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  1. #1
    Senior Member Bamboo's Avatar
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    Default Typical savings for someone in their early 20s

    I was talking about this the other day with people and then it came up again.

    What amount of savings/money in the bank/cash is typical for someone in their early 20s? I feel like I save more than most people my age but I don't have a clear idea. Someone I was talking to asserted that not just most, but nearly all people my age (21) have no more than a few hundred dollars at any one time but that seemed low to me, but I do have many friends like that.

    How about people a little older, such as 23, 25, or 27, who (especially beyond 23) are working full time and have been living on their own for a while?

    This is all related to working on moving into an apartment of my own and figuring out investments. I'd like to have enough money to act as buffer so I don't have to worry about living paycheck to paycheck.

    -----------------------

    If you're in your 20s, are you broke? How have your living expenses effected your bank account? If you're older, how did things progress for you?
    Don't know how much it'll bend til it breaks.

  2. #2
    Senior Member Tiltyred's Avatar
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    Suze Orman is supposed to be good at this. She says some ridiculous thing like six month's expenses. Pfft. That'll be the day. I can't do it, but maybe you can ...

  3. #3
    Senior Member Bamboo's Avatar
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    I'll add:
    I work (variable hours, picking up odd jobs and handyman stuff). I'm not in school (taking time off college). I have about $12,000 in cash/checking account. I have no investments. I don't have a credit card or a credit line. I live with parents and pay minimal "rent" of $150 monthly, plus food and other expenses.

    I own my car and pay for gas, maintenance, and insurance. I'm on my parent's health insurance plan and will probably be moving to my own in a few years. Other looming financial expenses include higher rents and a bunch of stuff I don't need.
    Don't know how much it'll bend til it breaks.

  4. #4
    Senior Member Bamboo's Avatar
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    Quote Originally Posted by Tiltyred View Post
    Suze Orman is supposed to be good at this. She says some ridiculous thing like six month's expenses. Pfft. That'll be the day. I can't do it, but maybe you can ...
    I think I have 6 months expenses. I dunno really.

    I haven't been taking this seriously until now.



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  5. #5
    Senior Member Trentham's Avatar
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    The typical amount for someone in their early 20s? $0.

    The fact that you save anything is good. 6 months expenses is pretty phenomenal. Keep it up - you won't regret it.
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  6. #6
    insert random title here Randomnity's Avatar
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    There's not really much point in comparing, situations will differ so much (school situation is the biggest one). All you can do is make sure you do your best to make yourself happy with your situation. As long as you're saving something every month (spending less than you make) you're doing better than a lot of people our age. It sounds like you're doing well (though college will eat up 12k in no time, as you know).

    I'm in an odd situation personally, because I have had a very large amount of money in the bank for some time (student loans pay out a fixed, huge amount) but I owe roughly the same amount in student loans (to be paid when I graduate - will be roughly 4 years if I stay for my phd). I'm not willing to gamble it in the stock market over such a short term and CDs/etc have such low rates right now, I'm not bothering yet. I could potentially use it as a downpayment for a house sometime, if I was willing to buy a house before I finish school (unlikely since I may have to move for a job).

    It's actually been a negative thing in some ways though because I've always had enough money to buy whatever I wanted - although it's essentially an interest-free loan. I tend to be fairly frugal in general but haven't gotten into the habit of following a budget or making sure I spend less than X every month, I just kept everything in my savings and transferred every month to pay my credit card bill. So I've started treating my chequing as my "living wage" and trying to at least stay within my wages every month (minus 20% auto-transferred to my savings). I'm not sure how successful I'll be yet, I might have to work harder at it. I use my credit card for everything, and pay it off every month, but sometimes it's hard to keep track of how much I've spent in the month. But so far (for 1 month) I still have a lot left in my account.

    If you're interesting in personal finance there's a blog I've been reading for the past year or so called thesimpledollar.com which has some really interesting ideas (though some kinda crackpot ones too).

    ps I'm 24 and have been living on my own for maybe 4 years? still in school forever and ever but at least now (1 year into grad school) I get paid enough to live on, mostly because my rent is so ridiculously cheap.
    -end of thread-

  7. #7
    Senior Member Chloe's Avatar
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    i am 23. i have 5000 EUR, i guess that's about 7000 $... that's the money I got in HS - scholarship for mathematics. i got 8000 spent 3000 on traveling. Other than that, I spend right away all I earn.. and i cant work much next to medicine anyway.

    i plan to spend rest of my money to live from that so i can finish school. with 5000 eur i can live here (if i dont have to pay for apartment ) for 15 months lol.

  8. #8
    Senior Member Bamboo's Avatar
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    Quote Originally Posted by Trentham View Post
    The typical amount for someone in their early 20s? $0.

    The fact that you save anything is good. 6 months expenses is pretty phenomenal. Keep it up - you won't regret it.
    Well I don't have much of a savings strategy except that I know that whatever I'm gonna be doing, I'll probably want money for it. But I wonder at what point is working harder and not spending just not worth it. Clearly, this is all subjective and dependent on what I want to buy, how much I want to work, and the comparative values of either. But getting an idea of what most people are doing is helpful.

    I think $0 is low.
    Don't know how much it'll bend til it breaks.

  9. #9
    Senior Member Trentham's Avatar
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    Quote Originally Posted by Bamboo View Post
    But I wonder at what point is working harder and not spending just not worth it. Clearly, this is all subjective and dependent on what I want to buy, how much I want to work, and the comparative values of either. But getting an idea of what most people are doing is helpful.
    As someone who is 36 years old and has been on both ends of the financial spectrum, the best advice I can give you is to stay the fuck out of debt. You'll be fine if you do that, savings strategy or no. Pay cash for everything but housing and transportation (and put as much cash as you can muster into those).

    I think $0 is low.
    Probably years of cynicism at work, but I will say this: I've worked in the finance industry, and in the US at least there are a shit-ton of people who do not have anything approaching $12,000 worth of savings. That's folks of all ages. I think...no, I know, you're doing very well for your stage in life. Most of your neighbors would go into full blown panic mode if they missed a few paychecks.

    One advantage you have is that the credit culture of the mid-late 90s thru early 00s has been curtailed. People aren't burying themselves in debt the way they did in those days.
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  10. #10
    Aquaria mrcockburn's Avatar
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    I'm 20, and I only have $700 in my savings and a few thousand in a CD.

    I'm horrible with money. Absolutely terrible. I've been working since I was 14, so I should have a lot more. I mean, I make rent and bills, but whatever I have left over...

    Not only that, I even lose track of when I run out of spending money, so that means I get slammed with overdrafts or I max out my credit card. (Which has only a $500 limit, but still. It's the issue of not keeping track of my finances.)

    This is the #1 thing that makes me question my J-ness. But I see you're a P and you're doing way better than I am.
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