How Much Should I Have in Savings?

July 17, 2019 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

How Much Should I Have in Savings?

Mo’ money, mo’ problems? Yeah, right, Biggie. Contrary to the popular hip hop song, having more money in the bank actually helps solve problems, not create them. In fact, 87% of Americans surveyed in 2018 agreed that nothing makes them happier or more confident than having their finances in order. And part of keeping things in order is having a savings account built for emergencies.

Why Should I Have Savings?

You want to be financially savvy, right? What’s startling is that only 39% of Americans have enough money to cover a $1,000 emergency with savings.

A savings account helps you avoid going into more debt and prepare for unexpected emergencies. Imagine if your car had a major breakdown, or your cell phone was trampled on during a weekend outing. How would you afford the unpredictable repairs?

An emergency fund stocked with extra cash can help you avoid taking out personal loans or using a credit card to cover an unexpected expense. And while emergencies are never fun, it might help you feel a little bit better knowing that you’re prepared.

How Much Money Should I Have in Savings?

If you don’t have much in savings, where exactly do you start? A general rule of thumb is to have three to six months of living expenses saved up. But keep in mind that your living expenses may increase as you age, as you start growing your family, have mortgage payments, or are saving for retirement.

At Least $500 in Savings While in College

Being a college student is expensive. It’s hard to keep up with tuition and rent. However, as a college student, you can try starting with $500 in emergency savings and working your way up.

The Federal Reserve reports that 39% of all Americans don’t have enough cash on hand to cover a $400 emergency, so a $500 emergency fund is a great place to start. Your monthly living expenses are likely cheaper in college than they will be at any other time in your life, so even just saving $10 per week can help you reach your goal in about a year.

Savings for Post-Grads/20s

After graduation, you’re figuring out the real world for the first time. Most post-graduates are determining how to pay back student loans, and maintain new living expenses. According to a 2018 Bankrate survey, 27% of millennials have fewer than three months savings in the bank. It may help to break down your larger goal of three to six months into first saving $1,000 in your emergency fund. This can help you feasibly achieve your savings goal while supplementing most emergencies in cash.

Savings in Your 30s

By the time you reach your thirties, ideally you’d have at least six months of expenses saved. At this point, you may even be questioning if you should invest more or continue to save. An easy way to determine how much you need to save is to build out a budget of your bare-bones living expenses.

How much do you need to survive in the case of job loss or a medical emergency? A savings account of at least six months of your usual expenses can help you feel safe enough to cover rent, utilities, and food while you get back on your feet.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning 1% APY on your cash!


Savings in Your 40s and 50s

How would you survive if faced with a job loss? According to the Center on Budget and Policy Priorities , unemployment benefits vary state-to-state, but many states give up to 26 weeks in benefits.

When you’re in your 40s and 50s, replacing your income may prove to be more difficult as you search for positions with more work experience. If the government covers roughly six months of unemployment, then you’ll likely want to have at least that much and then some in your own savings.

Where Should I Put My Savings?

If you’re building up an emergency fund, then placing your savings in an account that can be easily accessed, like a savings account, is probably ideal.

Putting your savings into a 401(k) or mutual fund might not be the best place for this purpose because these accounts are not very liquid. In other words, you can’t easily access the money when you need it. Plus, withdrawing early from accounts specifically set up for retirement may come with penalties and hefty fees if you are under the age of 59.5.

Building Up Savings More Quickly

Convinced you need more savings, and a traditional savings account just won’t cut it? Here are a couple of ways to help build up your savings faster than a savings account alone.

Selling Your Junk

Take inventory of things in your garage or closet that you can sell. There are several buy/sell apps out there that can make it easier to sell your unwanted items.

Any money you make off of your items can be thrown into your savings account. This method is a win-win because you get rid of things you aren’t using, and you can build up your savings without changing your spending habits.

Cutting Out Unnecessary Spending

Want to make significant strides with your savings habit? It might be time to look at your expenses and cut out unnecessary spending.

There are several things you could change, even if it’s just temporary. Replace your $100 per month gym membership by exercising with free, full-length workout videos online. Cut out your cable expense and go all-in with a cheaper Netflix subscription.

How a Budget Can Help You Save

Yes, the dreaded budget. Actually seeing how much you spend each month in a written budget can help you save. When you track your monthly income and expenses, you can quickly identify what areas of life are costing the most so you can make adjustments.

An online budgeting tool like SoFi Relay can help you track your spending, which can help you see where you might be able to trim some fat from your expenses.

If you’re looking for a checking and savings account where you can spend, save, and earn all in one product, consider SoFi Checking and Savings®.

Learn more about SoFi Checking and Savings today.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member
FINRA / SIPC .
SoFi Securities LLC is an affiliate of SoFi Bank, N.A. SoFi Money Debit Card issued by The Bancorp Bank.
SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

SOMN18141

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender