How Much Should the Average Middle-Class Gen Zer Have in Savings?

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Gen Z hasn’t had the smoothest entry into adulthood, especially with the COVID-19 pandemic, inflation, rising homeownership costs and political uncertainty. And with so much going on in the world, you’ll want to have a financial cushion to fall back on just in case. But exactly how much should you have in savings?

Here’s what’s realistic for a middle-class Gen Zer when it comes to savings, and how to build a solid financial foundation without feeling overwhelmed.

What Counts as Savings?

When people talk about savings, they usually mean more than just a standard bank account. It can include:

• Emergency funds
• Retirement savings, like a Roth IRA or 401(k)
• Short-term savings for things like travel, moving, or a new laptop
• Brokerage accounts

Depending on your income, lifestyle, and goals, the right mix will look different for everyone. But if you’re a middle-class Gen Zer who’s earning somewhere in the $40,000 to $60,000 range, here’s what to aim for.

What Exactly Should You Be Saving For?

Your savings should ideally cover a few different areas of your life: emergencies, long-term goals like retirement and short-term plans you’re working toward right now.

Emergency Savings

Ideally, you’ll want to have three to six months’ worth of expenses in a high-yield savings account. In other words, if your monthly costs add up to $2,000, you’d be aiming for somewhere between $6,000 and $12,000. Note that your emergency savings are intended for emergencies only, like car repairs, medical bills, or sudden job loss. Avoid dipping into it for things that aren’t urgent.

Retirement Savings

Financial planners often suggest saving around 15% of your income for retirement, but if you’re just starting out in your career and don’t have much to save, even 5% is a great start.

A common benchmark is to have your annual salary saved for retirement by the time you turn 30. So if you make $100,000 a year, the goal is to have at least that amount saved up. That includes investment growth too, not just your personal contributions.

Short-Term Savings

This is for things you know are coming up soon (like moving into your own place, buying a car, or taking a trip). You don’t need a specific number here, but it helps to set goals and work backward. If you want to take a $1,500 trip in six months, saving $250 a month gets you there.

How Much Do Most Gen Zers Actually Have Saved?

The median net worth of people under 35 (including Gen Z and some millennials) is around $39,000, according to the 2023 Survey of Consumer Finances. That number doesn’t tell the whole story, though, since many Gen Zers have barely started their career, and some are still in school. For example, if you’re under 27 and still trying to figure out what you want to do, you may not have $39,000 lying around. 

Though it’s helpful to have an idea of what the average is, it’s not healthy to compare yourself to someone else who’s on a different journey than you. Focus on creating a savings plan that makes sense for where you are right now.

What If You Don’t Have Much Saved Yet?

If you don’t have much saved, you’re actually in the same boat as a lot of people your age. Don’t panic. The most important thing is to start now, even if it’s small. Putting away $25 a week adds up to $1,300 a year. That’s enough to build your first emergency cushion or start a Roth IRA.

Also, take advantage of anything that gives you a head start. If your job offers a 401(k) match, try to contribute enough to get the full match because it’s essentially free money. 

Easy Ways To Build Savings on a Middle-Class Income

You don’t have to make big sacrifices to build savings on a middle-class income. A few simple habits go a long way:

• Automate transfers to savings
• Use a budgeting app to spot areas where you’re overspending
• Negotiate down your high-interest debt
• Cancel unnecessary subscriptions
• Dine in instead of eating out

Start Now

There’s no one magic number for how much a Gen Zer should have saved. But if you’re aiming for a few thousand in emergency savings, contributing regularly to retirement, and setting aside money for things you care about, you’re doing just fine.

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