How Much Money Should You Have By Age 30? Why Calculating Your Net Worth Is A Joke

November 11, 2013

How much money should you have saved up by age 30? Calculating your net worth can be misleading. Find out the right way to do it!

So, last week, I went through a bit of a “money crisis” where I was sitting at my laptop, reading over personal finance blogs and I could feel the anxiety creep in.  I’ve attended the Financial Blogger Conference for three years now and pretty familiar with the bloggers in this niche, they’re all great people- but if you didn’t know, one trait of this lot is that they like to put it all on the table when it comes to their money.

Many personal finance bloggers will update their readers on their debt payoff, monthly savings goals and show screenshots of their net worth spreadsheets.  If you haven’t noticed, I typically don’t do this.  The most I’ve ever disclosed is my monthly budget, and that wasn’t too revealing.

I love seeing everyone’s numbers- to me, it’s a helpful peek into their lives to keep me motivated and see what’s actually going on in the world as opposed to what you’ll hear on the news or read in a magazine.  (A great feature on this is Consumerism Commentary’s “Naked With Cash” series) Real people, discussing real finances- though sometimes it can be a bit overwhelming.  As I was looking over other frugality and personal finance blogger’s net worth, I realized I hadn’t calculated mine in awhile, and I’d assumed it was deplorable by comparison.

One easy way to estimate how you “stack up” financially to others in your age/income group is to calculate your net worth. 

To calculate your net worth, you add up your assets and subtract your liabilities (debts).  Tally up the value of all of the things/accounts that you own – the value of your home, the value of your cars, the value of your savings, investment accounts and a retirement account – those are you assets.  Then tally up your liabilities- any money owed (debt) on student loans, credit cards, mortgage, car payments and subtract that total from your assets.  The resulting number is your net worth.

So, back to the panic I was feeling-  I suddenly had this lingering question- “How much should I have by age 30?” and “How much should I be worth in my 20’s?” I started Googling, going over my finances and just feeling rather craptastic about myself.  I found this handy Net Worth Calculator on CNN- but then I realized that “net worth calculators” are simply that- calculators.  Just because it does the math and can estimate or calculate the figures, that doesn’t mean it’s socially accurate.

For me, at age 27 my “net worth” is be estimated to be $8,525. based on the average worth of this age group.  

The “average net worth” for my income is calculated at $35,375.    (that’s a huge difference!)

Calculating Your Net Worth

Net worth calculators- how much should you save by the time you're 30? Instantly though, you can see the fallacy with net worth calendars- there is a HUGE divide between what is and what should be.  On average, people in their mid-20’s have less than $10k in net worth no matter what their income, but the calculator adjusted a HUGE jump in anticipated net worth for this age group based on their salary.

Not only was there no difference in net worth for a $15,000 range in salary from $30-$45k, but there was a giant jump in the net worth estimate for anyone making $50k a year.  To me, even assuming that people making $50,000 may have more available to save/invest, that’s a HUGE gap, even more confusing is the fact that “the actual” estimates for this age group didn’t move an inch.

Why the difference?  For me, after I got over the gnawing feeling of what the calculator estimated I should be worth- I plugged in a few factors:

-The calculator doesn’t factor in years of previous income (like unemployment or time in school) and assumes you’ve made your current rate along the way.

-The calculator doesn’t factor in debts from student loans or other income drains that mean less money in the bank or to invest.

-For many full time workers (not to mention part-time workers or contractors), 401ks or other investment opportunities simply aren’t an option.

While I can calculate my full-time income going forward, I spent 6 years of my adult life in college to finish with a graduate degree.  I made part time income- and when I attempted to factor that in with the calculator, the “estimated net worth” dropped to $1,250!  So, the tool itself is simplistic- it cannot do complex calculations on changes in income, debts, or other assets.

Debt is a huge issue in America.  Chances are, if you’re debt-free (or close to it) your net worth may not be negative, but it will be significantly lower than what the calculators tell you that you “should” be worth since you’ve used whatever cash on hand you had to pay off debts.  For most people in their 20’s and early 30’s, your net worth may still be a negative number if you’re working on building your assets overall (with a student loan, mortgage, etc) but for now, it’s more of a debt than an asset.

 So, How SHOULD You Measure Your Net Worth?

What I would recommend is that you keep track of your net worth on a monthly or quarterly basis- why?  Yes, it may make you feel crapalicious at first, as it did me- but, it can also be a solid kick in the tush to get moving since knowledge is power. When you know what you’re worth, you know exactly how to hit your financial goals.

The first month you track, you might want to sit next to a pint of Ben & Jerrys or a stiff glass of bourbon, but after you know for certain where you stand, you can track whatever progress you make- even if you only grow a few dollars at a time.

Each month, you’ll see how much you’ve payed down your debts, or saved towards your retirement.  I was feeling pretty down about my networth, then I took a minute to actually tally up my assets and put them in a spreadsheet.  When I got to see the “big picture” of what I’d accomplished, but also, could easily see the trajectory of where I was going if I kept up good financial habits, it suddenly made my outlook much happier than when I simply looked at CNN’s net worth calculator.

How Much Money Should You Have By Age 30? Why Calculating Your Net Worth Is A Joke

Have you calculated your net worth?

How does it make you feel & how are you working on it?

36 comments so far.

36 responses to “How Much Money Should You Have By Age 30? Why Calculating Your Net Worth Is A Joke”

  1. Tara says:

    Yeah…I don’t like to think about that. We have no credit card debt and very few undergrad student loans, but between Hubby’s med school loans and our mortgage…it’s bad 🙁 But doctors are in a different situation than most people because he is still in training at almost 28 years old. He is JUST earning his first paycheck, and it’s not a typical “doctor’s salary!” If yours is positive at all that seems great to me. Of course, I am also in awe of your saving habits.

    • Elizabeth says:

      Thank you so much for posting this, Tara! My fiancé and I both graduated college during the height of the recession and went straight to grad school. Thank God his parents paid for most of his living expenses while he was in college and in pharmacy school. Professional degrees are EXPENSIVE and there’s no way that 99.9% of people could pay the tuition in cash. I feel like many financial expert expectations don’t account for this.
      We are absolutely determined to pay off all of the loans in 5 years. It’s going to be hard when all of a sudden we go from having nothing to having more than enough, but I know it’s worth it. He’ll be done in May!! Congrats to your husband on starting his residency. You’re almost there!!

  2. I had to calculate my net worth when I took Financial Peace University and it was sad. A big part of my low net worth is the fact that when the realty market tanked, I ended up owing a lot more on my house than the market currently says it’s worth.

    Obviously, the numbers are getting better having most of the debt paid off, but it’s still going to be ugly for a while until the housing market in my area turns around.

    • Shannyn says:

      Heather- we are in the same boat! The condo my fiancé bought is estimated at less than he paid for it. I don’t even count it in my personal assets since we’re not married yet but dang…it’s a big bummer!

  3. I don’t understand the point of “calculators” like that. Do you know what it said ours should be based on income? Over $1,100,000! At age 30. What!!?!??! Coincidentally I happened to have recently added up all the gross pay we have earned since graduating college – for both of us. That total (7 years of work!) is less than $900K. I’m not saying we don’t make good money, but how can you take anything like that seriously when it thinks we should have more money accumulated than we have ever earned.

    • Shannyn says:

      Ya, it took some serious liberties with the estimator- I’m thinking a few hire earners skewed the average. Like, perhaps people with an inheritance, or someone who had a spouse who paid off real estate, not sure… but still.. kind of wonky!

  4. Janine says:

    Tracking my net worth is a great way for me to stay motivated. Ultimately you can’t compare with your age category or your income because everyone’s circumstances are so different. Someone who makes 50K a year but has been in that income bracket for 25 years is going to have a lot more money. What about people who have retired. They have low income but high net worth. I’d say they skew the statistic!

    • Shannyn says:

      Ya, after using this calculator I had to laugh. If there’s not way to factor in things like unemployment, time in school, disability or other factors that could impact your employment- it’s kind of a silly way to estimate..but it was still interesting for me to see it up close!

  5. Janine says:

    Tracking my net worth is a great way for me to stay motivated. Ultimately you can’t compare with your age category or your income because everyone’s circumstances are so different. Someone who makes 50K a year but has been in that income bracket for 25 years is going to have a lot more money. What about people who have retired. They have low income but high net worth. I’d say they skew the statistic!

  6. We’ve never paid too much attention to net worth (except to make sure it’s moving in the right direction), but we have really focused on saving for retirement. My view is this – our debts are low interest enough that we don’t really have to focus too much energy on the liability side of the balance sheet, so as long as we keep on improving our assets, our net worth will naturally grow.

  7. Danielle says:

    The calculator might be assuming you’ve made your current wage for pretty much your entire adult life up to that point, and making the estimation from there, which is LAUGHABLE.

    My net worth turned positive this year for the first time since I was 18, and I feel a giant weight off my shoulders. My boyfriend also just hit a positive net worth too and we can finally plan for the future because of it 🙂

  8. jena says:

    Interesting. Net worth is not something I’ve ever really thought about – I guess I’m not sure why it really even matters at this point in my life.

    Just figured out our networth is 25k; The only thing that’s giving us a positive networth is that my Dad built our house at cost and with the increasing real estate market (in our area) we have some equity in our home.

    I don’t know what the calculators say, nor do I want to know since they seem wildy inaccurate.

    Great post, definitely gave me something to think about.

    • jena says:

      LOL. I retract what I said about our networth.. So sorry, need more coffee. It’s negative. Gawd… like I said, need more coffee, and better math skillz. How embarrassing.

  9. I feel like net worth doesn’t really matter until it can really do something for you (Even if you have that $168K, you’re not exactly going to make any life decisions at this age based on that right?). Like you said, just keep track and head in the right direction, and you will see the difference over time. What’s more helpful, great net worth for your age or a $10K monthly cash flow with only $3k monthly expenses? I’d take the latter!

  10. Michelle says:

    I’ve decided to give myself a break and just pay off my debt as soon as possible. Once that’s done then I’ll work hard on growing the wealth that I lost out on during the debt years.

  11. Jon Maroni says:

    I think that the conversation about net worth can be a little bit ridiculous, especially if you feel behind (as I often do). I think some advice that someone gave me about weight loss can be helpful for this conversation. Checking your weight too often can be a real detriment to your hope to lose weight. Checking your net worth too often can be so discouraging that you don’t become motivated to do the hard steps to increase it. Thanks for being a refreshing voice in the financial blogger community.

  12. Joey says:

    Net Worth Is NOT your salary. I have no idea why people always get confused by this!!! You can loose your job at any time, yes you’ll most likely get another but that’s not the point. ASSETS are your net worth. House, car, jewellery, art, antiques, boats, the worth of your personal shares, pension etc etc. Minus your mortgage, additional loans, overdraft, credit card debt and any other debt.

  13. Zee says:

    If you use mint.com, it will calculate your net worth for you. I find it an as an excellent way to calculate your budget and highly recommended to keep track of your expenses. At 29, my net worth is in the 150K bracket, and this is with a 55K yearly salary (I started out at a 35K yearly salary job at age 22, got promoted several times through my company). My car is paid for, I have no debts. My parents aren’t rich so I have no school funding. I went to college on full scholarships and graduated in 4 years with $0 debts, in fact, I have a few pocket money leftover from those funds. Start early in high school, keep up your grades up, be involve in the community and when you apply for scholarships (apply to as many as you can, it takes time, but it is so worth it!), you’ll have a higher chance. Be focus, attentive, and love yourself.

    Be conscious of your spending. Don’t overspend, but most importantly, give when you can! (Money is an energy that likes to flow, giving is a way to keep the flow going. I got through college through the giving power of others, so I am now giving some of what I have to help others, and I know that in return, they will do the same in the future).

    • Jennifer says:

      I love this! I hope that more people with your philosophy and experience are able to mentor and teach our young people how to manage money.

  14. Formulating your net income for the future years is a great technique for preparing your financial stability. This gives you motivation to work harder, gain more and spend less, save more. It’s good to hear that your aware on how and what your spending. Setting priority would be a great tool to success.

  15. ap999 says:

    For the past 3 to 4 years I have regularly checked my Net worth, I used just do it the old fashion by adding up all my bank accounts, retirement accounts, estimated value of assets. For the past year I have switched to using Mint.com. This has been a much easier way to track all my accounts in one place, you basically input all your account information for each account, including credit cards, loans, any other liabilities too. I can check this pretty much daily to see the movements in my net worth right away.

    That CNN calculator was kind of useless. It said I should have about 650k net, my income shot up dramatically in the past two years compared to all my other working years, unemployment time and everything.

    I am turning 30 next month and I do not think I am doing too bad at all. I think I could of been doing better had I started investing a lot earlier.

  16. Ray Hyson says:

    I’ve never cared about what a calculator believes we “should” have when it comes to my family’s net worth.

    I calculate our net worth to track our progress, not compare ourselves to anyone else.

    That’s where calculating your net worth becomes valuable. You get to see if you’re making life-changing progress towards your goals.

    Nothing more…nothing less.

  17. James says:

    Good posting. My wife and I regularly calculate our net worth. We try to get to it every 3 or 4 months. So far we’ve been able to get our wealth up to 1.1 million by saving and regularly investing.

    https://www.dinksfinance.com/2014/04/net-worth-up-to-1-1-million/

  18. M says:

    I think that most folks posting here, including the author of this article, are misinterpreting the results of the CNN Money net worth calculator.

    The calculator provides two distinct benchmarks to help you compare your net worth to others – one net worth median value based on age (regardless of income) and one net worth median value based on annual income (regardless of age).

    If the calculator factored in BOTH your age and annual income to derive the median net worth value, then the calculator would produce only ONE output value for those two input values. Hence, the perceived discreprancy in the results.

    The net worth calculator results should be interpreted as follows (illustrated here with a hypothetical scenario):

    Scenario – Joe Smith:
    Inputs/Givens
    – Age 30
    – Annual income of $45,000
    – Joe has a net worth of $10,000

    Joe’s CNN Money net worth calculator results
    Outputs
    – median net worth by age: $8,525
    – median net worth by income: $34, 375

    Interpretation:
    If Joe’s net worth is $10,000, then he compares favorably to other 30 year olds (who could have annual incomes of $40,000 or $80,000, for example). In this case, Joe has a higher net worth than the median net worth of 30 year olds.

    At the same time, if Joe’s net worth is $10,000 then he compares less favorably to folks who have an annual income of $45,000 (which could include people who are 25 years old or 55 years old, for instance). Therefore, Joe has a lower net worth relative to the median for folks earning $45,000 per year.

    Hope this helps!

  19. Pay attention says:

    This is so deceiving one reads:
    “Median net worth for your age is:”
    the key here is for your age!

    the other:
    “Median net worth for your income is:”
    Here no mention of age. Could be the median of all earners at that rate. So you are comparing things that make no sense.

  20. Christopher Nowak says:

    An interesting statement by “Joey” when he mentioned that net worth is NOT your salary.

    My average annual gross income from 1987 to the end of 2014 will be approximately 11,250 ( a small+).

    I have given away about 25 thousand to charities over that time span.

    My hourly wages were 5, 7, 8+.9, 9.5, 10.25, 10.43 and 11 (part time music gigs are much more but VERY sporadic).

    I did not start saving in an optial manner until 1990 (at age 28).

    I am expecting to celebrate a net worth of 333,333.34+ in the new year but when considering assets (music equipment, furniture, a washer, a dryer, mirriors, art work, pictures, chairs, tables, a computer, a computer printer, a de-humidifier, a camera, lamps, clothes, a TV, sports trophies, tapes, CDs, videos, running medals, a CD machine, two microwave ovens, a small stove, a fridge, towels, cleaning chemicals and a telephone), I am sure most would consider me to be worth something in the $400,000+ range.

    THE KEY: AN EXCELLNT FINANCIAL PLANNER AND NON-MATERILISM (FOR MANY YEARS, I WORE A SHIRT WITH THE SAYING “MOXIE, MUSIC,WATER”).

    • Christopher Nowak says:

      An interesting statement by “Joey” when he mentioned that net worth is NOT your salary.

      My average annual gross income from 1987 to the end of 2014 will be approximately 11,250 ( a small+).

      I have given away about 25 thousand to charities over that time span.

      My hourly wages were 5, 7, 8+.9, 9.5, 10.25, 10.43 and 11 (part time music gigs are much more but VERY sporadic).

      I did not start saving in an optial manner until 1990 (at age 28).

      I am expecting to celebrate a net worth of 333,333.34+ in the new year but when considering assets (music equipment, furniture, a washer, a dryer, mirriors, art work, pictures, chairs, tables, a computer, a computer printer, a de-humidifier, a camera, lamps, clothes, a TV, sports trophies, tapes, CDs, videos, running medals, a CD machine, two microwave ovens, a small stove, a fridge, towels, cleaning chemicals and a telephone), I am sure most would consider me to be worth something in the $400,000+ range.

      THE KEY: AN EXCELLNT FINANCIAL PLANNER AND NON-MATERILISM (FOR MANY YEARS, I WORE A SHIRT WITH THE SAYING “MOXIE, MUSIC,WATER”).

      Sorry Folks. I meant “AN EXERCISE SHIRT”.

  21. christopher nowak says:

    |I also meant “optimal” and “NON-MATERIALISM”.

  22. Jim says:

    Just FYI, you’re not interpreting the site correctly. It is not a calculator. It is a database of people, and it looks up certain characteristics. It’s not a search for Age (30) AND Income (50,000), it’s a search for Age(30) = RESULT1, Income(50,000) = RESULT2.

    Of course that is going to be different. People who make $50k+ are typically mid-career, and like many other commenters have pointed out, that means they’ve been working for a long time. For that reason, that data does not make much sense from a comparison basis.

    You would get better data by filtering for Age AND Income.

  23. Christopher Nowak says:

    UPDATE:

    I just landed a 13 dollar an hour janitorial gig and I am ecstatic!

    This wage is still only about 53% the average wage in Ontario but I do not mind.

    Again. It is all just relative.

  24. Christopher Nowak says:

    UPDATE:

    I am proud to say that after just three months on the job, I am now making $13.50 an hour (up from 13) as a janitor.

    I believe that I am in a very strange business (I was let go about 15 months ago as a janitor and yet, I tried harder there than I do now).

    The key for me: Pick a service provider that can match your skills appropriately.

    I shall probably be a solid millionaire by age 65 (11.5 years from now) and yet, never make more than 19 thousand for one year’s work.

    • Jennifer says:

      Thanks for sharing. Maybe you could write an article or two on how you are doing that. I’d love to read about your money strategies!

  25. Guy says:

    My net worth is 0. And has been for the last 27 years of my life, and I’m 27.

    I made bad choices in my teens, and never held a job for more than 6 months. In 2008 I joined the military, and had a medical discharge in 2009. I came home to nothing. I wound up homeless for the next 4 years until I met my wife. We made ends meat and struggled on 1000$ a month for a couple years. Eventually we both God better jobs, but I was laid off in about 9 months. I went from making 1800 a month, to 1200. Now I’m stuck in this job for at least another 5 months, cuz I’m working on my job history, making smarter choices for my future. My wife is still making around 2 grand a month, but that’s with her working easily 60 hours a week or more, and I’ve been putting in about 56 a week.

    We’ve purchased our first house, a mobile home, for 12000$. We were previously renting 2 houses, but got raped by 1, the first landlord sold the property out from under us, and I might add that house had no heat or ac. All winter we nearly froze to death. And the last house turned out the landlord was into a bunch of legal problems, forcing us to move.

    It’s been rough the past 4 years. We acquired this new house, only through the totaling of my cars insurance pay out, where I was subject to a 5 car head on collission, not my fault. So I traded in my once nice car for a house essentially. Only problem is now our bills have. Ore than doubled. I’m lucky if I have 200$ left over a month, and my wife is about the same. I’m driving on bald tires, I have no heater or ac. My wife’s car is on a lease and we went over on mileage due to a long commute to the only jobs we could find the last year.

    Now we are facing a broken furnace, car issues, the same old bills, having to start shopping at thrift stores and dollar stores just to stay alive. I’m in debt to hospitals about 15 grand, because I can’t afford health insurance.

    Ifor I take our total owned assets, we have a total of maybe 5 grand. But both of our debts combined are easily 20 grand. Neither of us make enough money to pay them off. And the majority of the debts are from the government health care system fucking us over.

    Net worth is nothing but a dream to us.

    • Christopher Nowak says:

      I feel very sorry for you.

      Believe it or not, these are the first negative comments from:

      1) This blog
      2) Financial Sumari
      3) Net worth at 30.

      I wish you all the best for the future.

  26. Christopher Nowak says:

    UPDATE:
    FREEDOM 54!!
    I have just calculated my lifetime gross income from early December, 1986 until my 54th birthday (Feb.5, 2016). It works out to be exactly $11,250 on an annual basis.
    MY NEXT GOAL: TWO gross incomes of $18,250 or better (one is job and the other is investment income off of about $365,000).
    That is right-100 dollars a day for every day that passes. I am definitely happy with that.

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