The ideal amount of money to have saved at 18 is $1000 to $3000+. It varies based on individual circumstances, financial habits, and managing debts.

There is no hard and fast rule when it comes to saving as a teenager, as it depends on many factors.

However, it is a nice idea to have some amount saved up before you turn 18, so you can enter adulthood with ease and must be frugal sometimes.

guide on financial planning for young adults - How much money should be saved at 18.

How Much Money Should I Have at 18? 

Typically at 18, you should save at least 10-20% of your income – whether it’s from your earnings or monthly allowance. The idea is to set up an emergency fund that can cover three months of your rent, insurance, fuel, and mobile expenses. 

Most people graduate high school at 18, so it’s obvious that this age is considered a gateway to adulthood. And you know what? Adulthood requires you to be more sturdy with your finances. 

The amount of money you should have saved by this point heavily depends on how your life will look from now on. Do you plan to attend college? Do you need to worry about rent, utilities, and other life-supporting expenses? Are you getting a car that needs insurance? 

Answering these questions will help you create a foundation for your savings plan!

There are two common approaches you can take if you are planning to save a sufficient amount by 18:

You don’t have to stick to any one of these approaches. Combine both of them to build a sturdy financial future for yourself!

17 Ways to Save Money Fast at 18 on a Low-Income

  1. Budget out Your Income and Expense
  2. Save what you can (Even if it is little)
  3. Open a Savings Account
  4. Cut down on unnecessary expenditure
  5. Reduce Eating Outside
  6. Clear off your debt
  7. Reduce Electric Bill
  8. Unsubscribe from unused Monthly Memberships
  9. Don’t buy new Shoes and clothes
  10. Reduce late fees
  11. Save Money on College Food
  12. Lower Housing and car expenses
  13. Pay Your Monthly Bills Automatically
  14. Sell your Unused stuff
  15. Tax benefits for low-income earners
  16. Find Extra Income
  17. DIY to reduce the expense
  18. Save money and Cash

How Much Do Reddit Users Earn at 18

According to this Reddit thread:

  1. “smartcooki” mentioned their 19-year-old sister in college has $10,000 saved.
  2. “shannxmm” had approximately $2,700 in savings at the age of 18 and now, at 23, has around $5,000.
  3. “ambrosesalley” saved $1,500 in the past 3 weeks.
  4. “Johnny_Ruble” provided advice, suggesting one can save about $1,000 a month if earning $2,000 a month and living rent-free.

As you can see the number is not the same and varies from person and according to different criteria, jobs, conditions, etc.

How Much Money Should I Have in Savings to Cover My Needs? 

There is no straightforward answer to this question, as everyone’s financial needs are different. Usually, factors like college education, everyday needs, and housing requirements decide what amount you would need to build a comfortable adult life. 

Please sit down with a parent, as they will be more experienced at tracking expenses, and identify your needs. 

Once you have a monthly estimate of your living expenses, save up a security fund for at least three months. The idea is to create a money bank that can cover your necessary expenses like education fees, rent, utilities, fuel charges, groceries, etc. 

If you manage to save enough to support yourself for some time without a job, you will definitely have a smooth transition into adulthood. 

How Much Money Should I Save from My Paycheck? 

Experts recommend that both adults and teenagers should save at least 10-20 percent of their income to support their financial goals! For adults, there is a 50-30-20 rule that says save 20% of your income, use 30% for wants, and commit 50% to needs! 

This rule applies to teenagers and young adults as well! I suggest you start early if you wish to save a sufficient amount by 18 and start your adulthood on the right foot. 

 If we follow the federal minimum wage, which is $7.25 per hour, you should have saved at least $5,500 by 18 (given that you started working at 16). 

Here’s the calculation:

  • If you work an eight-hour shift, your monthly salary will be $1,160.
  • So, 10-20 percent of your income will amount to $116–$232 per month.
  • This savings amount will give you approximately $1,392–$2,784 per year 

So, your approximate savings over the period of three years will be $5,500 or close to it! 

How Much Money Should an Average 18-Year-Old Have? 

It’s always a smart move to peek at how others are saving. The idea is not to compare your savings goals, needs, and situation to others, but to take inspiration and polish your own strategies! 

According to the latest reports, average American children saved almost 2.8 billion in 2020. These numbers are pretty remarkable considering the dropping savings rate among adults! 

Additionally, the average median saving for an 18-year-old is close to $1000. However, reaching this savings goal can be challenging for some young adults due to rising housing costs, student loans, and unexpected expenses! 

Expert tip: it is a good idea to discuss your financial position with your parents once you hit adulthood. Many parents are willing to sponsor college education and provide housing to their children even after they turn 18. 

So, make a list of your potential needs and wants and sit down with your parents to discuss what they are willing to cover or not cover.

This will give you a great headstart on your savings plan while providing you closure on your responsibilities! 

Why Do I Need to Save Money As an 18-year-old? 

As I discussed above, you will need money for a lot of things including education, housing, and insurance once you turn 18. All of these things combined can cost a hefty amount. And if you can’t manage to get stable a job after turning 18, managing your finances will become a nightmare. 

Therefore, kickstarting a savings plan at your parents’ home before you hit 18 is an excellent idea! 

However, you may have some confusion about how much a college education, housing, and other common expenses will cost on average. 

So, here’s a breakdown to help you figure out how much money you will need to support an independent life:

College Education:

 If you are attending an average freshman college, your monthly cost of living will be around $1500. So, it’s logical to save at least $3000 in advance. 

This fund will help you support your life in college in case you can’t find a part-time or steady job!

Living independently with a full-time job:

I advise everyone who has just started working to first build an emergency fund that secures at least three months’ worth of their expenses. 

Rent is the biggest concern you might have at this point. So, even if you don’t have enough money to build a large security fund, keep at least three months of rent in savings in case of an emergency. 

Pro tip: if you wish to avoid living paycheck to paycheck, make sure your rent isn’t more than 30-40 percent of your income!

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