When the economy feels this unpredictable, you want to hope for the best but brace for the worst. And that means being financially prepared for whatever happens.
One of the best ways to prepare is to have an emergency savings — a buffer that can tide you over in case you lose your job or something else goes awry. The general rule of thumb is to have enough set aside to cover at least three to six months’ worth of living expenses.
But how many Americans actually have that much? Fewer than half, according to a Bankrate survey taken in May. In fact, 24% have no emergency savings at all, and another 30% have less than three months’ worth, the survey showed.
An earlier survey from the Transamerica Center for Retirement Studies suggests a similar level of vulnerability. The median (aka typical) emergency savings among U.S. workers is just $5,000, the survey showed — an “alarmingly low” amount in the view of the Transamerica researchers.
Of course, $5,000 may be enough for folks with a relatively low cost of living. But the average American spends more than that in just one month ($5,030 as of the second quarter of 2025 , according to the Bureau of Economic Analysis,) suggesting many people are falling well short of the recommended amount of emergency savings. Just 26% of the surveyed workers have $15,000 or more stashed away, while 17% have nothing at all saved.
Although your capacity to weather a financial setback is a higher priority when fears of an economic downturn are rising, having a cash reserve can protect you from the financial strain of any unexpected event — an emergency room visit, surprise car repairs, or a broken furnace. Without it, you might have to rely on less desirable alternatives such as a high-interest loan or drawing on your retirement funds.
Emergency savings are also critical for peace of mind.
“Research shows that having cash to cover the unexpected has the biggest impact on financial stress, anxiety, and satisfaction,” said Brian Walsh, a Certified Financial Planner® and SoFi’s Head of Advice & Planning.
So what? Building a healthy and readily-accessible emergency fund is one of the most effective steps you can take toward financial security. Beyond being good practice, it can become a lifeline. To guide you on the ideal amount, use a calculator like SoFi’s. And don’t worry if you haven’t started yet – it’s never too late.
Related Reading
Experts Now Recommend a 12-Month Emergency Fund (MarketWatch via MSN)
An Essential Guide to Building an Emergency Fund (Consumer Financial Protection Bureau)
Should You Ever Invest Your Emergency Fund? (SoFi)
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