There are generational differences in how we perceive money, and it’s more evident than you may think. In an exploration of differing financial perspectives on how much money you should have saved by age 30, the TikTok account @401ok recently posted a series of interviews with three women, each from a different generation.
A baby boomer, a millennial, and a Gen Z woman all gave us a window into their varying views on their financial goals in saving money, and it demonstrates a big difference between the generations.
A boomer, millennial, and Gen Z woman revealed how much money you should have saved by the age of 30.
In one video, all three of them were posed the same, simple question, but it provoked strikingly diverse responses. “How much should you save by the age of 30?”
The boomer believes it’s best to have $100,000 saved by the time you turn 30.
For the baby boomer, the answer was fairly straightforward. “Ideally, by the age of 30, you should have at least $100,000 in the bank,” she said, a response that embodies the typical baby boomer’s attitude toward prudent savings and financial stability. This generation, having experienced economic growth and stability, strongly emphasizes having a hefty ‘nest egg’ by this age.
The millennial believes it’s best to have $5,000 saved by the time you turn 30.
In sharp contrast from the boomer, the millennial’s response reflected her generation’s financial struggles.
“I think it would be nice to have maybe like $5000 saved,” she said.
Her statement echoed the reality of many millennials who graduated during the economic recession of 2008. The beginning of their financial journey was filled with instability, which undoubtedly affected one’s mindset on how much wealth they could accumulate and save.
The Gen Zer believes it’s best to have between $60,000 to $250,000 saved by the time you turn 30.
The Generation Z respondent provided an ambiguous, albeit optimistic, perspective.
“Probably like $60,000. Like $250,000,” she said, adding, “I always heard growing up that it should be about like 20% of a payment for a house.” Her response illustrates Gen Z’s more optimistic view of their financial futures compared to millennials.
Interestingly, the millennial woman brought attention to a key variable often overlooked in discussions about personal finances. She pointed to the significant role location and cost of living play in a person’s ability to save.
“It’s really not a fair question because where do you live?” she asked.
Experts suggest having at least one year of your annual salary saved by age 30.
According to investment firm Fidelity, exactly how much you should have saved by the time you turn 30 depends on your income. Not everyone makes the same amount of money each year and everyone’s cost of living is different, so there’s no one-size-fits-all amount for a nest egg. However, retirement experts at Fidelity suggest having at least a year of your annual salary set aside by age 30, including the amount in your savings, any retirement funds such as 401Ks or Roth IRAs, and other investments.
pixelshot | Canva
Each generation clearly has a different perception of saving, in large part shaped by the economic times they grew up in. According to Finder’s Consumer Confidence Index, Gen Z sets aside an impressive average of $857 per month. In stark contrast, their Millennial counterparts manage to squirrel away a comparatively modest $294 each month. These numbers reflect the Gen Z woman’s nest egg goal of $250,000, while the millennial would be happy with just $5,000.
On top of that, a 2022 report from the Transamerica Center for Retirement Studies finds that baby boomers save $673 on average per month. Again, this number makes sense with the baby boomer’s view of saving less money than Gen Z. And according to North Bay Business Report, a 2022 survey found that both Millennials and Gen Zers changed their view on saving during the pandemic.
“Some people had more cash because they weren’t going out, they weren’t going on vacation,” Rita Assaf, Fidelity’s vice president of retirement products, told CNBC Make It in 2022. “But especially with the market being choppy and [high] inflation, I think this group is just thinking, ‘Why should I build up a retirement plan right now?’”
In addition to pandemic-related economic setbacks, younger generations are also struggling with student debt, inflation and stagnant wages, making it that much harder to realistically have $100,000 in savings as proposed by the Boomer woman.
Ethan Cotler is a writer and frequent contributor to YourTango. His writing covers entertainment, news, and human interest stories.