What’s the Average American Savings Rate?

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If your savings account has a zero balance, you’re not alone.

Twenty percent of Americans aren’t saving at all, a Bankrate study found, while more than a fourth of Americans have less than $1,000 in their savings account. Find out how you stack up to the average American savings rate, why we aren’t saving money, and what you can do to pad your savings account.

What’s the Average Savings Rate?

So how much should you be putting away in your savings account, based on your income? Experts suggest a savings rate of about 10 percent of your disposable income. This can fluctuate, however, depending on other factors such as your job stability, your fixed expenses, your lifestyle, and your debt-to-income ratio.

Unfortunately, most Americans are falling far short of that 10 percent watermark, saving just 5 percent of their disposable income.

Yet among those that are saving, the average household in the U.S. has $175,510 in savings, while the median household had about $11,700 tucked away for a rainy day, according to data from MagnifyMoney.

If the average number seems high to you, consider the fact that top earners put away much more cash in savings than lower earners, which skews the average number upward. Alternately, the median number is a much more accurate representation of the average American savings rate, since it lies at the true midpoint of the varying amounts Americans have in savings.

While the numbers above show that some Americans are saving, not everyone is. Twenty-nine percent of households in the U.S. have less than $1,000 in savings, while 22 percent had less than three months of living expenses put away. Keep in mind that your emergency fund should cover at least six months of living expenses.

Why Aren’t Americans Saving?

So why aren’t most Americans saving money, despite an economy on the upswing? Some financial experts chalk it up to a lack of prioritization. After all, if you don’t stick to a budget and earmark funds to funnel into savings each month, it’s unlikely that you’ll end up saving anything.

Low income is another major factor in the lack of saving habits for many Americans. In fact, nearly 35 percent say its the single reason why they don’t put away more money. Others who aren’t saving say they aren’t sure how to get started, or what type of account or financial product to use to effectively save. The increasing cost of healthcare and the high cost of college tuition are other potential culprits of our saving shortfall.

How to Boost Your Bank Account

So what can you do to get started saving? First, set up a monthly budget with a line item for savings. As the old adage goes, pay yourself first. While you may not be able to swing the suggested 10 percent of your disposable income at first, put away what you can, and use that number as a financial goal to work toward.

Educate yourself on the best tools and accounts used for savings. While a savings account is great, there are many other savings vehicles you can utilize to make the most of your money.

Talk to your financial advisor to choose the best option for you, whether it’s a traditional savings account, an HSA, a CD, a money market account, or a mutual fund. And if you decide to stick with putting your funds in a savings account, choose a savings account with a higher interest rate.

If saving money simply isn’t possible based on your current salary and living expenses, then it’s time to reaccess your financial situation. Consider going back to school to finding a higher-paying job, getting a side gig, or adopting a bare-bones budget.

You should also consider cooking meals at home to save money, cutting back on your holiday gift list this year, or shopping at bulk stores to save even more cash. You could also cut back on monthly bills by getting rid of cable, looking for a more cost-effective cell phone plan, or installing solar panels.

Sure, padding your savings account isn’t the most exciting or glamorous way to spend your money. But it’s one of the best financial decisions you can make.