How Much Money should i Have saved by 21?

“How Much Money Should Have I Saved By 21?”…damn good question, right?

Well, I am no more in my 20s since a long time already… but, believe it or not, there was a time when I was there!!😁

No, I won’t annoy you with my whole story! But I do can provide some references to help you have a solid perspective on this topic.

Let’s Get Started…

Bear in mind that the subject is heavily influenced by the living conditions present in your country.

Other variables are your family status an your education. The job market of the area where you personally live plays a big part here too…

That Is To Say, In Plain English 😁 :

In general, If you choose to go on with school, still live with your parents and you have no side job,  then Ma&Pa should be in debt for something like $45,000 (US) / € 4,000 (Germany)

If you started working around 16 years of age instead, you still live with your parents and have quit school, you could have as a reference  $32,000 in your account as a US young citizen as opposed as €40,000 if you live in South Germany..  

If you still go to school but also have a side job while still living with your parents, you should score around $10,000(in US) or €14,400 (in Germany) in savings.

If you started working at 16 years of age but you have your own apartment, living as a single,  you could pretty much have nothing or modest sums like $3,000(in US) or €4,000 (in Germany) in your name.

If you leave alone, go to school and have a side job to provide for your expenses, your account will be zero…

Maybe something more or something less related to your own expenses (car, cellphone, etc.) and how you choose to manage your money. But you will most likely still need a substantial help from your parents to reach the end of the month.

(For further reference I included a column with data from Italy. Those numbers come from combining my personal experience with that of a large number of family people, friends, job-mates I came in contact with).

Let´s Talk Reality…

Now, this will be maybe unpopolar but :

As you can see this is not a simple answer because it deals with various aspects of your situation that will be different from that of many others.

For instance, the costs of schooling (University) are incredibly high in the United Stated when compared to Gemany.

Here you can attend most Universities for free or a small fee for enrollment and administrative costs. (Then of course books and study materials are mostly on you).

Another example : it is really difficult nowadays to find a reliable job in the Center-South zone of Italy. And since the demand is gigantic and the supply is low, the average salary is also very low when compared to germany for example. Lidl, a popular supermarket-chain in germany offers a gross retribution of €14 minimum per hour to any employee.

(Which equates approximatively to a net of €1,650/month).

In Pescara (Italy) you get an average of €900-1200/month (!!!) for a similar job….enough said…

Some Personal Experiences

(Just 2 Cents on my personal story : at 21 I was living “alone” – with 2 roommates – in a  small room in Pescara – Italy. I struggled to find a job as a dental technician with my fresh from school qualification (never succeeded in that..). I was teaching guitar and playing the very few live gigs available in my area to cover my costs and afford food…

Nevertheless, I still managed to set aside around €2,000 in savings in two years. And I guarantee you, I am no superhero at all – but I was extremely cheap, counting on every Cent.

(I was also blessed with a girlfriend that made no pressure on me for parties and expensive gifts… Yeah, the woman at your side can make you or break you! 🙂)

By the way, are you interested in how to be more productive and stop wasting time? Then let me urge you to follow the link and check the article!! 😊

Is Location Important For My Income?

Most definitely. You cannot in any way compare the average salary as well as the cost of living, say, between Zürich in Switzerland and Catania in Italy.

…or New York in the US as opposed to Dakar in Senegal.

That brings two important points here :  

Number One : When reading or receiving financial advices, or anything related to your money, make sure that the informations are still relevant for you and applicable to the situation you have in your area.

This is the reason why we are using flexible concepts here. (E.g. the salary perceived per month in the referenced area as a base on which to do our calculations.)

A salary is subject to ample fluctuation depending on the job and its location. So it will automatically adjust for these two variables and thus remain an objective data to start from.

A Little Rant!

Number Two : (and this will do no good for my “popularity”…).

And this choice was demanded by the social/economical condition of my country of birth (Italy).

We were a family with young children. Me and my wife were working to design a sustainable future for our kids.

I WARMLY encourage you not to feel confined in the boundaries of “your block”, “your town”, or “your country”.

Once you choose to take control of your life these concepts become nothing more than conventional words.

And you can ignore them entirely if they do not contribute to the goals you established for yourself and your loved ones.

Hey, there are really no boundries…Especially if you are not in your 30s yet, there are wonderful opportunities waiting for you somewhere else on the globe (check out Australia and New Zealand for instance).

Of course you do not have to move if you are satisfied with what your particular area has to offer, but never allow inherent difficulties in your town or even in your country to steal from your right to grow to the best expression of yourself.

I moved at 44, having nobody to help me but myself and not knowing a single word of german

(“Nevermind maxx, take it easy Bro´, you can speak fluent english, you´ll have no problems man”…Yeah, sure!!!…).

Ok, end of today´s rant, but be warned. no excuses here (in your own best interest).

How Much Money Does an Average Person Have Saved?

To answer directly to the question and give a frame of reference : from this article from Forbes regarding average savings, updated in July 2022…

From these data, we can conclude that although the informations about the goods of saving money are available to anyone at the touch of a screen (or reading some pages for the “less fortunate” ones), we as a whole are not making that much of a job in turning those knowledge in results. And this is worldwide, with a few noticeable exceptions like Japan, where the savings culture is way ahead compared to the US or Europe.

So, according to the official data, give yourself a break my friend, but keep moving ahead as well. 🙂

But, do you feel scared from the scarcity in your bank account? Well, this could be a good thing indeed to push you to find solutions to improve your overall income or your money-saving skills (because it is something that we all learn along the way…).

The Role of The Environment

But take some time to reflect on the reason why you are scared.

Is that because for “today´s standards” set by the most recent YouTube influencer, your performance is way under average?

Or maybe because you want so badly to prove to your family or your friends that you are smart enough to make it, and so you are worthy of their love and appreciation?

Do you want to impress your girlfriend or a woman you like?

Or are you comparing yourself to some successful individual you read about in one of your good books?

(Side note from myself : I ALWAYS felt like a dumb turkey while reading the outstanding writings from Jim Rohn, Tony Robbins or the late Napoleon Hill…

I feel like an illiterate infant as I read again the works of Robert Pirsig or the italian Stefano Benni. And I always will…).

Listen : nobody knows better about you than yourself. Nobody will be interested in your life story after a certain extent, not even your parents. We are all too much concerned with our own happenings to care about others for an extended period of time. Got it? Great, let´s move on…forgive me for being a bit brutal here.

If there is somebody´s opinion of yourself you have to care about, it is just yours. And instead of being selfish, doing so can bring you in the position to donate the best yourself possible to anyone you want to.

Are You Saving Too Much?

Great question don´t you think? This will need some thinking out of the conventional box of “saving money is healthy for everybody”.

Wouldn´t be reasonable to think instead that saving is great if it makes your goals more reachable? And, is this always the case?

I would suggesting you something of value. And even more If you are young enough not to be responsible for anybody else than yourself,

Maybe you still live with your parents, and you can control your expenses…

Do not waste this ones-in-life opportunity to try to build aggressively your future by

Investing in yourself first.

The Best Investment Of All!

What I mean by that is to define your endgame in detail and then spend what it takes in making it a reality.

Pay for classes or mentoring if you need to. Do not forget that knowledge is the one commodity you can buy now and use forever.

$1000 in good tuition can definitely make you ripe hundreds of thousands in the near future, especially in this digital era we are experiencing.

The vast majority of your peers have absolutely no idea about where are they going….

Now, it is possible that you won´t make it big at the first attempt. But what you are going to learn is invaluable and will contribute to your growth as an Entrepreneur.

Undecided about where to start? why not using time smartly? Read more my friend….

Ok, but Really, How Much is Too Much in Savings?

Without getting too technical here, you are saving too much if your money saved is not performing enough to cover Inflation at least = you are losing money as time goes by…

Let´s start by noticing “the wonders” of the data from October 2022…

Thanks to the overall bad performance of the economy worldwide, bombarded by two full years of Covid19 and the recent war in Ukraine, the inflation has reached 7,7% in the USA and circa 11% in the Eurozone…holy crap!

Now, since the current rate of interest the banks pay on deposit accounts is very close to 0%, there is very little you can do about that…

So, what about allocating the majority of your cash in a more lucrative class of assets?

The choice here is massive : Investments in financial markets such as Bonds, ETFs, Cryptos and the like.

Or maybe Real Estate, Precious Metals and Stones…

Or the smartest and most lucrative of all, Yourself, as we discussed a few lines before.

Ok, But How Do I Start??

Starting investing in financial products is not difficult at all. You can learn a lot just by buying a small amount of a solid ETF, and letting it run for a few months.

Your job is to monitor it week after week to learn more about that particular asset. (And the financial markets in general).

You might even get so hooked to the point of finding your personal mission in becoming a Financial Trader!

As a competent and wildly profitable professional trader you solved any investmentissue for good!

(If you commit your a** to it and be able to stay laser-focused on this only for a few years…)

What is the SPX500? What is an Index? What does “bullish” mean?

Let me know in the comments if you are interested, I will be pleased to write a post on the topic.

Conclusion

I hope I have provided some true value here as we discussed the subject of saving money.

I hope also to have provided some value in an uncommon and hopefully more useful way.

This is different from what you normally find on the web. (building a 6-month emergency fund, basic budgeting or the 50/30/20 rule).

In all reality, the concept of saving has a meaning only if you are interested.

It takes guts to have a plan for yourself and you serenely commit to it.

You have my resoect man! Stay smart enough to make the appropriate adjustments as you move along the path…

(Here I expanded a bit more on the concept of Commitment and the wonders it can work for you, no matter your actual situation).

We have seen how, though saving money is a popular concept, still the vast majority of people worldwide are unable to systematize it in some way.

This is mostly for a lack of commitment, we rely heavily instead on spending for fast pleasures.

We also discussed the important role of location.

We expanded then more deeply in what I found to be the best way of all to invest your money for spectacular returns for the rest of your life

…again, if you stay interested!

Well, thank you for reading this far. I would be pleased to know your opinions on the subject.

Write what’s on your mind and every question you have in the comments!

Talk soon

maxx