How much money should you have?

There is no one-size-fits-all answer, and no set amount you need to have saved by a certain age. Income, initial situation, education and life circumstances vary greatly. Comparisons don’t really matter. The more important question is: Am I on the right financial track – given my current life circumstances and goals?

Because numbers mean little without context. The figure “CHF 150,000 by age 30” can often be down to factors like a high salary, family support or starting work at a young age. In addition, social media often shows only the extremes and not the reality of the majority.

Very. Income acts as a multiplier: Someone who earns CHF 10,000 and spends CHF 5,000 can save significantly more than someone with an income of CHF 6,000 and the same expenses. Even disciplined saving won’t fully close this gap.

Three things in particular: any financial support you may have received, your educational and career path, and the industry you work in.

For example, has your family helped you with your first apartment, your own car or a trip abroad? Did you start working relatively young, or did you go to college, serve in the military or spend a year abroad? In addition, for the same qualifications, pay varies greatly across different industries. All of this influences how your start out financially.

To get a realistic picture of your financial situation, the median is usually much more meaningful, as it represents the middle: 50 percent have more, 50 percent have less. The average, on the other hand, can be heavily skewed by very large amounts.

For example: If nine people each earn CHF 10,000 and one person CHF 100,000, the average is CHF 19,000. The median, however, is only CHF 10,000. 

An emergency fund is money that isn’t invested and is always available. As a rule of thumb, it should be about three months’ pay. It helps cover unexpected expenses, such as a broken laptop, a move or car repairs, without forcing you to get into debt or dip into your investments.

These four steps will give you a solid foundation:

1. Build up an emergency fund – about three months’ pay
2. Get a handle on your budget
3. Make regular contributions to your 3a pension plan
4. Start making your first investments

The last step is really easy – with a savings plan in mutual funds or ETFs for example – and you can often start with as little as CHF 50 a month. 

As your income rises, two issues become increasingly important: optimizing your pillar 3a account and building long-term wealth. With a pillar 3a account, for example, you can reduce your tax burden while taking advantage of the long investment horizon leading up to retirement.

Due to the compound interest effect. The compound interest effect means you earn returns not only on the money you’ve invested, but also, over time, on the returns you’ve already earned.

No. Your emergency fund needs to remain liquid and accessible at all times. Otherwise, it won’t serve its purpose. Invest only money that you won’t need for the long term. This way, your financial security will remain intact even in turbulent times.

Not necessarily. Pillar 3a is often overlooked when looking at your assets, but it’s an important part of your retirement planning. Even small, regular contributions can make a big difference over the years. 

Think in terms of milestones rather than final amounts. Take things one step at a time and set realistic goals. Set up automatic deposits into your 3a account or savings plan, and be sure to leave room for personal expenses. Managing your finances isn’t a race – it’s all about finding your own pace.