A common question asked among many Singaporeans is, "How much savings should I have by xx years old?" 

Mostly, Singaporeans just ask this because they want to know if they're above or below the median. But the answer is not so straightforward, and varies among individuals in Singapore depending on personal circumstances.

HOW MUCH SAVINGS SHOULD I HAVE AT 35 IN SINGAPORE? 

As a bare minimum, the correct amount to have saved up — at any age — is 6 months of your income. Any amount beyond this should be redirected into  your investment portfolio or retirement fund.

This is because savings are mean to remain in liquid cash, ready to use during emergencies, whereas investments are more illiquid and for the long-term.

So if you have an income of $5,000 a month, your "savings" are generally adequate if you have at least $30,000 saved up. Note that your CPF doesn't count, as it's not savings you can immediately draw on. A recent survey by OCBC says only 51 per cent of Singaporeans have enough savings to last 6 months.

Here's an alternative way to look at it:

The typical Singaporean makes around $4,563 a month (median income as of November 2019). After CPF, this comes to about $3,650. Assuming you save 20 per cent of this (an average savings amount), you would stash away $730 a month.

Let's say you've saved this amount since you started working at the age of 25. You use a standard savings bank account, with an interest rate of around 0.125 per cent (you don't put the savings in a fixed deposit, as you want to be able to use it immediately in an emergency).

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Pro tip: Make use of different types of bank accounts to optimise your savings.

You would have, after 10 years, around $88,702 (not accounting for inflation).

That's not very efficient as after around $27,400 (about the six months income mark), you should be putting the rest of the money into an investment, such as an endowment plan or mutual fund, with higher interest rates, to grow your savings.

At the very least, you should be putting your savings in a multiplier account, where interest rates rise the more you do with that particular bank. 

HOLD ON, WHAT IF I DON'T HAVE THIS MUCH MONEY? 

Of course, that's because projections are ideal situations. The practical reality with personal finance is that ideals and reality seldom match.

Everyone's financial situation is different. You may have responsibilities that others don't. For example, some people have parents or siblings with medical conditions, who need more expensive healthcare.

Some people have an income lower than the median, which makes it hard to save. There's also one element that many people in their 30s have in common.

Your 30s are typically the age in which you're saddled with heavy financial commitments like buying a flat or car, or raising your first child.

It's quite possible that you did save diligently from your 20s, but your wedding has wiped out a significant portion of those funds.

In fact, only 51 per cent of Singaporeans have enough savings to last 6 months, said the OCBC survey. For many of us, our CPF are our savings, and our flat is our retirement asset.

So if you're 35 and have less than $88,702 in the bank, don't panic. You're not alone. 

THERE'S A LIMIT TO HOW MUCH I CAN SAVE EACH MONTH

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This happens because you're relying solely on budgeting. Building up your savings requires more than just a tight budget.

Be proactive in investing in yourself by constantly trying to upgrade your professional skills or to learn basic investing to grow your money.

Just because the word "saving" is used, it doesn't always mean buying less. Yes, financial discipline and budgeting is required, but building up your savings also means finding ways to earn more. And just like setting aside more money, it's never too late to start.

BOTTOM LINE

Savings should not be an age-specific goal. It's unhealthy to focus on age. Ultimately, your savings goal should be a dollar amount and not an age.

If you earn $5,000 a month and your savings goal is $30,000, then of what relevance is your age?

If you don't have a single dollar saved and want to start right now, then save aggressively in the coming year (maybe save 50 per cent instead of 20 per cent of your monthly salary).

You'll be done in 12 months. It doesn't matter if you're 25, 35, or 45. As soon as you start making an effort, you can resolve the situation.

Don't panic over how much you have right now, and whether that's "right" for your age. Focus on how much you need, and how you're going to get there.

Don't be under the impression that it's "too late" now, or that you missed the boat on being financially responsible.

This article was first published in SingSaver.com.sg.