your friend group.
4) Don’t Lose Sight of Your Goal
You goals are just different than other people’s. Other people’s goals are to spend as much money as they can and live in the now. Your goals are to protect your financial future and set your future family up for success. How much should I have saved by 21?
It’s more than possible to save $31.7k by 21 as long as you don’t lose sight of your goal. Not when your friends are making fun of you for saving. Not when you see your friends get brand new Teslas straight out of college. Your goals shouldn’t change, if they are especially important to you.
It would’ve been easy for me to give up when I saw my friends go to Europe for a vacation trip. Or when I saw them buy a vintage car. However, I didn’t let that suck me in. I protected my capital to no end and now I have $400k+ to show for it in my twenties, no less.
Your financial goals are some of the most important financial goals you’ll ever set for yourself. Never lose sight of them.
5) Think About Your Future Self
In my early 20s, all I cared about was my future self. I just wanted to create a life for my future self could be proud of and enjoy life in. I was willing to sacrifice anything and everything I possibly could so that my future self could benefit. It’s why I invested so much money in my early 20s.
It’s why I maxed out my 401k every year that I could. As I sit in my late 20s, I can 100% attest that it was completely worth it and I would do it all over again, if I could. Your future self is not that far away. A year passes by quickly. Five years pass by even faster. Funny how time works.
How much money should I have saved by 21? It’s more than possible if you think about your future self and nothing else. Your future is what matters. Not the past. Not the present. But your future. Too many people live in the present and today that they forget about tomorrow.
Sacrifice today for a better tomorrow. The rewards are well worth it.
6) Start a Side Hustle
How much money should I have saved by 21? is more than possible when you start a side hustle. You don’t have to rely on a 9-5 income to float you throughout your life. You can start a side hustle to supplement and boost your income to infinite potential.
A side hustle shouldn’t have a $500/month opportunity. It should have no ceiling of income growth. Side hustles not only give you money, it teaches you valuable skills. Getting paid to learn is a must and it’s an especially bigger must if you learn it yourself through side hustles.
Too many people clock out at 5pm, go back home, and watch TV. That’s not the right model. You should be hustling to get ahead. Not hustle so much that you burn out but hustle enough so your weekends get ahead from your peers and the ones above you.
The ones who are hungry surpass the ones who are already in power. Side hustles are a great way to get ahead. Your creativity is much higher when you’re younger.
7) How Much Money Should I Have Saved by 21? Get a Better Paying Job
No matter what others say, it’s more than possible to earn $50k straight out of high school. It all depends on who you’re willing to put yourself in front of and what choices and actions you take. If you already have a job, there’s opportunities to go for a better paying job.
It takes hustle because finding a job is a huge hassle. I personally do not like finding a job so much that I wouldn’t even try to look for a job even if it pays an extra 20 – 30%. It’s not worth it to me. However, when you do secure that opportunity that increases your income by 20 – 30%, then you upgrade your life.
How much money should I have saved by 21? means making the right money moves to elevate yourself upward even further. No matter what others say, you can pull yourself from your bootstraps and move upwards in life. There’s plenty of better paying jobs out there.
And who knows? It may just be higher pay with a lower workload as well.
8) Get Bank Accounts
You shouldn’t stuff all your money under a mattress. How much money should I have saved by 21 is one thing but where to store it is another. When you actually have savings to fall back on, you should get a bank account to store all that money in. It earns interest as a cherry on top.
In 2022, savings accounts started paying 3%+! That’s insane! Some bank accounts actually started paying interest that makes a difference. I’ve actually been getting passive income of $350/month for doing nothing but putting my money into my bank account!
It seems like a trivial thing but one way to boost your savings is to actually get savings accounts that boost your passive income. The Fed doesn’t want to keep the economy in a near zero interest rate environment any longer.
It’s time to take advantage of the changing times.
9) Track Your Savings
What you don’t measure and track doesn’t get improved upon. If you want to have savings by 21, you need to track your progress. I personally stopped doing this because I have other more important things to do with my time now. But for a solid 6 years straight, I tracked my net worth and savings.
Almost every day. Track your savings because you won’t even get to your destination without tracking where you’re going. How much money should I have saved by 21? requires you to track your progress. The financially illiterate does not even know what their net worth is.
Only the financially literate does. There’s a reason why that happens. The financially literate are obsessed with finance and moving up in life. They track where their dollars are going and how much dollars are coming in every single month.
You want to be a part of the financial elites.
How Much Money Should I Have Saved by 21? It’s Possible
Many people will see the how much money should I have saved by 21? and think just how impossible it is. That’s the difference between the ones who actually achieve their goals and who doesn’t. One will complain they can’t do it. The other will figure out how they can do it.
I personally worked like a dog to save up $40k by 21. I’m very proud of it because not even people in retirement has that much saved up. It took long hours and meticulous planning and saving to get there. People will say it’s an unachievable goal.
That’s why those people will never be at the top 1%. They complain they can’t get there when they 100% have the ability to get there. You don’t have to be like other 21 year olds. You can be different and be richer than them.
How much money should I have saved by 21? These days, 21 year olds are richer than their older counterparts because they have more creativity. They know how to make money outside of the traditional 9-5 job models. More younger content creators are born every day.
You may not have the most money when you’re young but you compete by having more time and creativity. When we get older, we are molded into thinking one way. To be like everyone else. It’s hard to differentiate yourself in that environment.
You can carve and make your own path.
How Much Money Should I Have Saved by 21? How to Have More
- Bank every paycheck
- How much money should I have saved by 21? Cut down expenses
- Ignore your friends
- Don’t lose sight of your goal
- Think about your future self
- Start a side hustle
- How much money should I have saved by 21? Get a better paying job
- Get bank accounts
- Track your savings
