Managing your finances can be tricky and, let’s face it, they should have taught us more about this stuff at school! Being financially independent is the goal and that means having enough money to cover what you need without having to worry about the state of your finances.

Sensible saving is key for ensuring that you maintain financial independence even when life throws you a curveball i.e., unexpectedly losing your job. You don’t need to be really strict with your saving, instead, it’s good to find the balance between being able to enjoy/treat yourself and saving money.

When thinking about how much money you should be saving, it may be more helpful to consider percentages instead of fixed amounts. To help you, we’ve put together a short guide of how much you should be trying to save at each stage of your life.

Stage 1: The Start of Your Career

Starting career

When you’re just getting started in your career, saving is unlikely to be high on your priorities list. At this stage, you usually have a lot of new expenses, and you’ll want to get on top of everything and make sure you’re building a life that is affordable for you.

During this stage, you should be aiming to save about 25% of your overall income annually. You can include the amount that is going into your pension pot through your employer if this is something you have set up. The other 75% can then be used to cover all your expenses.

Worryingly, in the UK of people aged between 22 and 29 years, about 40% have no savings at all which could leave them in some hot water should something unexpected happen. According to MoneyFarm, 30-year-olds should have £51,434 saved if they want to be on track for a reasonable pension.

Stage 2: Raising a Family

Raising a family

If you choose to go down the route of raising a family, be prepared! Your finances are going to take a hit and long-term saving will become more difficult. Bringing up kids isn’t cheap, and you may have to help them out with university fees too.

During this stage, it’s recommended that you save twice the equivalent of your annual take-home income every five years. Therefore, if you bring home £40,000 a year, over a five-year period you should be aiming to save £80,000. Again, you can include pension contributions in this figure.

This may seem like a large amount, but once you get into some good money savings habits, you’ll adapt and get used to it.

Stage 3: Preparing for Retirement


Retirement feels very far off when you’re just getting started with your career in your 20s, but if you’re keen to retire early and enjoy your freedoms you will have to be a keen saver.

When you are gearing up for retirement, you will need to take stock of all your savings and work out what you realistically need from your lifelong saving plans. For example, if you plan for a retirement income of £19,000/year, you’ll want to be retiring with at least £266,000 in savings.

Bringing it all together

Saving plays a huge part in managing your personal finances and the quicker you can get into good saving habits, the better! You should always try to have an emergency fund that you can fall back on and ensure that your credit score is good.

If you’re not always able to meet your savings goals, that’s ok. Just ensure that you get back on track as soon as possible and do the best you can.

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