How Much Does the Average American Have Saved?

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How does your savings account balance stack up to that of your peers? 

Saving money is crucial to your financial well-being. You need to have money set aside in a high-yield savings account for short-term needs such as potential emergencies or purchases you are likely to make soon. You should also have long-term savings invested in a brokerage account so you can earn returns that help you grow your wealth.

The good news is, many people have been saving more during the COVID-19 pandemic. Plus, many of those individuals who have increased their savings rate report that they intend to continue setting aside additional funds going forward, even though the average amount of savings among American households has ticked down in 2022 compared with the prior year.

So, just how much does the average American have saved? Here’s what you need to know.

The average amount of personal savings in the U.S.

According to the Northwestern Mutual Planning and Progress Survey for 2022, the average amount of personal savings in 2022 came in at $62,000. This is a considerable decrease from the $73,000 average amount of personal savings reported on the same survey in 2021.

It is something of a surprise that personal savings balances went down this year, especially given that the same research showed 60% of people said they had been able to build up their personal savings over the previous two years and 69% of those individuals indicated that they intend to continue to save at the same elevated rate going forward.

The pandemic actually helped many people develop more positive savings habits. How so? Government stimulus money offered some extra cash, and lockdowns and travel restrictions made it more difficult to spend money on entertainment and other discretionary expenses.

Since these restrictions have been lifted and since the government handed out less stimulus money this year, these two factors alone could help explain why personal savings balances are not as high as they were in the recent past.

What should you do if your savings falls short?

If you have far less personal savings than the average, don’t be discouraged. Averages can be increased by people with very large amounts of savings, so remember there are probably many people who are in your same position or who have even less saved than you do.

While you shouldn’t get upset if your balance is lower than you’d like, you should be proactive in trying to change that. To do that, make a commitment to treat saving as a priority. You can, and should, set clear financial goals, determine how much you need to save each month to achieve them, and make this a “must-pay” bill when you set a budget.

If you treat your savings as essential, just like rent or your mortgage and food, you’ll be less likely to put it off until the end of the month when you have nothing left. In fact, once you’ve decided how much you want to save, you can set up an automatic transfer of the funds directly from your bank account on payday so the money gets where you need it to. This is a surefire way to bring your savings account balance up so you can equal or exceed the averages.

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