Many Americans find it challenging to build emergency savings. It’s difficult to even start, let alone save the three to six months of household expenses we’re often told to put away.

Investopedia, a financial media site, recently released a report that provides insight into how much emergency savings we truly need.

The good news is that we now have a specific number to aim for. The bad news is that it’s a large number.

According to Investopedia, a typical U.S. household should have at least $33,000 saved for emergencies—$33,110.68, to be exact.

This amount is roughly four times the average amount the typical household has in combined savings and checking accounts, which is only about $8,329, according to federal data.

“That should be a wakeup call for people,” said Caleb Silver, editor in chief of Investopedia, regarding the struggle to save for emergencies. “If you believe your savings will get you through tough times, you need to ensure you have enough saved to do so.”

Investopedia arrived at the $33,000 figure by analyzing the average costs of six months’ worth of expenses for a household with at least two people.

The largest expense category is medical care: the analysis assumes you’ve lost your job, and healthcare becomes costly when you’re unemployed.

Breaking Down the $33,000 in Emergency Savings

Here’s how those expenses break down:

– $10,754.63 for medical care: This is the average cost of six months’ worth of single-coverage COBRA premiums, multiplied by the average household size.

– $10,250 for vehicles: This covers the average cost of owning two cars for six months and operating one.

– $9,137.17 for housing and utilities: This is the average cost of six months’ worth of housing and utilities for both renters and homeowners.

– $2,968.88 for food: This is the average cost for six months’ worth of groceries.

Experts at Investopedia emphasize that these estimates are conservative. For example, the calculations assume your family won’t eat out during an emergency and that you’ll only use one car.

For Some Families, $33,000 May Not Be Enough

For some families, particularly after a job loss, $33,000 might not cover everything.

“You need to understand that finding another job could take six to 12 months,” said Kelli Smith, director of financial planning at Edelman Financial Engines. “And if you’re in a single-income family, it’s important to focus on what your income needs will be during that period of unemployment. It could very well exceed $33,000.”

Millions of Americans struggle to save for emergencies. Federal data suggests that about three-quarters of households with bank accounts have less than $33,000 saved, according to Investopedia.

Financial advisors recommend setting aside enough emergency savings to cover three to six months of household expenses. This amount should, in theory, be enough to cover a significant household repair, medical emergency, or job loss.

“There’s always something unexpected, whether it’s needing a new roof or losing a job, that can put you in debt,” Smith said. “We need to establish good spending and savings habits. Building emergency savings is a great way to start developing those habits.”

Most of Us Know We’re Not Saving Enough

Many of us are aware that we’re not saving enough.

Each year, Bankrate, a personal finance website, asks consumers if they feel comfortable with their emergency savings.

Interestingly, the level of discomfort about savings seems to increase every year. In 2018, only 37% of adults reported feeling uncomfortable with their level of emergency savings. This number rose to 44% in 2020 and 59% in 2024.

“The growing discomfort correlates with rising inflation,” said Greg McBride, chief financial analyst at Bankrate. “There’s a realization that your savings don’t go as far as they used to.”

According to Bankrate’s 2024 Annual Emergency Savings Report, 27% of adults have no emergency savings at all.

Here’s a breakdown of households by the size of their savings accounts:

– No emergency savings: 27%

– Savings to cover less than three months’ expenses: 29%

– Savings to cover 3-5 months’ expenses: 16%

– Savings to cover at least six months’ expenses: 28%

The survey found that Baby Boomers are the most likely to have emergency savings, while Millennials are the least likely.

If you’re among the 27% of Americans with no emergency savings, here are some expert tips on how to get started.

Open a High-Yield Savings Account  

Interest rates are currently high, and high-yield savings accounts are offering some of the best returns in years.

Rates between 4% and 5% have become common for competitive high-yield savings accounts over the past two years, in response to the Federal Reserve’s significant interest rate hikes to combat inflation.

“A high-yield savings account is an excellent place for your emergency savings,” Silver said.

Open a Money Market Account

Another option is a money market account, which is available through banks and credit unions and is federally insured.

Money market accounts typically aren’t as flexible as savings accounts; for instance, you might not be able to move money in and out as easily. However, experts say that a money market account should still be flexible enough for emergency savings.

Set Up Automatic Deposits

A great way to build your emergency savings is by setting up automatic deductions from your paycheck, McBride said. Ideally, you won’t even notice the money is gone.

“Successful saving is about developing a habit,” he said. “The best way to establish that habit is to automate it.”

Save Any Unexpected Windfalls

With small automatic deposits, it could take years to build up $33,000 in savings.

Here’s a quicker approach: The next time you receive a tax refund, holiday bonus, or any other unexpected windfall, deposit the entire amount into your emergency savings.

“When you get a pay raise, a bonus, or income from a side hustle,” McBride said, “consider it an opportunity to save some extra money.”