The Average American Has This Much in Emergency Savings. Do You?

According to the latest data from the Federal Reserve Board, about 63% of U.S. adults say they could cover a $400 emergency expense using cash or its equivalent. That means roughly one-third could not without borrowing money, using a credit card, or selling something.

While that's the headline stat, it's far from telling the entire story.

So What Does the Average Person Actually Have?

When it comes to comparing personal finances, averages are easily skewed by a small number of extremely wealthy people. That's why median numbers tend to better reflect what a typical household looks like.

The Federal Reserve's broader household balance sheet data shows the median transaction account balance – that's checking and savings accounts combined – is much lower than many assume. In recent Survey of Consumer Finances data, the median sits around the mid-$8,000 range.

The Three-Month Test

The Federal Reserve also reports that only about half of adults say they have enough savings to cover three months of living expenses.

Three months isn't a strict rule, but it's generally long enough to cover:

• A job transition
• A medical event
• A major home or car repair
• A combination of smaller hits in a short window

If your monthly expenses are $6,000, three months means $18,000 set aside.

That's not a small amount of money, but it's achievable for a lot of people.

Where You Keep it Matters

The national average savings account rate is around 0.40%. Many large traditional banks pay closer to 0.01%. Meanwhile, some high-yield savings accounts are still offering around 4.00% APY.

On $10,000:

• At 0.40%, you earn about $40 per year.
• At 4.00%, you earn about $400.

That's a $360 difference for doing nothing differently.

If you're going to build a safety cushion, it should at least work while it sits there.

Here's the Real Benchmark

Forget "average" and just ask yourself two questions:

1. Could I cover a $400 surprise without stress?
2. Could I cover three months of expenses if my income paused?

If the answer to either is no, you're not unusual, but you also have a clear next step.

Emergency savings is about peace of mind as much as it's about financial health.

An Old National Savings Account is the best way to kickstart your emergency fund.

This article was written by Jake FitzGerald from The Motley Fool and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.