The average American has this much in savings. How do you compare?

Image Source: Getty Images

Are your savings on par with the typical American?

Key Point

• There are varying estimates of what Americans have saved.
• We encourage you to focus on your personal needs and goals, rather than what the typical person is obsessed with.

If you’re curious about how well Americans are doing on the savings side, you’re probably in good company. But if you want to know how your savings accumulate, financial guru Graham Stephens may have the answer.

and recent tweets, Stefan said the average American household has $10,000 in savings. First of all, it’s just an estimate, it’s also an estimate at the household level, not the individual level.

But how much inventory do you need to put in that $10,000 average, and is that the right amount of savings you should be aiming for?

Why the average American’s savings balance doesn’t matter

There is nothing wrong with wanting to know what the typical saver puts in the bank. But should personal savings goals be set based on what the average American has?

For one thing, your needs and goals may differ. They may also earn more or less than the typical American, which tends to affect their ability to save. So don’t get hung up on average numbers, think about your needs.

How much cash should I keep on hand for emergencies?

As a general practice, it’s a good idea to have an emergency fund with enough funds to cover the required bills for 3 to 6 months. (Some experts urge him to aim higher, especially in the wake of the 2020 pandemic and the financial crisis it caused.)

If you happen to spend $2,500 a month, you might decide that setting aside $10,000, equivalent to four months’ living expenses, for emergencies is a good goal. But when he spends $5,000 a month on essentials, in fact his $10,000 emergency fund falls short of his three-month minimum.

What are your short-term financial goals?

You may be prepared for an emergency, but you want to save money to buy a house or upgrade your car. Your savings amount should reflect your personal goals and choices.

Let’s say you already own a home and have a fully paid off car. In that case, you may have less savings than someone trying to rack up enough cash to buy those things – and that’s fine.

focus on yourself

You may want to take comfort in knowing that your savings are on par with a typical US household.

By one estimate, the average household savings is $10,000. But even with $7,000 in savings, you may be in better shape financially. So while it’s okay to be concerned about Americans’ savings habits, don’t get too hung up on the statistics you see.