Most Americans Have 3 Months of Emergency Savings or Less. How Much Do You Need to Survive a Layoff? (2024)

The U.S. economy is strong at the moment and unemployment is generally low. In spite of that, almost 1 in 3 Americans are experiencing layoff anxiety this year, reports Clarify Capital. But part of that anxiety could boil down to inadequate savings.

Clarify Capital also found that 54% of Americans have three months' worth of emergency savings or less, while 18% have no emergency fund at all. But here's the amount of money you should aim to save so you can get through a layoff.

When you have an "ordinary" job

The amount of money you should aim for in a savings account should really hinge on the type of job you have. As a general rule, if you have an "ordinary" or "typical" job, you should aim to sock away enough money to cover three full months of essential living expenses at a minimum.

Some of the expenses you'll want your emergency fund to cover may include:

• Rent or mortgage payments
• Car payments and insurance
• Utility bills, including your cellphone and home internet service
• Healthcare and medication
• Food
• Personal care items

The logic goes as follows. You might have the sort of job where most companies need one of you. But it can still take time to send out resumes, schedule interviews, attend those interviews, wait for a hiring decision, and negotiate an offer. So by having three months' worth of expenses in the bank, you buy yourself a period of time to go through that process without automatically having to take on debt -- namely, by charging your expenses on a credit card and paying it off over time.

When you have more of a niche job

If you're a higher-level employee or have a job that's pretty unique -- meaning, there's not one of you at the typical large-sized company -- then it's generally a good idea to save enough money to cover six months of essential living expenses or more. The reason? If your job is less common, whether because it's an upper-level position or because it's a niche role, then it may take well more than three months to get hired after a layoff. So in that case, you need the extra time to look for work and the financial protection to be able to do so.

Let's say you only have three months' worth of expenses socked away in the bank, and after about 12 weeks of job-hunting, you're unable to find a comparable role to the one you were let go from. At that point, you may have to either accept a lower-paying or lower-level role, or otherwise take on debt so you can continue your job search. Neither situation is ideal.

Make sure you're well protected

Even in a strong economy, it's possible to lose your job through no fault of your own. If you're worried about getting laid off this year, do your best to build your savings up to a level that offers the protection you need. It's a good way to make an otherwise stressful situation just a bit less harrowing.