Research suggests that those in their 30s are the most disciplined savers. It’s often a time that’s marked by greater financial security and planning for the long term. It means that your 30s are an ideal time to start increasing how much you put into a savings account, plus there are benefits for getting into the savings habit sooner.
According to research from Charter Savings Bank:
- Those in their 30s set aside 58% of their disposable income each month; compared to the national average of 42%
- With an average monthly disposable income of £486, the amount saved is £280
- Average total saving for those in their 30s is £10,212
There are many reasons why those in their 30s are setting a portion of their income aside each month. The survey found the top reasons are:
- In case of an emergency (44%)
- Short-term financial security (28%)
- Holidays (25%)
- Long-term financial security (23%)
- Home improvements (19%)
- Property deposit (16%)
- Retirement (15%)
Whatever your ultimate financial goals, taking steps to save at least some of your income can have many benefits. It’s a positive habit that could serve you well in the future, even if you’re focusing on short-term security at the moment. If you’re looking for reasons to step up your saving habit now you’re in your 30s here are four:
1. Start a positive savings habit
Like all habits, getting into the routine of regularly saving money can take a while. So, the sooner you start saving the better.
When cash is in your regular current account it can be easy to spend it without really thinking. Setting good money habits, such as tracking where you’re spending the most or immediately transferring savings when you’re paid, can help you reach your goals.
If you’re already in the habit of putting money away for a rainy day, it’s time to start building on this. If you’ve been diligently saving away for a few years, you hopefully have enough stored away to overcome emergencies. As a result, now is a good time to start looking at how you can maximise what you’re saving. You may find that investing is the right option for you. Alternatively, if your money is held in an easy access savings account, transferring it to an Individual Savings Account could provide better results.
2. Interest and returns are compounded
The longer your money is squirrelled away for, the better. If you leave your savings untouched, you’ll benefit from compounding, helping your money to go further.
This is where interest and investment returns are left, going on to generate returns of their own. As a result, your money will start to grow at a faster rate as time goes by. The compounding effect means the steps you take in your 30s can have a big impact on your finances over the long term.
One example of where this is often beneficial is your pension. As accessing your pension is likely decades away, your contributions, along with possible employer contributions and tax relief, can benefit from compounding for years.
3. Reflect your changing priorities
When you look back to what your priorities were just a decade ago, it’s likely they’ve changed immensely.
Throughout your 20s, you may have been focussed on your education, establishing your career and creating memories with friends. However, since then your goals may have shifted. Perhaps you want to purchase your own home, start a family or set up your own business. These priorities should be reflected in your money habits, including how you save.
Many milestones you may want to tick off in your 30s require money and financial security to achieve. As a result, saving is probably going to be an important part of your ability to tick them off. Likewise, as your priorities change, so too may the more efficient ways to store your savings. Keeping on top of your financial strategy and how it supports your goals is important as your aspirations change.
4. Improve your long-term financial security
While the research indicated that more people in their 30s are saving away to improve their short-term financial security, 23% are already doing so with the long term in mind.
Long-term concerns might seem far away, such as your retirement or supporting children through university, but taking steps to improve your finances with these goals can make it more manageable. When you look at your end goal for your pension, for example, it can seem like a daunting and even impossible target to reach. But break down the amount you need to save over 30 years can help turn it into a reality.
Your financial goals should include a mix of short, medium and long-term goals, allowing you to achieve fulfilment both now and in the future. It can be difficult to balance them but it’s an important part of achieving your aspirations.
If you’d like to discuss how you can improve your financial situation, please contact us. From advising on the most efficient way to save to projecting how your savings will grow over the medium and long term, we can offer you tailored advice and insights.
Please Note: The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.
