How Much Should I Have in Savings?

Margarette BurnetteJanuary 31, 2020

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There is no one-size-fits-all answer to the question of how much money to put in your savings account. The standard recommendation is three to six months’ worth of basic expenses — but the balance varies based on your lifestyle.

If socking away such a large amount of cash seems daunting, know that with a plan in place, it’s doable. Here’s how to find out what your target balance should be and ways to quickly grow your savings.

» Looking for a high-yield account to stash your savings? Skip ahead to compare three options.

Finding your target number

To determine how much you need in savings — or what three to six months’ worth of expenses looks like for you — figure out how much you typically spend on your most important bills. You can start by reviewing recent bank and credit card statements.

Consider only essential expenses, such as rent or mortgage payments, insurance premiums, debt repayments, and spending on groceries and transportation. You want enough to keep up with your most important bills for a few months without falling into debt. You don’t necessarily need to figure in savings or spending on dining out or other entertainment — assume you’ll drastically cut those costs in an emergency.

Say your core monthly expenses total about $3,000. You’ll want to have at least three times that amount, or $9,000, in savings. For more peace of mind, you could aim for a $18,000 balance, which is about six times the monthly expense figure.

Having three to six months of expenses saved is a general rule, but you could opt to save more. If you think it would take longer than six months to find a new job if you lost yours, or if your income is irregular, then stashing away up to 12 months' worth of expenses could be a smart choice. You might also want to target a higher amount to save for optional expenses, such as occasional dining out or entertainment.

Frequently asked questions

Aim to keep about one to two months’ worth of living expenses in your checking account, and another three to six months' worth in a savings account, where it can earn greater returns.

Review recent bank and credit card statements and add up how much you typically spend on your most important bills. Consider only essential expenses, such as rent or mortgage payments, insurance premiums, debt repayments, and spending on groceries and transportation.

According to a NerdWallet survey conducted by The Harris Poll in 2019, the median balance for Americans with savings accounts ages 18-34 was $1,000; for those ages 35-44, it was $2,500; and for ages 45-54, $4,000. Read more about savings by age group in this article.

Easy ways to grow your savings account

If you don’t have the recommended amount of money in your savings account today, you can take some simple steps to get there. One of the easiest is to look for small ways to reduce optional expenses. For example, if you usually go to a restaurant for lunch every day, you could pack a lunch a few days a week. Or for weekend entertainment, consider free, community-sponsored activities. You don’t have to cut everything you enjoy — just make small tweaks to spend less cash.

You could also take on a part-time job or develop a new side hustle for added income.

» For more savings tips, read NerdWallet’s guide on how to make a savings plan.

Use recurring, automatic transfers to easily stash what you’ve saved. You can typically schedule these — each payday, for example — through your bank’s website or mobile app. That way, you’ll build your savings without much effort.

What is the average savings account interest rate?

The average savings account today earns only 0.05%. At that rate, if you had $3,000 in your account for a year, you’d earn just a few dollars in interest.

On the other hand, if you put that same $3,000 in a high-yield savings account that earns a 1.70% annual percentage yield, it would earn more than $50 after a year. That may not make you rich, but it can help you build your savings balance faster. That interest also earns interest over time, which helps you save even more.

Here are three account options that earn more than the national average.

Savings comparison

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With $0 minimum balance



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Use NerdWallet’s savings calculator to add up how much your own savings balance could grow.

Looking ahead

When you have a good reserve fund, and if you’re fortunate enough to have money to spare, you may want to look into ways to earn even higher yields. Certificates of deposit, for example, often earn higher rates than savings accounts, and are an option if you don’t need fast access to your cash. Check out NerdWallet’s list of best CDs to learn about current rates.

You could also look into investing in securities. This is a longer-term strategy to grow wealth, and returns — while often higher than savings account yields — are not guaranteed. Read NerdWallet’s guide on how to invest money to learn more.

The recommended amount of money to have in savings is different for each person. But as long as you make deposits on a regular basis and make sure you earn an attractive interest rate, you can know that you’re building a savings balance that is just right for you.

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