Why Every American Should Aim for at Least $19,800 in Savings in 2025

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

[[{“value”:”My wife and I keep about $25,000 stashed in a high-yield savings account. That covers roughly three to four months of our family expenses, which average around $7,000 per month.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Turns out, we’re not far off from the average American household. According to the latest data from the Bureau of Labor Statistics, U.S. households spent an average of $6,440 per month in 2023. Add in last year’s 2.9% inflation, and 2025 spending is likely closer to $6,600/month.Multiply that by three months and you land at $19,800 — the new baseline for a healthy emergency fund.Why cash savings is so importantAn emergency fund isn’t just about preparing for the worst. It’s about giving yourself peace of mind and options.Here’s what a solid emergency fund really gives you:Less stress. Knowing you can handle a surprise bill (or three) helps you sleep better at night.Avoid debt. No need to slap emergencies on a high-interest credit card.Career flexibility. Hate your job? You can walk away and take time to find the right fit, not the first offer.Freedom to relocate. If a better opportunity comes up in a new city or state, you’ve got the funds to make the move without hesitation.Family resilience. Whether it’s a health scare, a car issue, or your kid’s dental emergency, you’re ready.Where to keep your savings (and earn more on it)I personally earned $798 in interest last year just by keeping our cash in a high-yield savings account (HYSA). That’s about $66 per month I didn’t have to work for!HYSAs earn the highest interest rate possible, while keeping your funds liquid and available at any time. They’re also FDIC insured, so extremely safe.Today’s top high-yield savings accounts offer rates around 4.00% APY, which is more than 55x the national average for a checking account. If you have cash sitting idle, you really need to move it to an HYSA.Just make sure you choose a bank that doesn’t charge any monthly fees. Check out our top picks for best HYSA’s available today, offering the highest rates,How to build up your emergency savingsFirst, open a new, dedicated account for your savings. Keeping this money in a completely separate bank will stop you from dipping into those dollars for non-emergencies.Next, set-up automatic transfers each month into that account. For example, every Friday you could transfer $50 from your checking over to savings.If you have any windfalls, tax refunds, birthday money, etc. try to save those too and build your fund faster. Saving an extra $300 a month in a 4.00% APY account could grow to $19,854 in just five years.Saving today means freedom tomorrowHaving $19,800 in savings might feel like a stretch. But it’s exactly what the average household needs to cover three months of expenses in 2025.Start where you are. Keep your cash in a high-yield savings account that actually pays you. Build your fund one dollar at a time, and don’t stop until you hit your number.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

My wife and I keep about $25,000 stashed in a high-yield savings account. That covers roughly three to four months of our family expenses, which average around $7,000 per month.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Turns out, we’re not far off from the average American household. According to the latest data from the Bureau of Labor Statistics, U.S. households spent an average of $6,440 per month in 2023. Add in last year’s 2.9% inflation, and 2025 spending is likely closer to $6,600/month.

Multiply that by three months and you land at $19,800 — the new baseline for a healthy emergency fund.

Why cash savings is so important

An emergency fund isn’t just about preparing for the worst. It’s about giving yourself peace of mind and options.

Here’s what a solid emergency fund really gives you:

• Less stress. Knowing you can handle a surprise bill (or three) helps you sleep better at night.
• Avoid debt. No need to slap emergencies on a high-interest credit card.
• Career flexibility. Hate your job? You can walk away and take time to find the right fit, not the first offer.
• Freedom to relocate. If a better opportunity comes up in a new city or state, you’ve got the funds to make the move without hesitation.
• Family resilience. Whether it’s a health scare, a car issue, or your kid’s dental emergency, you’re ready.

Where to keep your savings (and earn more on it)

I personally earned $798 in interest last year just by keeping our cash in a high-yield savings account (HYSA). That’s about $66 per month I didn’t have to work for!

HYSAs earn the highest interest rate possible, while keeping your funds liquid and available at any time. They’re also FDIC insured, so extremely safe.

Today’s top high-yield savings accounts offer rates around 4.00% APY, which is more than 55x the national average for a checking account. If you have cash sitting idle, you really need to move it to an HYSA.

How to build up your emergency savings

First, open a new, dedicated account for your savings. Keeping this money in a completely separate bank will stop you from dipping into those dollars for non-emergencies.

Next, set-up automatic transfers each month into that account. For example, every Friday you could transfer $50 from your checking over to savings.

If you have any windfalls, tax refunds, birthday money, etc. try to save those too and build your fund faster. Saving an extra $300 a month in a 4.00% APY account could grow to $19,854 in just five years.

Saving today means freedom tomorrow

Having $19,800 in savings might feel like a stretch. But it’s exactly what the average household needs to cover three months of expenses in 2025.

Start where you are. Keep your cash in a high-yield savings account that actually pays you. Build your fund one dollar at a time, and don’t stop until you hit your number.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

“}]] Read More