Economists say this is the minimum amount of money you need in an emergency fund. (via CNBCMakeIt)
to graph the relationship between falling into hardship in the next six months and how much you have saved as a buffer. They looked at financial information on more than 70,000 lower-income households, which the report defines as those earning under 200% of the poverty line. To put that into context, that's up to about $30,000 a year for a family of four, says Gallagher. This group represents "about 30% of the U.S. working-age population," she adds.
"We're not saying that $2,467 is the optimal savings level," Gallagher emphasizes. "Our results don't speak at all to achieving longer term financial goals, like paying for college or affording a house." Especially if you're planning ahead for bigger expenses in the future, you'll want to aim to save much more.
"Our data doesn't speak to middle- or higher-income people, but if this rule works for lower-income people, it should also work for middle- and higher-income people," she adds. "The problem for lower income people is that the majority of their income needs to cover everyday expenses. They don't have much discretionary income to work with and that's why having a savings buffer becomes particularly important.""The basic genesis of this research came from looking around at the types of financial advice that people are given about how much to save," says Gallagher. "Households are given really lofty savings goals.
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