It's easy to paint a pretty bleak picture about the state of Americans' savings. In fact, earlier this year, I reported that 40% of U.S. adults don't have enough savings to cover a mere $400 emergency.

But new data from Magnify Money tells us that Americans may not be doing as poorly as we thought on the savings front. Case in point: The average household's savings account balance is $16,420. However, that number doesn't tell the whole story.

The numbers aren't all pretty

Given the number of U.S. adults who couldn't come up with $400 at a moment's notice, it's encouraging to see that the average savings account balance is upward of $16,000. Furthermore, that figure refers only to savings accounts, which means that those with checking accounts, money market accounts, and CDs could be sitting on far more cash than that. That $16,420, to be clear, also doesn't factor in retirement savings.

Man flipping through a wad of bills.


Still, that number starts to look less rosy when we dig a little deeper. While the average U.S. savings account contains $16,420, the median savings account balance across American households is $4,830. And when you have a median that's considerably lower than the average, it means that most people have less than the average.

Are you covered for emergencies?

The one drawback of keeping money in savings is that, by doing so, you limit its growth to whatever interest rate your bank is paying. And chances are, that rate will be well below the rate of return you'd get on your money if you were to invest it, particularly in the stock market.

Still, there's a reason we're all advised to store some cash in the bank, and it's to protect ourselves from unplanned expenses, whether in the form of home repairs, automobile breakdowns, or medical bills. In fact, every working American, regardless of income level, should have an emergency fund with enough money to pay for a minimum of three months of living expenses, and more ideally, six months' worth. The logic is that that sort of cushion could conceivably get you through not only a string of unexpected bills, but a period of unemployment.

Let's see how the average American is doing on emergency savings. Last year, the average U.S. household spent 60,060, according to the U.S Bureau of Labor Statistics. That's roughly $5,000 a month. A savings account balance of $16,420, therefore, is clearly enough to cover a little more than three months of living expenses -- which means that, technically speaking, the average U.S. adult is in decent shape emergencywise. But again, that's just the average person. When we look at the median savings account balance of $4,830, we can conclude that most Americans don't have enough money in the bank to cover a single month's worth of expenses. And that's a problem.

Ramping up your savings game

If you're worried that you're behind on savings (or know for certain that you are), there are steps you can take to boost your cash reserves. For one thing, you can review your monthly budget -- or create one if you don't yet have one in place -- and identify ways to cut corners. That could mean scaling back on restaurant meals, downsizing to a smaller home, or canceling cable.

Next, look at getting a side hustle if you've already pared down your expenses to the bare minimum and that's not doing the trick in freeing up cash to stick in the bank. Finally, make a point of putting any extra cash you receive into the bank, whether it comes in the form of a performance bonus at work or a birthday gift.

You never know when an unplanned expense might upend your finances, and the best way to protect yourself from such a scenario is to have a healthy cushion in the bank. The fact that the average U.S. household has over $16,000 in savings is no doubt a good thing, but that doesn't mean that Americans, on a whole, don't need to do better.