How much do you need to have in your savings to feel financially prepared: survey

What would it take to feel financially prepared? New research has found that the average American feels prepared for the worst after saving $5,078.

The survey of 2,000 employed Americans, evenly divided by generation (500 Gen Z, 500 Millennials, 500 Gen X and 500 Baby Boomers) found that Gen Zers need at least $4,286 in their bank account at all times certain to feel prepared.

Meanwhile, baby boomers would like to have almost $6,500 ($6,490.70) and Gen X would feel more secure with nearly $5,000 ($4,910.10).

Conducted by Talker Research on behalf of Chime, the results found that 63% believe they can afford to cover an unexpected expense of $500 – although 30% admit it would put a strain on their finances.

Another 17% couldn’t currently afford that kind of expense, but believed they could eventually find a way to afford it.

To get away with that cost, 32% of respondents would dip into their savings, while 28% would call family and friends.

A quarter (26%) said they would pay for unexpected expenses by temporarily holding other expenses, such as groceries or less important bills.

Nearly three in four (72%) spend most of their paycheck on paying bills and 69% said it’s the first thing they do when they get paid.

Twenty-nine percent of respondents said the first emotion they have when they get their paychecks is “excitement.” However, this is usually followed by feeling stressed (19%), ready (19%) and overwhelmed (19%).

Leading up to payday, 39% admitted they are more likely to avoid social events in order to save funds for when they really need it. This is likely as a result of trying to combat the feeling of “salary paralysis” experienced by 59% – a wave of anxiety or fear due to low funds between pay cycles.

“The survey also found that the average American starts feeling stressed about their money just seven days after getting a paycheck,” said Madhu Muthukumar, Chief Product Officer at Chime. “It’s clear that rising costs are affecting Americans’ well-being, and people need simple, useful and powerful tools to manage their budgets, especially between paychecks.”

The results also revealed that the average American is taking steps to build their own savings — putting aside 16% of their paycheck. Gen Z was found to care more, saving nearly a quarter (23%) of their salary.

Millennials, meanwhile, said they are able to set aside 17% of their salary for their savings. Gen Xers are saving 12% and baby boomers are saving 11%.

Although 40% admit that their mental health is being negatively affected by their current financial situation, 72% agreed that maintaining financial wellness positively affects their mental health in the same way as meditation or mindfulness.

“Set clear financial goals that prioritize your needs and spending. Open communication about your financial boundaries can lead to better understanding and support in your inner circles,” said Dasha Kennedy, Personal Finance Advocate for Chime. “And practice open communication—talking about your financial limits can lead to better understanding and support from your inner circles.

“This means it’s okay to say no to events or purchases that don’t fit your budget. Take the lead in suggesting group activities by using free or low-cost activities to stay connected without going overboard. your budget.”

Survey methodology:

This random, two-choice survey of 2,000 employed Americans evenly divided by generation (500 Gen Z, 500 Millennials, 500 Gen X, and 500 Baby Boomers) was commissioned by Chime between April 25 and 29, 2024. It was led by market research company Talker Research, whose team members are members of the Market Research Society (MRS) and the European Society for Opinion and Marketing Research (ESOMAR).