Money at 30: Savings Milestones for Millennials

It seems that most of the personal finance articles you read these days are about one thing: getting out of debt. That’s certainly understandable considering that the credit card debt in the U.S. is headed toward $1 trillion this year and that student loan debt — perhaps the biggest financial concern among Millennials — even surpasses that figure. However, while paying off your debt is an important and noble goal, so is having money on hand for your both your near and far off future.

Your savings shouldn’t suffer even when you’re paying down debt. In fact not setting enough money aside for yourself is a surefire way to end up in even more debt and deeper financial trouble. That’s why I thought I’d highlight three savings milestones that Millennials should strive to reach as soon as possible:

Having an emergency fund

Ever wonder what would happen if you lost your job tomorrow? It’s a scary thought to be sure and one that more or less inspired my wife’s and my exodus from Los Angeles, where our rent was more than double what it is today. While we were able to afford our day to day lifestyle, one little financial hiccup would have hit us hard. That’s why we choose to move somewhere a lot cheaper and start building an emergency fund.

Finance experts aren’t in complete agreement about how much you should have in your emergency fund but a commonly touted figure is enough to cover three to six months worth of essentials. This means having enough to pay up to six months of rent, utilities, gas, food, and any other must-pay bills in your account. Depending on where you live and what kind of debts you have (including car payments or student loans) this could be a pretty massive number — rent in some cities alone will put you over five figures — so, if you’re really struggling to make it work, you may want to consider moving to a more affordable area à la yours truly.

Seriously saving for retirement

Admittedly when it comes to saving for retirement there are really no set milestones to reach per se. However there are some major savings goals you should absolutely strive to hit. 

The first goal you should have is to take advantage of any employer matching offered to you as part of your job. Be sure to look into what the maximum percentage your company will give you for your 401(k) and how much you’ll need to contribute to nab all that free money. Keep in mind there may be a vesting period, meaning you won’t get to keep all those matching funds if you leave before a certain date, but it’s definitely still worth signing up for.

Another worthy goal is to open a Roth IRA in addition to your 401(k). What’s great about Roth retirement accounts is that you pay the taxes upfront, allowing you to take your money and gains out tax-free when you retire. There are limits to how much you can contribute to your account each year and so, if you’re really doing well for yourself, perhaps matching that threshold could be another savings goal.

Undoubtedly the biggest reason you want to start saving for retirement, like, yesterday is because of this helpful thing called compounding interest. Put simply, by saving earlier, you’ll end up with a lot more money not only because of your additional principal contributions but also because your interest will earn interest. Don’t believe me? Try experimenting with a retirement calculator to see how big of a difference your savings can make.

Having a “full” down payment for a house

This is currently the milestone my wife and I are chasing… even though we’re not 100% sure we even want to buy a house just yet. In some ways it seems like buying a home makes sense when compared to “wasting” your money on rent, paying month after month without actually owning anything. On the other hand far too many people are willing to jump into buying a house without realizing all of the expenses that go with it or understanding what a financial strain owning can be (see: 2008 — subprime mortgage crisis). With that in mind, while building an emergency fund and starting your retirement savings should be done while still paying down debt, this is one milestone that can wait until you’re in a better financial place.

If you are going to buy a house, the least you should do is save up enough to put in a “full” down payment. Typically this means 20% of the purchase price, so a $300,000 home would require you to pony up a $60,000 down payment. Although some lenders offer mortgages with a smaller down payment, these options might require you to purchase private mortgage insurance. Additionally putting at least 20% down will help ease your finances in the long run by allowing for lower monthly payments and, more often than not, a better interest rate than if you tried to put less down.

For many Millennials, thinking down the road to a time when their student loans are paid off is already asking a lot, let alone dreaming of retirement. However, even with some debts to pay, there are still important savings milestones you’ll need to hit in order to remain financially secure. By building an emergency fund, putting as much as you can toward retirement, and (if you’re going to buy a house) saving up for a full down payment, you’ll be well on your way to a long, fiscally sound life after debt.



Kyle Burbank

Kyle is a freelance writer and author whose first book, "The E-Ticket Life" is now available on Amazon. In addition to his weekly "Money at 30" column on Dyer News, he is also the editorial director and a writer for the Disney fan site and has recently starting publsihing his own personal finance blog at

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