It is clear that the savings goals are not the same at 20 than at 60. It is obvious that as the years go by the objectives change. There are some studies of the European association of financial-wealth advice and planning that suggest how much of your salary you should save according to your age, taking into account that having a good savings plan that adapts to the needs of each age is one of the sa alternatives to meet our goals at every stage of life.
Savings at 20:
If we think of an optimal case, around the age of 20 you can get your first job and you are finishing your university or tertiary career if you decided to specialize in something. At this age you probably think of traveling, buying a car or becoming independent and moving to live under your own roof. These ideas are great! However, you still don’t have a lot of work experience and this can make it harder for you to get a stable job.
You are not expected to have many savings
Ideally, you can save 10% of your salary to have a mattress and get into the habit of saving money.
Surely you have finished or are studying the last subjects of your career. Possibly you are already in a couple and think about a few years maybe to enlarge the family and have your children. Unlike the previous decade, this is the age at which we began to consolidate in the world of work, so it is time to improve the game of finance. It is time to generate more money, save and above all stay away from debt. The capacity to save improves with our work performance. We should be able to allocate between 15 and 20% of our income to savings. Unless you are about to buy a house and need a mortgage loan.
Savings at 40 years:
The income received at this stage usually follows the upward trend. But expenses also tend to increase, especially if you have children and you have to pay for education. You also have to keep paying the mortgage if you could buy your house, but the savings objective increases to 25%, which will give us a safety mattress in case of any unforeseen event.
Savings at 50 years:
This situation draws a favorable scenario for savings which should be around 30%
It is likely that at this time many people have finished paying the mortgage, so they have greater liquidity. The children take their first steps to become financially independent . This situation draws a favorable scenario for savings, which should be around 30%.
Once the 60s barrier is crossed, it can be more difficult to save because the moment of retirement is “just around the corner”. The effort, therefore, must be made before, when you are active and according to the income available to avoid having to depend on a family member during your old age.
Everyone’s life is not that linear (couple-house-children) however, planning and investment decisions are essential to achieve our goal of increasing our savings buffer beyond any life decision you make.