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How Much Money Should You Have In Your Savings Account?

By Chime Team
February 17, 2017

How much money is enough money? The answer in everyone’s heart is probably ‘all of it, thank you very much.’ Barring a lottery win or a long lost aunt naming you the beneficiary of her entire estate, you’re probably on your own for building your savings.

The reality is that  Americans are notoriously bad savers – 69% of Americans have less than $1,000 saved, and 34% have nothing saved. And many times the reason for putting off stashing away those savings is simply not knowing where to start. 

Today we’ll explore answers to question: “How much money should I have in my savings account?”  The truth is there is no universal answer. Instead of one perfect number for the whole world, there’s a formula that can help you arrive at the number that’s perfect for you.

How Much Money Should You Have in Savings? 

Finding out how much money you should have in your savings account does require a few things. You’ll need to know

  • How much money you make in a year
  • How much you bring home each month
  • How much you spend each month

If you budget, this information should be laid out there. If you don’t budget, you can take a look at your pay stubs for your income, and look at your credit and debit card history to give you at least a rough idea of what your monthly spending is.

Armed with these numbers you’re almost ready to jump in! The next step is to think about the last bill that caught you unprepared. Was it your bi-annual car insurance bill? Your dog got into some chocolate and you had to have their stomach pumped? Your apartment flooded and you had to pay for repairs?

Whatever it may be, write down the cost of the emergency and put it with the rest of your numbers. It’s important to know this number because it speaks to the type of emergencies that you’re trying to protect against with your savings account. For reference, the average emergency room visit for uninsured people costs $1,233, though costs may vary significantly depending on what you go in for.

If your biggest unpredictable expense is your pet, that’s going to yield a very different number than when your biggest expense is your house. With pets, you might need to sock away an extra $500 for when they decide that glass is a toy and require emergency stitches. With a house, you might need to sock away $5,000 for if the pipes burst or the air conditioning breaks.

A Simple Savings Formula

You can be your own lottery ticket. Here’s the secret formula for figuring out exactly how much you should tuck away.

Monthly living expenses x 3 + last emergency you had = savings account goal


Savings Formula


So simple! I bet you’re thinking, ‘can that really be all there is to it?’

Yes, my friends, that’s all there is to it. It’s a nasty myth that finances have to be super complicated. When you break down bigger goals into bite-sized chunks, you remove the mystery surrounding them. Say that you spend $2,000 on living expenses. Rent, insurance, transportation costs, food, utilities, entertainment, etc. The essentials to live and a few small luxuries cost you $2,000. Now, let’s say that your last emergency cost you $1,500. You fell on the ice, busted your elbow wide open, and had to get stitches. A physically and financially painful experience all around.

Using this handy-dandy formula, let’s plug in our numbers.


$2,000 x 3 + $1,500 = $7,500


Your savings account should have $7,500 in it. This number means if you got laid off today, you’ve had more than three months living expenses covered easily. It also means that the next time Mother Nature decides to get playful with you, you’ll be totally covered. No need to put any emergency on your credit card, or to call home and beg for cash.

If you divide $7,500 by 12, you’d need to save $625 a month to hit that number in one year. You can set your own savings pace and tuck away however much you want per month. While that may seem like a stretch, it’s all about finding a place to start. A good way to start building a healthy savings habit is to take an “out-of-sight, out-of-mind” approach. For example, Chime has a brand new feature that automates 10% of your paycheck into savings. You can’t spend money you never see, which makes automated savings one of the best ways to build savings.

I do recommend building your savings as fast as possible. Emergencies can pop up at any time and it’s always better to be prepared than to simply hope for the best. If you’re starting a rock bottom, you can also use any cash influxes you receive to grow your savings quickly. Things like bonuses, tax refunds, or birthday gifts can be used to beef up savings in a hurry.

Choose a Goal That Works for You 

The most common savings advice out there says to save 3-6 months of living expenses in an emergency fund. My formula falls on the shorter end of that, so feel free to multiply your living expenses by six, or by any other number that makes you feel secure. Three months is a good minimum to have tucked away, but you might feel more comfortable knowing you have eight months of living expenses in the bank.  

Having a fully stocked savings account is one of the best ways to buy peace of mind, and to ensure that you are ready for whatever life has to throw at you. You won’t have to go into debt to protect yourself from a random emergency, and you can rest easy knowing that you have money you can easily access.

How to Start Saving Fast 

Today, we have more tools than ever at our disposal to help build our savings quickly and easily. Apps like Chime help you use that power of financial automation to help you get out of your own way and start saving.  Here’s how: 

Save When You Spend: Automatically save money with every purchase.

Chime offers an Automatic Savings program that helps its members save money on every card transaction. Every time you pay a bill or make a purchase with your Chime card, we round up the transaction amount to the nearest dollar and transfer the round-up from your Checking account into your Chime Savings account. Use your Chime card twice a day on average and you’ll save about $400 per year without even thinking about it!

Save When You Get Paid: Automatically transfer a percentage of your paycheck to savings.

Chime makes it easy to automatically start saving money with every paycheck so you can achieve your financial goals faster.  With the flip of a switch, Chime members can automatically direct a percentage of every paycheck into their savings account. This simple action helps Chime members generate positive inertia that leads to better long-term savings habits.

Do you have a savings account already? How do you build your savings each month?

This guide is for informational purposes only. Chime does not provide financial, legal, or tax advice. You should check with your legal, financial, or tax advisor for advice specific to your situation. Your state or local unemployment agency is responsible for making all determinations on your eligibility for unemployment benefits. Please contact your state or local unemployment agency if you have questions.

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