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Maybe you already have an emergency fund, or maybe you’ve been starting to fund one.
But do you have $20,000 sitting in a high-yield savings account, just in case of emergency? It seems like alotof money, but that’s how much a MarketWatch analysis says you need — at minimum — as a buffer against the rising cost of living (1).
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The problem is, those expenses have risen over the past few years, thanks to sticky inflation, policy shifts, tariffs and war (to name a few).
Combine that with stagnating wages, and many Americans have found that their purchasing power has noticeably decreased.
In April, inflation jumped to 3.8% — almost a three-year high — in large part due to rising energy costs (2).
At the same time, the personal savings rate fell to 2.6% in April, according to the Bureau of Economic Analysis.
While disposable personal income dropped 0.5%, spending rose 0.5% (3).
In other words, Americans are spending more and getting less in return.
That means, even if you do have an emergency fund, it might not be enough to keep up with more challenging economic times.
While every household is different, “$20,000 is probably a good place to start for most people,” Igor Aronov, founder of FAR Financial, told MarketWatch (1).
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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