How do you know how much money you should have?
- Many Americans have checking and savings accounts, but the average size of these accounts can vary.
- It’s important to realize that different account types serve different purposes, and this should impact how much you have in each.
How much money do you have in your checking and savings accounts right now? The answer to this question is important. If you have a lot of money in these accounts, you’re probably pretty secure financially. But if your balances are close to $0, you may be living paycheck to paycheck or struggling with debt.
There is a wide variation in the amount of checking and savings accounts, and it may be interesting for you to see how your balance compares to that of your peers. There is data available that can help you do just that, so take a look below to find out how much the typical American has been hiding.
Here is the average account balance
According to the US Federal Reserve, the median combined balance of checking and savings accounts was $5,300 in 2019, while the average account balance was $41,600.
However, there was substantial variation in average checking and savings account balances by age, household income, and level of education.
For example, among Americans under 35, the median account balance was just $3,240 in 2019, while the average account balance was $11,250. For those aged 75 and over, these amounts were much higher, with the median balance at $9,300 and the average balance at $60,410.
Similarly, while those without a high school diploma had a median balance of $1,020 and an average balance of $9,190, those with a college degree had $15,400 and $78,890, respectively. And those earning less than $20,000 had a median balance of $810 and an average balance of $8,400, compared to $70,000 and $190,660 for households with incomes between $90,000 and $100,000. .
It is not surprising that older people have more in their accounts because they have had more time to amass wealth. And it’s also not surprising that people with higher incomes and those who are more educated have more funds in their accounts since their earning potential tends to be higher.
How much money should you have in checking accounts and savings accounts?
Taking a look at how much money the typical American has in their account is interesting, but ultimately the most important thing is to figure out how much you should have in your Account. And it depends on your situation.
A checking account isn’t the best place to keep the money you’re saving for the long term, because you don’t usually get much interest, if any. Generally, you should use this account as a deposit of money before it is sent elsewhere, for example to your savings. You’ll want enough in the account to cover your bills and avoid overdraft fees, but not a lot of additional fees.
Your savings account, on the other hand, is the best place for your emergency fund, so you should have an account with enough to cover three to six months of living expenses. You can also put money into savings that you plan to use in the next two to five years, because you wouldn’t want to risk investing those funds and having to withdraw them at the wrong time when the market is falling. But the funds you save for long-term goals, like retirement, should generally be in a brokerage account.
By using your checking and savings accounts wisely, you can get the most out of your money. You need to think carefully about which account is the best place for your funds and how much you need in each account to be on the right track to achieving your financial goals. This will help you build the financial security you deserve.
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