How Much Should I Have in Savings? - NerdWallet (2024)

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How much savings should I have?

There is no one-size-fits-all answer to the question of how much money you should have in your savings account. The standard recommendation is to have enough to cover three to six months’ worth of basic expenses. As a goal, that number can be steep. In reality, you can benefit from saving any amount.

When it comes to setting your target, the right number for you will take into account your expenses and how much you’re able to save consistently.

Find your target savings number

To determine how much you need in savings, it helps to know how much you’ll need to keep up with your most important bills for a few months if you lose income. To start, figure out how much you typically spend to pay your bills. You can do this by reviewing recent bank and credit card statements.

Consider the essential expenses, such as rent or mortgage payments, insurance premiums, loan and other debt payments, as well as spending on groceries and transportation. Don’t include expenses that you’d cut in an emergency, such as concerts.

» Need help paying bills? Read more on how to prioritize your bills and find help

Save consistently

Say your core monthly expenses total about $3,000. Having enough saved to cover three to six months' worth of expenses means you’ll need to have between $9,000 and $18,000 saved. You can use this savings goal calculator to see how much you'd need to save every month to save up for your goal, depending on when you hope to achieve it.

If putting away that amount of money is daunting, try not to focus on the end amount. Saving money consistently, regardless of amount, is how you can build financial security. If you get paid once a week and you’re able to save $25 with each paycheck, you’ll have about $650 saved after six months. That could potentially pay for an unexpected expense without your having to take on debt.

Consider setting up a recurring auto transfer from your checking to your savings account. As long as it won't cause you to overdraft your account, it's a good tool for maintaining consistency.

» For more savings tips, read NerdWallet’s guide on how to make a savings plan

🤓Nerdy Tip

Savings accounts at banks are federally insured by the Federal Deposit Insurance Corp. (and by the National Credit Union Administration for credit union accounts), up to $250,000 per depositor, for each ownership category (such as joint accounts and single accounts), per insured institution.

You could also look for small ways to reduce optional expenses and then put that extra cash into an FDIC- or NCUA-insured emergency fund. For example, consider free, community-sponsored activities for weekend entertainment. You don’t have to cut everything you enjoy — but sometimes small tweaks can help you save more cash.

» Want to explore more? Read about ways to earn extra money

Maximize your savings

How Much Should I Have in Savings? - NerdWallet (5)

» LISTEN: NerdWallet's Smart Money podcast explores how to score a bank bonus

Once you have a plan to save regularly, make your money work hard for you by depositing it into a high-yield savings account. The best savings accounts have low or no monthly fees and earn strong rates.

Consider that the average rate for savings is only 0.46%, according to the FDIC. And some of the largest banks have savings accounts that earn only a 0.01% annual percentage yield. With that yield, if you deposited $3,000, you’d earn less than $15 in interest after a year.

On the other hand, if you put that same $3,000 in a high-yield savings account that earns a 4% APY, it would earn more than $120 after a year. That’s a nice chunk of money for simply picking a better account, one that earns much more than the FDIC average. And that interest also earns interest over time. This is called compound interest, and it helps your savings grow even more.

Use NerdWallet’s savings calculator to add up how much your savings balance could grow.

» Ready to start earning higher yields? Learn about the best places to save money and earn interest

Save smarter with Max

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Save for nonemergencies

Building an emergency fund is important for your financial health, but you might have other savings goals, too.

Saving for a rainy day (or a fun one)

Once you’ve built up your emergency fund, consider saving for expenses that aren’t necessarily emergencies but also aren’t part of your regular budget (think replacing an older appliance or taking care of minor home maintenance needs). For those types of costs, consider creating a rainy day fund in a separate savings account.

You could also treat yourself by opening a savings account for something fun, such as a vacation.

Keep savings for different goals separate to avoid dipping into emergency funds for nonemergencies. Some banks and credit unions allow you to open several subaccounts for different savings goals, helping you stay organized.

Other types of savings accounts

If you’re fortunate enough to have money to spare, consider ways to earn even higher yields. Certificates of deposit, for example, often earn higher rates than savings accounts and are an option if you don’t need access to your cash for months or years. As with savings accounts, CDs are also federally insured up to $250,000 per depositor. Check out NerdWallet’s list of best CDs to learn about current rates.

Money markets are another type of savings account, but unlike regular savings options, some MMAs come with debit cards and the ability to write a few checks each month. However, some MMAs also have higher deposit minimums and monthly fees. The best MMAs have lower fees and competitive rates.

»MORE: Should I keep accounts open at multiple banks?

Investing and saving for retirement

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If your goal is to save larger amounts of money, you could also look into investing. This is a longer-term strategy to grow wealth. Returns can be higher than savings account yields, but they are not guaranteed. Read NerdWallet’s guide on how to invest money to learn more.

Saving for retirement is another consideration. There are special accounts, including individual retirement accounts and 401(k) plans, that give tax advantages for saving until you are close to or at retirement. Read NerdWallet’s primers on IRAs and 401(k) plans to learn about these accounts and how to determine your target retirement savings amount. The earlier you start saving for retirement, the more time your money will have to potentially grow. You can use this retirement calculator to try out different scenarios to see how much you could have in your retirement account at different ages.

The recommended amount of money to have in savings is different for each person. But as long as you make deposits regularly and make sure you earn an attractive interest rate, you can build a savings balance that is right for you.

Frequently asked questions

How much money should I keep in savings vs. checking?

For savings, aim to keep three to six months' worth of expenses in a high-yield savings account, but note that any amount can be beneficial in a financial emergency. For checking, an ideal amount is generally one to two months’ worth of living expenses plus a 30% buffer.

How do I estimate three to six months of living expenses?

Review recent bank and credit card statements and add up how much you typically spend on your most important bills. Consider only essential expenses, such as rent or mortgage payments, insurance premiums, debt repayments, and spending on groceries and transportation.

What are features of the best savings accounts?

The best savings accounts tend to have high annual percentage yields and low or no monthly fees. Many tend to be online savings accounts. Online banks are federally insured — just like big banks. They are able to save the cost of branches and bank tellers, and they can pass the savings on to customers in the form of low fees and strong rates.

How Much Should I Have in Savings? - NerdWallet (2024)


How Much Should I Have in Savings? - NerdWallet? ›

Overall, there is no one answer for how much you should have in savings, but an ideal target for an emergency fund is enough to cover three to six months' worth of basic expenses. If you're able to save 20% of your take-home income each month, for example, you may be well on your way.

How much should I realistically have in savings? ›

Rule of thumb? Aim to have three to six months' worth of expenses set aside. To figure out how much you should have saved for emergencies, simply multiply the amount of money you spend each month on expenses by either three or six months to get your target goal amount.

How many people have $3000000 in savings in the USA? ›

This effectively means the top 1% are those with more than $10 million (~25m) and the top 0.1% are those with roughly $1 billion. There are estimated to be a little over 8 million households in the US with a net worth of $3 million or more. I very much doubt that any of them have that amount in savings.

Is $5,000 enough for savings? ›

Saving $5,000 in an emergency fund can be enough for some people, but it is unlikely sufficient for a family. The amount you need in your emergency fund depends on your unique financial situation.

What is a good amount to have in my savings account? ›

Most financial experts suggest you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000. Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.

Is having 100k in savings rich? ›

There's no one-size-fits-all number in your bank or investment account that means you've achieved this stability, but $100,000 is a good amount to aim for. For most people, it's not anywhere near enough to retire on, but accumulating that much cash is usually a sign that something's going right with your finances.

Is 20K in savings good? ›

While $20K may not let you quit your job, it's enough to start building financial security, whether you max out your retirement accounts, invest in fine art, or divide your cash between multiple investments.

What salary is considered wealthy? ›

In 2017, a salary of about $378,000 would land you in the 5% club. By 2022, the salary it takes to stay at that level is more than $544,000.

How many Americans have $100,000 saved? ›

14% of Americans Have $100,000 Saved for Retirement

Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.

How much money is considered wealthy? ›

The amount you need to earn to be considered wealthy also varies depending on the metrics used. According to IRS standards, a monthly income of approximately $45,000 qualifies someone as wealthy.

Is saving $1,000 a month realistic? ›

If you start by contributing $1,000 a month to a retirement account at age 30 or younger, your savings could be worth more than $1 million by the time you retire. Here's how much you should expect to have in your account by the time you retire at 67: If you start at 20 years old you should have $2,024,222 saved.

Is $500 a month enough saving? ›

The short answer to what happens if you invest $500 a month is that you'll almost certainly build wealth over time. In fact, if you keep investing that $500 every month for 40 years, you could become a millionaire. More than a millionaire, in fact.

How much money do you need to live off interest? ›

Key takeaways: The typical American making $40,480 a year needs at least $826k invested with a 4.9% annual return to live off interest alone. Estimate how much you need invested to live off interest with the formula: Annual income / Annual interest rate = Savings goal.

How much does the average person have in savings? ›

In terms of savings accounts specifically, you'll likely find different estimates from different sources. The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.

How much cash should I have on hand at home? ›

“We would recommend between $100 to $300 of cash in your wallet, but also having a reserve of $1,000 or so in a safe at home,” Anderson says. Depending on your spending habits, a couple hundred dollars may be more than enough for your daily expenses or not enough.

How much is too much cash in savings? ›

How much is too much savings? Keeping too much of your money in savings could mean missing out on the chance to earn higher returns elsewhere. It's also important to keep FDIC limits in mind. Anything over $250,000 in savings may not be protected in the rare event that your bank fails.

How much should a 30 year old have saved? ›

Fidelity suggests 1x your income

So the average 30-year-old should have $50,000 to $60,000 saved by Fidelity's standards. Assuming that your income stays at $50,000 over time, here are financial milestones by decade. These goals aren't set in stone. Other financial planners suggest slightly different targets.

What is the average savings for a 30 year old? ›

Average Savings by Age 30

According to the latest Survey of Consumer Finances, the average savings in transaction accounts for this group was $11,250, and the median was $3,240, in 2019. If you have more than this in your savings account at 30, you have more than many of your peers.

How much money should a 20 year old have saved? ›

Financial experts typically recommend saving up three to six months' worth of necessary expenses in order to have a healthy, fully-funded emergency account. So, there's no specific number that a person in their twenties needs to have in their emergency fund — it should be based on their necessary monthly expenses.

How much should I have saved by 30? ›

How much money you should have saved by 30? If you're 30 and wondering how much you should have saved, experts say this is the age where you should have the equivalent of one year's worth of your salary in the bank. So if you're making $50,000, that's the amount of money you should have saved by 30.

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