You May Be Shocked at What the Average American Has in Savings

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Are Americans doing well with savings? Read on to find out. 

Inflation has been making it difficult for a lot of people to save money. So if you can’t remember the last time you moved money out of your checking account and into your savings, you’re no doubt in good company.

But you may find it surprising to learn that the typical American actually has quite a bit of money saved up. In fact, new data from Northwestern Mutual reveals that the average American has $65,100 in savings.

Now, there are a few things to note about that figure. First, it doesn’t include retirement savings, like money in an IRA or 401(k). It’s also only an average. And the problem with averages in this sort of context is that they aren’t always so representative of the general population.

It may be that among those surveyed by Northwestern Mutual, there were a number of very wealthy respondents. Those few respondents could’ve pulled the average savings balance up significantly. And since we don’t have a median savings amount to compare to the average, it’s hard to get a really solid handle on what the typical American has socked away in the bank.

That said, rather than focus on what the average American has saved, a better bet is to focus on what you have saved. And if that number isn’t enough to cover at least three full months of essential living expenses, then you’ll probably want to do your best to ramp up.

You need a cushion for emergencies

Some people might have more money in savings because they’re trying to meet a specific goal, like buying a house or paying off a car. But no matter what objectives you have, you should make a point to always try to have enough cash in your savings to pay for three months of essential bills. That way, if you were to lose your job, you’d have money to fall back on.

So take a look at your monthly bills, multiply their sum by three, and compare that total to your savings balance. If you can’t cover three months of expenses, it’s time to boost your emergency fund before you run into a situation where you actually have to use it.

How to grow your savings

You may not need anywhere close to $65,100 to be covered for emergencies. But if your savings could use a lift, go through your recent bills and identify some expenses you no longer need to be paying for. Chances are, at least one or two things will fall into that category, and cutting them might help you sock more money away in the bank fairly quickly.

Another option? Get yourself a side gig. The money you earn from it will be new money — not money you’re used to collecting. So you should be able to stick all of it, except for the portion you might owe the IRS, into the bank.

And keep in mind that even if you get a side gig paying $100 a month, that’s still better than nothing. So if you can’t manage a very time-intensive gig on top of your main job, don’t sweat it.

It’s pretty surprising to see that the average savings amount is $65,100 given the number of people who barely have any money in savings at all. But remember, that number is based on one set of data, so if your savings balance is much lower but gives you coverage for three months of bills or more, you don’t have to worry or get upset about it.

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