What Should Your Net Worth Be in Your 30s?

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Being in your 30s often means going through a lot of life changes. Whether it’s starting a career or a family or buying a home — these years are often associated with many milestones, which in turn can have an impact on that cohort’s financial well-being.

Against that backdrop — is there a mark where 30-year-olds should be in terms of their net worth?

Understanding Net Worth

A net worth, simply put, is the sum of your assets minus your liabilities, or debt.

And as the Federal Deposit Insurance Corporation (FDIC) explains, it is a good indicator of your financial health and a better measure of someone’s financial stability than income alone.

The FDIC further explains that your net worth can be a positive number, meaning that you have enough to cover your debt and some assets left. You can have zero net worth net, in which case your assets equal your liabilities, and you don’t have a financial cushion. Or you can have a negative net worth, meaning that your liabilities are greater than your assets, and you don’t have a financial cushion in this situation, either.

So with that in mind, knowing where you stand is an important tool to better your finances and take steps to correct or improve their trajectory.

According to the Federal Reserve Survey of Consumer Finances, published in October 2023, both median and mean net worth rose for all age groups between 2019 and 2022. As for families younger than 35 years old, they saw the largest growth, with their median and mean net worth more than doubling between surveys, yet they also remained the least wealthy age group.

For that group, the median net worth was $39,000, while the average net worth was $183,500, according to the survey.

In Your 30s, Your Goal Should Be Net Zero

While everyone is different, in your 30s, your goal should be to get to zero net worth, according to Jay Zigmont, Ph.D., CFP, founder and CEO of Childfree Wealth.

“It may sound odd, but getting to zero net worth is the first step to financial independence — and often the hardest,” said Zigmont.

Zigmont explained that for most people, getting to zero net worth means focusing on paying off all of your debts, since your net worth is everything you own minus everything you owe.

“Getting out of debt requires setting a budget and paying off a set amount each month,” he said, adding that there are no fancy tricks to getting out of debt or getting to zero net worth. And with credit card interest rates over 20%, investing isn’t likely to get you to zero net worth faster than paying off your debt, he added.

Your Net Worth Should Be Between $25K and $100K

The net worth you should be aiming for in your 30s is between $25,000 and $100,000, according to Crissi Cole, founder and CEO of Penny Finance.

Here is why: If you don’t save another dollar but want to retire at 65, you’ll need at least $100,000 in a retirement account, fully invested in stocks and bonds, to reach about $1 million at 65, she explained.

“Of course, there are so many factors here. Most people start to earn more money as they get older and can save more. If you are saving $500 per month toward retirement, then your net worth can be around $25,000,” she said. “For those of you with $0 net worth or negative net worth — hello, student loans — don’t worry, you still have time.”

It Depends on Your Circumstances

While the amount and approach to savings are likely to vary widely from person to person, there are three simple rules that have been proposed from time to time.

2x Income Rule

For instance, Peter Earle, senior research fellow at American Institute for American Research, noted that the 2x Income Rule suggests that your net worth should ideally be double your annual income.

“For instance, if you earn $60,000 per year, aim for a net worth of approximately $120,000 by your 30s,” said Earle.

30x Monthly Expenses Rule

The 30x Monthly Expenses Rule proposes having savings and investments equivalent to 30 times your monthly expenses.

“If your monthly living costs amount to $3,000, strive to achieve a net worth of at least $90,000 or more,” Earle added.

Debt-to-Net Worth Ratio

Finally,  the debt-to-net worth ratio takes a different approach, suggesting that ones’ total non-mortgage debt should not exceed 25% of your net worth.

“For instance, if your net worth reaches $100,000, ensure your consumer debts — like credit card balances and personal loans — stay below $25,000,” Earle said. “Obviously marital/family status, career, personal goals, lifestyle and regional economic factors will impact whether or to what extent any of these benchmarks are realistic.”

How Can You Improve Your Net Worth in Your 30s?

According to Earle, a concerted effort with relatively safe investments — such as CDs, for instance — is probably the way to go.

“Think of it this way: $5 saved every weekday — 20 weekdays per month — at an annual interest rate of 4%, compounded daily, over 10 years would yield approximately $16,230 after 10 years,” he said. “It’s far less a matter of taking tremendous risk than staying the course at a moderate rate of interest, but for a substantial length of time.”

There is also another way to look at it, according to some experts: Where is your IRA net worth?

Matt Willer, managing director and partner at Phoenix Capital, explained that almost any fully employed individual can adjust their living habits to max out a traditional or Roth IRA each year for $6,500.

“If you can commit to that, and you can generate a modest 7% annual return in good markets and bad — which is quite viable — at age 30, you should have an ‘IRA net worth’ of roughly $132,000; at 35, that is over $225,000,” he said. “While many people will have more or less based on countless variables, most people could commit to the path that provides the retirement balances above using discipline and repetition.”

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