Here's How Much Americans Have Saved and How Much They Should Save
The numbers show that most Americans aren't saving enough to cover a few months of expenses, according to Bankrate.
Analysis of inflation-adjusted data from the Federal Reserve showed that the typical American household has $8,863 in savings, with single and younger adults having even less.
Individuals are able to save more when they manage their spending. “The ultimate destination should be enough to cover six months’ expenses, perhaps nine to 12 months for sole breadwinners or self-employed individuals,” says Greg McBride, CFA, chief financial analyst for Bankrate.com. According to the 2017 Consumer Expenditure Survey, the average consumer had about $13,150 before tax left over after covering their expenses.
23 percent of individuals have no emergency savings at all.
Financial advisers recommend individuals put away 20 percent of their income into retirement plans or other forms of savings accounts. The most important aspect of this process is consistency. “The habit of saving can be more important than the actual amount you currently have because the ultimate goal — say, six months’ expenses — is a moving target,” he says. “In your 20s and 30s, expenses often grow faster than the ability to save, but as earnings grow and you set more aside for savings, you can get closer to the target goal when monthly expenses level off.”