Retirement and how to save for it usually aren't funny topics. But over the last 24 hours, an article on what finances should look like for people in their 30s has garnered some scathing remarks on Twitter.

Or, as one Twitter user wrote about the idea of having a year of salary saved by 30 and two by 35: "HAHAAHAHAHAHAHAAHA *takes a deep breath* HAHAHAHAHAHAAH oh you guys".

The article, originally published in January by MarketWatch, is part of a series about where people should be financially at any given decade of life. And people were reacting because they found the advice ludicrous.

Is it? Here are some numbers that put it into perspective. I've combined a number of sources. One is IRS numbers for what the agency considers allowable living, transportation and ownership of a car, housing and utilities, and out-of-pocket healthcare for one person per month if it's trying to collect money. I've also added estimates of student loan payments on $30,000 borrowed at the 4 percent interest rate of Federal Direct Loans. We're assuming here that you have a salaried job with benefits like health insurance.

  • Food, clothing, and other items: $647
  • Out-of-pocket healthcare (under 65): $52
  • Housing and utilities (North Carolina as an example): Ranges from $940 to $1,649, depending on country, so split the difference for $1,145
  • Car ownership (national): $497
  • Car operating costs (south): $196
  • Student loan: $300 (approximately)

The monthly total: $2,837, or $34,044 a year.

There are different loan repayment plans that can lower the amount, but remember, the advice is to be clear of loans, which is supposed to take ten years. Other costs can be lower or much  higher, depending on where you live.

Now for what you make, based on average salaries in the U.S. according to Bureau of Labor Statistics numbers from mid-2017 as reported by Business Insider. (The BLS site was down as I wrote this, so no way to update the information). In your mid-20s, it's $27,456 a year. That jumps to $39,416 a year from 25 to 34 and doesn't make allowances for taxes.

You may notice that the average person's expenses have used up all the money from their earnings without having much of anything to put away $40,000 by age 30 and another $40,000 five years later. Can some people do all that they're supposed to? Of course. Maybe parents paid for school or they are in a particularly lucrative position. They might be industrious and working a second job.

And this isn't to say that you get an excuse for not saving money, because it won't help. But it does explain why so many people do a double-take strong enough to induce whiplash when they hear the type of generic financial advice that experts offer.

There are no magical solutions. There are some steps you can take now, though, to help put things into order. Many seem small, and they are. But any extra amounts you can have at the end of the month can help pay down loans more quickly or go into long-term savings and investments.

  • Get a second job. Really. It can be a pain, but the extra effort now means money to help retire student loans far more quickly that many ever will get to. Once done, the former loan payments can go right into something more productive.
  • Don't buy on credit. It's good to have credit cards, a line of credit, and other ways to get money in an emergency. And using a credit card when you pay it off promptly every month is smart. Just don't accumulate a balance, which can take years to work off.
  • Buying services. Getting food at a restaurant or having people do your laundry is a luxury early on. Do it yourself, take what you would have spent, and put it immediately somewhere safe.
  • Cut communications and entertainment fees. This is particularly true on a phone. See whether you actually use the maximum amount of services they offer. If not, cut down on the plan. If so, cut back on your use and then go to a cheaper plan.
  • End wasted memberships and subscriptions. If you don't go to the gym, don't pay for it. If you have a streaming service and don't watch it frequently (because of that second job), end it. You can always go back.

There likely are many other things you could do as well. Plug away, put money into an index fund, keep some as cash in the bank, and recognize that even if you don't hit the marks that the experts say you should, you're developing good habits and getting further ahead than you otherwise would have.

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Published on: May 16, 2018