56% of Gen Zers Can’t Cover 3 Months of Bills From Savings. Do These Things to Boost Yours

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Many younger Americans don’t have the cash reserves to cover 90 days of expenses. Read on for ways to grow your savings into an adequate emergency fund. 

Many Americans struggled financially in 2023 due to persistent inflation. And younger Americans were no exception. It’s therefore not surprising to learn that as of last year, 56% of Gen Zers aged 18 to 26 could not pay for three months of living expenses out of savings, according to data from Bank of America.

That’s problematic, though, because when it comes to emergency savings, the general consensus is that it’s important to have enough cash in the bank to pay for three months of essential bills at a minimum. The logic is that if you were to lose your job, it might take you three months from start to finish to find a new one. And without an adequate savings account balance, you might have to resort to debt to pay your bills. That’s debt that could linger for a long time, especially if you have to fall back on a credit card with a high interest rate.

If your emergency fund needs work, there are a couple of things you can do to boost it. And the sooner you do, the better.

Cut back on spending

You may be surprised at how much impact mindful spending has on your savings. Cutting back on every single luxury you enjoy is no way to live. But if you look carefully at your current set of bills, you may find that there are several things you’re paying for that you can pretty easily do without.

Imagine you’re currently spending $50 a month on a gym membership you use once a week at best. Could you replace that workout with one you do at home, or on a walking trail? If so, that’s an extra $600 a year that could go into your savings.

Similarly, maybe you enjoy ordering takeout twice a week. That’s understandable. But could you manage with one takeout meal a week? If so, you might conceivably save $20 a week by replacing one ordered meal with food you cook. That’s over $1,000 saved in the course of a year.

Join the gig economy

If your emergency fund is nowhere close to covering three months of essential bills, then it might take more than just cutting some expenses to give it the boost it needs. To that end, it pays to look at the gig economy.

There are many flexible side jobs you can take on that have the potential to put a nice amount of cash in your pocket. You could drive for a ride-hailing service, work for a delivery service like DoorDash or Instacart, or even see if there’s work you can do from home at your own pace, like data entry. The latter may be a good option if you don’t have access to a car.

RELATED: Emergency Fund Calculator

It’s important to set yourself up with enough savings to get through a financial emergency, whether it’s the loss of your job or an expensive home or vehicle repair. You may not get to three months’ worth of savings this month or next. But do your best to slowly but surely work your way toward that point over time so you’re able to get there eventually.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Bank of America is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has positions in Bank of America. The Motley Fool has positions in and recommends Bank of America. The Motley Fool has a disclosure policy.

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