How Much Money Should I Have Saved by 30?
When it comes to *finally* thinking about getting your money in order, a question we often get is, “Okay, so how much money should I have saved by 30?”...or some variation of it. But the truth is, there's no one-size-fits-all answer. Instead, we challenge you to start by getting a clear understanding of your current financial situation and priorities and thinking about what wealth actually enables in your life. Once you know what matters most to you, creating short, mid, and long-term savings goals will be much easier.
At Factora, we think about wealth enabling 4 major things:
Survival
Stability
Flexibility
Freedom
And we visualize each of these as different steps in your financial journey—starting at the bottom with survival and moving up towards financial freedom.
Survival
At the bottom of the framework is survival. This is where people work to earn money and can pay for their basic living expenses like food, shelter, and transportation, but they don’t (or aren’t able to) prioritize keeping any additional money for their future needs or wants. Think of this step as living paycheck to paycheck or consistently paying off credit card debt without ever saving or investing or barely making your student loan payments.
Stability
Once you start prioritizing saving money each month instead of spending your entire paycheck, you begin to experience financial stability. At this point, you’re able to start or finish your emergency fund, you’ve paid off most or all of your debt, and you’re able to start saving up for short- and mid-term goals. Maybe you are monitoring your credit score more frequently with apps like credit karma and adding more money to your savings account every month, even if it's a little bit.
Flexibility
Once you’re free of high-interest debt, your emergency fund is full, and you’ve saved up for your short-term goals, you can start prioritizing money towards investing. Investing is the key to having better financial health and financial flexibility. It's a point at which your investments are generating additional cash flow. This is key because it means you’re no longer solely dependent on your job to make money. More income streams make your financial life more resilient.
Freedom
Over time, once you’ve exponentially grown your wealth through investing, you can achieve the ultimate peak of the pyramid: financial freedom.
What is financial freedom?
While financial freedom looks different for everyone, it’s essentially a point in time when work becomes an option, not an obligation. It allows you to live the life you want on your terms and no one else’s. This might look like:
Traveling around the world or living abroad for extended periods of time
Spending more time with your family
Getting active with causes you really care about
Dedicating more time to your hobbies
Working on your own schedule (and only if you want to!)
Retiring well before you’re 65
At the end of the day, your idea of financial freedom should be as unique as you are and you should think about what your financial goals are. We're just here to help you reach it—by giving you the education and tools you need to create a solid financial foundation that will serve you for the rest of your life.
So, what does it mean to have a strong financial foundation?
A strong financial foundation allows you to move up this framework from survival to freedom. It’s a set of financial habits and tools that allow you to achieve your goals and build the life you’ve always dreamed of.
If the idea of going from survival to freedom sounds like a big leap (and a lot of work), don’t worry—we’ve got you covered. If the idea of going from survival to freedom sounds like a big leap (and a lot of work), don’t worry—we’ve got you covered.
Introducing: The Factora Financial Framework
Think of the Factora Financial Framework as your roadmap to financial freedom.
The framework is set up like a pyramid with steps going up—as your wealth grows, you can move up to the next step allowing for more stability, flexibility, and freedom in your life.
The vast majority of people stay at the bottom in survival mode, but by prioritizing paying off debt, saving, investing, and diversifying your income streams, you have the ability to move all the way to the top. And that’s what Factora is all about.
The framework is broken down into these 6 steps:
Eliminate high-interest debt
Spend based on your values
Fill your emergency fund
Save for near-term goals
Invest for your mid- and long-term goals
Reach financial freedom
Each week for the next 6 weeks, we’ll be focusing on the next step up in the framework—to help you understand your current financial picture and what you need to do next to build your financial foundation.
Next week, we’ll dive into eliminating high-interest debt and why this should be at the top of your financial priority checklist.
Want more?
The first episode of Coffee & Coin’s series on the Factora Financial Framework is now live. Check back each week as we discuss each part and why it’s integral to building your wealth.
And if you’re ready to dive in, join the waitlist for the Wealth Circle—our live, online course and community that focuses on the top tiers of our framework, teaching women how to confidently invest in the stock market, real estate, and businesses, to reach financial freedom way before they’re 65.