[Must-read for young people] How much should you have saved by 30? How to grow your wealth?

2025-02-24

8 Mins Read

How much should you have saved by 30 | Challenges you may face at 30
How to grow your wealth before 30 | Basic concepts and features of savings insurance
Choosing the right savings insurance plan | WealthAhead Savings Plan

With the cost of living continuously rising and salary increases failing to keep up with inflation, young people face multiple financial challenges, making saving an essential topic. By the time you reach 30, whether it is buying a home, supporting a family, or planning for retirement, financial management is no longer an option—it is a necessity.

In Hong Kong, the belief in ‘standing firm by 30’ is deeply ingrained. This age marks a significant turning point in life, as well as a crucial time to assess and carefully plan your finances. Many people ask, ‘How much should I have saved by 30? How can I save money in a way that meets my current needs while also securing my future?’ While there is no fixed answer, these questions highlight the importance of saving. Savings are the foundation of financial management. In this article, we will explore the financial goals you should aim for by 30 and effective saving strategies to help you navigate challenges with confidence and lay a solid foundation for your personal goals.

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How much should you have saved by 30?

Harvard financial expert Elizabeth Warren introduced the ‘50/30/20’ rule, providing young people with a practical savings guideline:

50% of income should go towards essential living expenses, such as rent and food.
30% of income should be allocated to personal needs, such as entertainment and education, to enhance quality of life and skills.
20% of income should be saved to build a solid financial foundation for the future.

Based on this rule, we can estimate a general savings benchmark for those reaching 30. Below is a practical calculation example:

1. Aged 22–24 (First job after graduation):

With an average monthly income of HKD14,000*, saving 20% means putting aside HKD 2,800 per month.
This amounts to HKD 33,600 per year, accumulating over HKD 100,000 in three years.

2. Aged 25–30 (Financial stability phase):

With income increasing to HKD 21,200 per month*, the 20% savings portion rises to HKD 4,240 per month.
This results in HKD 50,880 in annual savings, accumulating HKD 305,000 over six years.

According to these calculations, one can save over HKD 100,000 in three years from age 22 to 24, and can save HKD 305,000 in six years from age 25 to 30. Therefore, the estimated savings amount for a 30-year-old is around HKD 400,000—and this figure only accounts for savings from salary income. Of course, everyone's experiences and situations vary, so the numbers mentioned are just for reference.

How much do you think one should have saved by 30? Are you satisfied with your current savings? While there is no fixed answer, one thing is certain: time is money—the earlier you start saving, the easier it becomes!

Challenges you may face at 30

With age comes new challenges, and financial responsibilities tend to increase as well. Here are some key challenges you may encounter at 30:

Career reflection and growth

Turning 30 marks the transition into the next phase of life, which may bring changes in identity, lifestyle, and career aspirations. Perhaps there will be confusion about the future, or perhaps there is a desire to pursue more room for development. You may find yourself at a crossroads—seeking job stability while also longing to take risks to achieve personal goals, such as starting a business or pursuing further education.

Family responsibilities begin

At 30, family responsibilities often come into focus. Questions like ‘When will you buy a home?’, ‘Are you getting married?’, ‘Thinking of having children?’, or ‘Have you started investing?’ frequently arise during family gatherings. Whether you are starting a family or supporting ageing parents, these responsibilities require both emotional and financial readiness. It’s not just about managing your own life—it’s also about fulfilling commitments to others.

Balancing multiple roles

As a professional, partner, family member, friend, and possibly even a parent, you will need to juggle multiple roles. Your time and energy will be divided across different aspects of life.

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How to grow your wealth before 30

Saving is just the beginning. Developing sound financial habits, maintaining strict discipline, and effectively utilising your savings to grow your wealth are key to accumulating wealth.

1. Optimise savings ratio and asset allocation

According to the 50/30/20 savings rule, 20% of your monthly income should be saved to ensure financial health. However, to achieve higher asset growth, it’s recommended to refine your savings strategy. Divide the 20% into two parts: one portion should be allocated for emergency reserves, and the other should be invested in stable, low-risk medium to long-term wealth management tools, such as savings insurance. This approach balances risk and return, ensuring the stability of long-term asset growth.

2. Learn financial knowledge

Utilising various financial tools is essential to maximise the growth potential of your assets. Gaining financial knowledge is the key to improving your financial management skills. Participating in financial courses, reading related books, or seeking advice from professional consultants are effective ways to enhance your financial capabilities. Continuous learning will help you make wiser decisions, set specific, achievable goals, and manage your finances efficiently, paving the way for future success.

3. Develop a consistent saving habit

With the high cost of living in Hong Kong and the many temptations to spend, it is crucial to resist these temptations and cultivate a regular saving habit. To ensure that saving remains consistent, consider investing in savings insurance and allocating a portion of your monthly income towards paying premiums. Insurance companies can automatically deduct the premiums from your designated bank account each month. This automation not only helps resist spending temptations but also ensures the stability of your savings plan, preventing unnecessary expenses from disrupting your long-term financial strategy.

4. Plan for the long term

By the age of 30, it’s important to start thinking about long-term financial security, so retirement planning should not be overlooked. Choose a suitable retirement plan and make regular contributions. Early investment can leverage the power of compound interest, allowing your assets to grow over time and ensuring a worry-free life after retirement.

Turning 30 marks the prime stage of your career and the ideal time to take financial planning seriously. If you have limited funds, lack financial knowledge, or simply do not have the time to manage your personal finances but still wish to achieve stable wealth growth, savings insurance could be a suitable wealth management tool.

Take AXA’s latest ‘WealthAhead Savings Plan’ as an example—this plan features an ultra-short premium payment term of 2 years, with an affordable premium starting from just USD 10,000 per year. Additionally, policyholders can choose from USD, RMB, or HKD as their policy currency, providing greater flexibility in financial planning. This allows you to take control of your financial future, kickstart your wealth-building journey, and move step by step towards achieving your goals.

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Basic concepts and features of savings insurance

What is savings insurance?

Savings insurance is a wealth management product that combines life insurance with a savings function. It not only provides life protection but also serves as a tool for wealth growth.

How can savings insurance help grow your wealth?

Fundamental life protection: If the insured person passes away during the coverage period, the beneficiaries will receive a payout, offering financial support to the family.
Potential for capital growth: The compound interest effect is a key mechanism in savings insurance that enables wealth to grow over time and achieve long-term wealth appreciation. For young individuals, starting early allows them to maximise the benefits of compound growth, potentially leading to substantial returns in the future. The longer the investment horizon, the greater the impact of compounding—making early participation in savings insurance a powerful strategy for wealth accumulation.
Risk management: Savings insurance carries relatively low risk. Insurance companies typically offer a guaranteed cash value within savings insurance policies. Additionally, savings insurance often allocates funds across diversified assets to mitigate risk, particularly for participating savings insurance policies which may invest in listed equities, corporate bonds, government bonds, real estate, and private equities which usually have high entry requirements. This diversified approach reduces exposure to individual asset risks while enhancing portfolio stability and security. Over the long term, young individuals can leverage savings insurance to achieve a balance between wealth growth and risk management, ensuring strong support for their overall financial planning.

As a result, a savings plan is an attractive option for young individuals seeking long-term wealth growth. For instance, AXA’s latest ‘WealthAhead Savings Plan’ offers both wealth accumulation potential and life protection. It features an ultra-short premium payment term of 2 years, enabling policyholders to kickstart their wealth-building journey swiftly while unlocking substantial potential returns to achieve their life goals.

Application of savings insurance to meet the needs at different stages of life

Mid-term needs

Starting a family and planning for children’s future are significant milestones for many young individuals, often requiring a stable financial foundation. As a relatively low-risk financial tool, savings insurance can effectively support these mid-term needs. Over time, as the policy value accumulates, it offers considerable wealth growth potential, which can help cover major future expenses, such as children’s overseas education.

For example, AXA’s latest ‘WealthAhead Savings Plan’ provides flexibility, allowing policyholders to withdraw policy value when needed. It also enables unlimited changes of the insured³ and designation of a contingent owner, making it adaptable to the evolving financial needs of a growing family.

Long-term needs

When planning for long-term financial security, particularly for retirement, savings insurance serves as an effective wealth accumulation tool. The compounding effect over time allows policyholders to build a financial reserve, offering financial stability in later years. By gradually accumulating funds, young individuals can better prepare for uncertainties while safeguarding their quality of life in retirement. Additionally, savings insurance can support wealth transfer, ensuring that your legacy is passed on to your children after you are gone.

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Choosing the right savings insurance plan

When selecting a savings insurance plan, consider the following key factors before making a decision:

Insurance company’s credit rating and reputation – Choose a financially strong and reputable insurer to ensure the security of your assets.
Expected returns and fulfilment ratios – Compare the expected returns of different policies and review the insurer’s past fulfilment ratios. Opt for a company with a stable track record.
Policy flexibility – Look for policies that offer flexibility, such as the ability to change the insured at any time or split the policy to ensure effective wealth transfer.
Policy currency options – Select an insurer that provides multiple policy currency options to meet your financial needs.
Policy term and premium payment period – Choose an investment objective that aligns with your financial goals, as well as your preferred policy terms and premium payment period. For example, a two-year short-term premium payment option can help you avoid long-term financial commitments.

AXA Limited Offer – WealthAhead Savings Plan key features^:

2-year premium payment term – projected total cash value equals 315% of the total premiums paid at the end of the 20th policy year¹
Enjoy 6.8% p.a. guaranteed preferential interest rate for the first year on prepaid premiums²
Divide your policy into multiple separate policies for added flexibility
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Change the insured as many times as needed for effective wealth succession
Continue your legacy planning with contingent policy ownership
Name a contingent insured for life protection and wealth planning
Flexible death benefit options for better family protection

^Terms and conditions apply. For full details on product terms, conditions, and exclusions, please refer to the product brochure and policy contract.

How to ensure your savings goals are met?

Regularly review your financial status

To stay on track with your savings goals, it is essential to review your financial situation regularly. Conduct an annual assessment of your savings progress, income changes, spending patterns, and investment returns. Making necessary adjustments based on your current financial status allows you to adapt to life changes while ensuring your savings plan remains aligned with your goals.

Seek professional financial advice

With the support of an insurance provider or an independent financial adviser, you can develop a savings plan tailored to your specific needs, optimising your wealth accumulation strategy and ensuring the best allocation of funds.

Stay patient and committed to your plan

One of the key advantages of medium- to long-term savings insurance is its potential for substantial returns over time. Patience is crucial—while short-term gains may not always be visible, consistent contributions will lead to wealth accumulation in the long run. By staying focused on your long-term objectives and avoiding overreacting to short-term market fluctuations, you can fully benefit from the steady growth that savings insurance offers.

Start saving wisely now and take the first step to financial freedom

Saving is not only the starting point of financial management but also the cornerstone of future wealth growth. For young people, starting to save early is crucial as it lays the foundation for various life goals in the future. Are you in your ‘thirties and standing firm’ and looking to be ‘free from confusion by forty’? Whether it's building a family or planning for retirement, the compounding effect of early savings will give you more options and security for the years ahead.

Of course, there are many ways to save. You can flexibly use savings insurance as part of your wealth-building strategy, tailored to your personal needs. AXA’s latest WealthAhead Savings Plan is a solid choice, offering not only life protection but also substantial potential returns to help you achieve your future financial goals. Remember, saving is a long-term marathon—patience and perseverance are the keys to success. On this journey, AXA will be by your side, helping you accumulate wealth and creating more opportunities for your prosperous future.

*Source: Census and Statistics Department (https://www.censtatd.gov.hk/en/wbr.html?ecode=B10500142023AN23&scode=210)

1. It refers to the projected total cash value equals 315% of the total premiums paid at the end of the 20th policy year (which translates into a projected total Internal Rate of Return of 6.06% p.a.). The projected values are for reference only and based on certain assumptions, including but not limited to USD is selected as the policy currency, annual premium payment mode is chosen, all premiums are paid in full when due, no benefits have been paid, and no withdrawals or other policy options have been exercised. These projected values are not guaranteed and is projected based on the Company's current assumed bonus scale. The actual values may be higher or lower than these projected values.

2. The policy currency must be USD and a lump sum payment equal to twice the initial annual premium of the basic plan must be made upon policy application. Terms and conditions apply. For details and exclusions, please refer to the related promotion leaflet.

3. The Change of Insured Option can be exercised an unlimited number of times. Written application for the exercise of the Change of Insured Option should be made by you and such application is subject to the administrative rules, underwriting requirements and approval of the Company.

All product content mentioned above is subject to terms and conditions. For detailed terms, conditions and exclusions of the plan, please refer to the related product brochure and policy contract.

WealthAhead Savings Plan is underwritten by AXA China Region Insurance Company (Bermuda) Limited (Incorporated inBermuda with limited liability) (“AXA”).

No warranty or responsibility is assumed by AXA Hong Kong and our related or holding companies regarding non-infringement, security, accuracy, completeness, adequacy, reasonableness, fitness for a purpose or free from computer viruses in connection with the information and materials provided. AXA Hong Kong and our related companies and holding companies do not accept any liability for any loss, damage, cost or other expense, whether wholly or partially, directly or indirectly, arising from any error, inaccuracy or omission of the information and materials to the extent that such liability is not excluded by law.