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Report: Most households don't have nearly enough saved in an emergency fund

Investopedia finds most families need $33,000 saved for emergencies.

A report from Investopedia says an emergency fund should be about $33,000 based on six months of living expenses. Americans on average have $8,000 on hand for an emergency expense. (Scripps News)

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By: Emily Hanford-Ostmann , Lauren Magarino

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If you lost your job, or had to stop working, do you have enough money saved up for the basics like rent and groceries?

Americans, who have dealt with inflated prices for years, haven't put enough toward their emergency funds.

Like many other Americans, Florida resident Amyrah High has been struggling to keep up with everyday expenses, let alone emergencies.

"Feeling like what's happening in the world, kind of affects my ability to stay above water no matter how financially responsible that I am," she said.

In the event of job loss or a surprise bill, Caleb Silver, the editor-in-chief of Investopedia, said families should have an emergency fund worth at least six months of expenses.

"If all of a sudden your income stopped and you had to support your household, that's an emergency fund," he said, "versus just having money in savings for an expense down the road."

For households with three to four people, Investopedia recommends having at least $33,000 set aside for emergencies. It found most families can only cover about $8,000, the median balance of checking and savings accounts.

Silver said the figure may vary based on the size and needs of your household. "It may be way too high for some folks, may be way too low for others," he said.

The $33,000 savings recommendation can be broken into six months' worth of housing and utility costs ($9,137), car or transportation costs ($10,250), food ($2,968), and the most expensive, medical care ($10,754).

"Think about losing your job and having to buy COBRA insurance and then having to buy that for the rest of your family," Silver pointed out. "That could total as high as $12,000."

Silver said the trick to building an emergency fund is cutting back on spending now, and putting enough away "so that you're building a cushion in case you need it in case of an emergency," he said.

Silver suggests high-yield savings accounts or CDs that you can access quickly without any withdrawal fees.

"The point is to make sure that you're accumulating enough savings and putting enough away for that rainy day, because you never know when it's going to come," he said.