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Americans are doing better with saving money, but most still don’t have enough. Here are four shocking stats to know about savings. [[{“value”:”
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Saving money is really important. Money in a savings account provides a cushion against unexpected expenses or financial hardships like a job loss.
So, how much money do Americans actually have in their savings accounts? Some of the numbers may shock you.
1. The average American has $8,000 in savings
According to recent research from The Motley Fool Ascent, the median savings account balance in the United States is $8,000. This includes money in transaction accounts, including savings and money market accounts, checking accounts, call accounts, and prepaid debit cards.
That’s an increase from 2019, when the median savings was $6,140. It’s good news that Americans have saved more, but that median balance still may mean that many people don’t have quite enough to protect against calamities.
Most experts recommend having enough to cover three to six months of living expenses, and for most people, having $8,000 in checking and savings accounts wouldn’t be enough to do that.
That’s especially true, as the Bureau of Labor Statistics reported in 2022 that the average annual expenses among all consumer units was $72,967 or around $6,080 per month.
In fact, The Motley Fool Ascent’s research also revealed that millions of Americans aren’t fully prepared for surprises, with just 54% of people actually holding three months’ worth of emergency savings in the bank.
2. The richest Americans have more than five times the savings of the upper middle class
While the average American may not be doing as well as they could be, the rich have a whole lot saved. In fact, The Motley Fool Ascent’s data showed Americans in the top 10th percentile of net worth have a median transaction account balance of $128,000.
That’s not just more than most people — it’s actually more than five times the median balance of Americans in the 75th to 89th percentile. Those in this upper-middle-class group have a median savings balance of only $41,500.
It’s expected that the rich will have more money, but the huge gap between the very wealthiest and the upper middle class shows just how great the wealth disparity is in the United States.
3. Almost half of young Americans have a separate emergency fund
The stats show some surprisingly good news for younger generations, though. Both Gen Zers and millennials are taking emergency saving far more seriously than their older counterparts. Within this age group, 40% have a separate savings account for emergencies, compared with only 32% of Gen X and baby boomers.
Growing up during the Great Recession in 2008 and the COVID-19 pandemic in 2020 may just have prompted this group to be a little more risk-averse when it comes to emergency savings.
4. 66% of Americans have their savings in the wrong account
Finally, the last shocking stat has to do with where Americans put their savings. Only 34% have their money in an account with an interest rate of at least 4.00%. Those who don’t are missing a huge opportunity in high-yield savings accounts right now.
Understanding these statistics can help you make informed choices about your own saving behaviors. You should join younger Americans in having dedicated emergency savings and find an account paying upward of 4.00%. Making these moves should help you grow your balance above the $8,000 median, so you can build more financial security for your future.
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