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How to Save $100,000 by the Time You’re 30

Lately, we’ve been hearing people talk about how to save $100,000 by the age of 30. While it sounds intimidating, this magic number is actually a lot more attainable than you think.

Taking steps to save $100,000 by 30 might require some adjustment to your mindset and lifestyle, but reaping the rewards of your hard work will make the effort worthwhile.

If you’re ready to take the plunge, here are some actionable steps you can adopt.

Set monthly savings goals

As the cliché goes, if you fail to plan, you are planning to fail. Set aside some time to plan the amount you should be saving every month. You could start with the “50/20/30 budget rule”, which means you allocate 50% of your salary to needs, 30% to wants, and 20% to savings.

However, saving a mere 20% may not be enough to hit your goals within your set timeframe, especially if there are unforeseen circumstances like illness that might require you to take out a portion of that cash.

Here’s a table showing how much you will have at the age of 30 if you save 20% every month. These calculations are based on the average income of a fresh graduate aged 25, assuming a 4% yearly increment.

AgeSalaryAfter CPF Deduction20% Monthly Savings
Annual Savings
25$3,700$2,960$592$7,104
26$3,885$3,108$622$7,464
27$4,079$3,263$652$7,824
28$4,283$3,426$685$8,220
29$4,497$3,598$720$8,640
30$4,721$3,777$755$9,060
TOTAL$48,312

*Salary based on median gross monthly salary in 2020, according to The Straits Times

Based on this projection, there is still a shortfall of $51,688, which means that you will have to rely on your investments to accumulate the $100,000.

As difficult as it may be, saving 50% of your monthly salary can allow you to hit your goal comfortably with your savings alone:

AgeSalaryAfter CPF Deduction50% Monthly Savings
Annual Savings
25$3,700$2,960$1,480$17,760
26$3,885$3,108$1,554$18,648
27$4,079$3,263$1,632$19,584
28$4,283$3,426$1,713$20,556
29$4,497$3,598$1,799$21,588
30$4,721$3,777$1,889$22,668
TOTAL$120,804

Stashing away 50% of your monthly salary could lead to a grand total of $120,804 over 6 years! This puts you in a better financial position to put aside the excess amount as emergency funds or investments.

Saving half of your salary could be difficult at first, but it doesn’t mean you have to live like a pauper just to save that amount. Here’s how to get there with less pain.

Automate your savings

Automating your savings can help you stay on track and avoid the temptation to spend your money. Set up automatic transfers from your salary bank account to your savings account each month.

Avoid debt

Debt can be a major obstacle to saving money. Avoid taking on debt whenever possible, and pay off any existing debt as soon as possible. If you must borrow money, be sure to check with your family and friends first to see if they could afford to loan you some money, or shop around for the best interest rates and terms.

Review your current lifestyle

Start small with a feasible monthly savings goal that you can achieve with just some minor lifestyle changes.

For instance, if you are a typical millennial with a penchant for cafe hopping, begin by reducing the frequency of your cafe visits instead of entirely ditching this. Over the subsequent months, review your progress and determine if there are more lifestyle changes you should make to help you save 50% of your monthly salary.

While some aspects are non-negotiable, explore ways you could cut down non-essential spending. When it comes to food, eating out is notoriously expensive. Why not try honing your MasterChef skills and cook your own meals instead? Otherwise, try setting a limit for your weekly meals (and stick to it).

For the beauty junkies, staying youthful doesn’t have to burn a hole in your pocket. Did you know that you can get free beauty products and services without making any purchases? Another good way to save would be to make your own DIY masks with everyday items found at home, with natural ingredients such as honey or oatmeal.

Make sure you are financially protected

You never know when life will throw you a curveball. In the unfortunate event that something happens to you, you might be in a financially vulnerable position – and it could even hinder your plans to achieve $100,000 by the age of 30.

This is why it is so important to make sure that you are financially covered through insurance, as it provides protection against unforeseen circumstances and helps you and your loved ones cope with financial setbacks.

When you’re young and in good health, the risk to the insurer is lower, resulting in a lower premium rate. These rates remain fixed throughout the policy period, starting from the day you sign up. Opting for life insurance at a young age can lead to more affordable premium rates, helping you save money in the long run.

If you have already purchased insurance to safeguard your future, consider assessing whether your insurance needs are adequate.

On the other hand, if you have yet to purchase any insurance, learn about the common mistakes made so you know what to avoid.

Break away from unhealthy habits and embrace a healthier lifestyle

Are your bad habits costing you money?

An innocent midnight fast food run could lead to a significant amount when you add them up. To put things in perspective, imagine heading to McDonald’s every day for supper. Let’s say you order your favourite Buttermilk Crispy Chicken Meal, which costs $10. Over a week, you would be $70 poorer, or $280 in a month. In a year, that $10 a day meal would have cost you $3,650.

Furthermore, such bad habits might have been acceptable in your youth, but it’s time to reassess your lifestyle and dietary habits. Making healthier food choices can help reduce the risk of heart problems or chronic diseases like diabetes and stroke as you age, helping you to save more money in the future.

Track your progress

If you’re blindly saving without keeping tabs on your progress, chances are that you will feel unmotivated quickly. 

Incentivise yourself with a small treat every time you hit a milestone, e.g. $20,000 in savings. This will encourage you to keep up with your saving habits and gradually see the savings you have accumulated.

Read more: Smart Shopping Tips that Reduce Overspending

Splurge — kind of

That’s right. Splurge! But we don’t mean undo all your hard work. With a variety of cashback/coupon sites available, treating yourself while significant cost savings can be a breeze.

Simply head over to Fave for discounted deals on staycations, experiences, beauty, dining and more. To enjoy some cashback, why not make use of ShopBack?

Have a side hustle

Instead of merely relying on one source of income, hustle harder with a second job if your employer allows this.

The extra money on the side can help to supplement your savings, and you can even make use of the opportunity to build your portfolio. You can take on jobs such as freelance writing, web design, tutoring or even selling items online through e-commerce platforms including Shopee, Carousell, LAZADA and more. 

Read more: 9 Easy Side Hustle Ideas for Students Looking To Earn Extra Income

Invest

Consider investing in unit trust or robo advisors to grow your wealth.

Robo advisors

If you’re just starting out in your investment journey, you could benefit from robo advisors. In short, robo advisors make use of algorithms to automatically invest your assets, with little to no human intervention. This means that the advisor fees are kept to a minimum.

As with any other investment portfolio, robo advisors will factor in your financial goals, investment timeframe and risk appetite so as to create the right portfolio for you.

Pro tip: Read more about robo advisors here!

Here are some of the robo advisor platforms currently available in the market:

Robo AdvisorMinimum Investment AmountAdvisor Fees Per Annum (P.A.)Platforms
SyfeNone0.4% – 0.65%
Web And Mobile App
StashAwayNone0.2% – 0.8%
Web And Mobile App
SquirrelSaveNone0.5%
10% Of Any Positive Return (Performance Fee)
Web Only
UOBAM InvestS$10.6% – 0.8%Mobile App
OCBC RoboInvestUSD1000.88%
Web And Mobile App
MoneyOwl$1000.5% – 0.6%Web Only
DBS DigiPortfolioS$/USD 10000.75%
Web And Mobile App
AutoWealthS$30000.5%
US$18 (Platform Fee)
Web Only
UTrade Robo (UOB KayHian)S$50000.5% – 0.88%
Web And Mobile App
Philip SMART PortfolioS$50000.50%
Web And Mobile App
EndowUsS$10,0000.25% – 0.6%Web Only
Kristal.AIUSD0 – USD50,00000% – 0.3%
Web And Mobile App

Unit Trusts

If you invest in a unit trust or fund, your capital is pooled with money from other investors. This amount will then be invested in a portfolio of assets, in accordance with the fund’s investment approach and stated investment objective.

Unlike robo advisors, your fund manager plays an important role in monitoring your unit trust. Unfortunately, a fund manager is not free and can add a significant fee to your passive income.

However, you don’t need a lot of capital to start investing. In fact, some banks allow you to start with just $100 a month! Find out more about unit trusts here.

Saving is a journey, not a destination

Saving the first $100,000 will be the hardest part, since it requires you to reassess your mindset and tweak your lifestyle.

The financial decisions that you make in your 20s will have an impact on the rest of your life. When you learn to make good financial choices in early adulthood, you are setting yourself up for a smoother financial road ahead.

Even if you are unable to hit $100,000 by the age of 30, don’t beat yourself up. Take baby steps to reach your financial goal today and you’d be in a much better place tomorrow.

Have more tips on how to save $100,000 by 30? Write to us at ask@plannerbee.co!

Read more: 5 Habits That Help Your Bank Balance to Grow

2 thoughts on “How to Save $100,000 by the Time You’re 30

  1. Pingback: 5 Money Tips You Should Ignore (and 5 More You Shouldn't) - Planner Bee

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