Do You Have More or Less Money in Savings Than Other People Your Age?
When you have a lot of money in savings, it inevitably makes you more financially secure -- and it also reduces the chances you'll end up in credit card debt.
How much should you have in savings exactly, though?
For most people, the amount they'll need increases with age as they take on new obligations and start earning more income. Let's take a look at savings account balances by age so you can see how you compare.
Here's how much Americans of different ages have in savings
According to research from The Motley Fool Ascent, here are the median savings account balances for people of different age groups:
- Under 35: $5,400
- 35 to 44: $7,500
- 45 to 54: $8,700
- 55 to 64: $8,000
- 65 to 75: $13,400
- 75 or over: $10,000
Savings account balances start to go up as you get older and have more time to put money away. Balances begin dwindling once you get into late retirement, though, as you're generally in spending mode at that time rather than accumulation mode.
Still, most of these savings account balances aren't very high -- especially considering it's a good rule of thumb to have three to six months of living expenses saved so you're prepared for unexpected expenses.
If your savings is below average, or even average, you may want to work on growing your account balance so you can be in a better position to avoid debt or cover expenses in case of a loss of income.
How can you grow your savings?
You can use a few different techniques to increase your savings. Here are some things you can do.
Start separate high-yield savings accounts for different goals
This can make it easier to track your progress and stay motivated. For example, you might have a savings account for your emergency fund, a savings account for big purchases, and a vacation fund. Some individual accounts also offer the feature to split up your savings among different goals.
Set specific savings goals
Decide how much you need to have saved and what your deadline is for meeting your goals. For example, if you want to take a big vacation next year, you might set a goal to save $5,000 in 12 months.
Break big goals into small ones
Once you know what your big goal is, decide how much you must save each month toward it. If you're trying to save $5,000 in 12 months, that would be about $417 a month. Do this for all of your different accounts and goals.
Automate your savings
Make a budget that prioritizes your savings goals. Once you're convinced you can make the numbers work, set up automatic transfers from your checking account into your savings account on payday. Or, if your employer lets you, split your direct deposit so some of your money goes right into savings.
By implementing these techniques, you'll likely find you're much closer to increasing your savings account balance. Your account balance may even grow to beat others in your age group -- but the most important thing is that you'll be on track to accomplish the things that matter most to you.
No matter where you are on your savings journey, Old National Savings accounts can help you reach your goals. Get started today!
This article was written by Christy Bieber from The Motley Fool and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
