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“You can save £30k-£35k a year as a junior banker”

Saving money as a junior banker

Stay away from high spending colleagues

Junior bankers can earn a lot of money. They can also spent a lot of money. Living near the office in a leading financial centre like London doesn’t come cheaply and if you’re not careful, the two things can cancel each other out. So, can you really save money as a junior banker? And can you save enough to buy a house?

The answer to the first question is a resounding yes. The answer to the second question is a qualified yes.

“Living close to the office is a must as an IBD analyst,” says one 24 year-old banker, speaking off the record. “Your hours mean you value every second of spare time you have, and the closer you live, the more sleep you can get. Ideally, you hope to live 10-15 minutes away.”

In London, this is expensive: “Rent for these flats is ~£400-500 a week for a 1-bedroom, or £600-700 for a double (which you share). This represents a large chunk of your after-tax income,” he says.

The good news, is that your other costs will be low, or non-existent. “Apart from rent, analysts have virtually no other outgoings,” he adds. “After 10pm, banks give you free food, and a free car home. Any spare time you have is spent sleeping, and any drinks you go to with employees are usually paid for by senior bankers.”

As a result, he says young bankers are able to save most – or all – of their bonuses. “As a junior, none of the bonus is deferred, so you get it all upfront. What this basically implies is that as an analyst it is feasible to save £30/35k a year.”

Other juniors agree in principal. “Living costs are high, but you can definitely save money,” says one recently ex-Goldman trader. “You’re working long hours and you don’t take much holiday, so you end up putting money aside. That said, it’s impossible to save enough to actually buy anywhere near work. Most people just save so that they can buy somewhere in the future.”

With even a studio apartment in Central London costing £454k, the bankers we spoke to said no one buys their own place to begin with unless they’re helped out by parents. Instead, most young bankers try to live frugally and have a large enough deposit once they’re five or six years in – at senior associate and vice president level.

“I got a couple of good bonuses in my associate years and they enabled me to buy a very, very small place near to work,” says one saleswoman. “I was lucky though – most people take longer, and if you’re being dragged towards people with higher spending power than you, it’s almost impossible to save. You need to keep living like your uni friends who are working in other industries.”

One of the analysts we spoke to said she’s living with her parents. “I am saving – much more than I would if I worked in any other sector,” she told us.

An executive director at Goldman Sachs told he’s saved, “a reasonable amount” over a seven year period: “I bought a flat three years ago, I travel a lot and I still have a good amount of savings.”

The ED says saving money in banking is, “a question of lifestyle and how good you are at managing your money. – I am not frugal but I am not extravagant either. Not all my earnings are eaten up by my own cost of living; so I have managed to save money nearly every month since I started as a graduate. Some people are extravagant and careless with their money, so they don’t save anything.”

Sam Polk, the ex-BofA trader who wrote about getting addicted to money while working on Wall Street said of course you can save when you’re working in banking – that’s the whole point. “The thing about Wall Street is that while you think about money all the time (how big your bonus is going to be), you never have to worry about it in the way that regular folks do. After that first bonus, you basically always have a cushion, and within a few years there’s basically nothing, except houses, that you can’t afford.”


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