Americans Plan to Add This Much to Their Savings on Average This Year

These days, a lot of people are raising their savings accounts rather than growing them. We can thank inflation for that.

In March, the Consumer Price Index, which measures changes in the cost of consumer goods and services, was up 5% on an annual basis. But several key expense categories reported even higher levels of annual inflation.

Grocery costs, for example, were up 8.4% from the previous year. And electricity costs were up 10.2%.

But despite the fact that U.S. consumers are being forced to spend more money across a range of essential categories, a recent New York Life survey reveals that many Americans are hoping to grow their savings in 2023. And the average amount people expect to save in the course of the year is $9,173.68.

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On the one hand, that's a pretty lofty goal. But hey, it's good to have goals, right?

Now you might think you're all set as far as your savings go. But there's really one big question you need to ask yourself to see whether your savings need a boost -- and how much of a boost to give them.

Can you cover three months of bills with money in your savings account?

Although the U.S. economy seems fairly strong these days, financial experts are still warning of a near-term recession. And that could lead to job loss for a lot of people.

That's something you'll want to prepare for. And a good way to do so is to make sure you have a solid emergency fund -- one that can, at a minimum, cover three full months of living expenses. If you don't have that much cash in your bank account, then you should aim to save more money this year.

That doesn't necessarily mean you have to push yourself to save around $9,200, though. And a savings target that high may not even be feasible based on your income.

Rather, a good bet is to take a look at your essential monthly expenses -- things like your mortgage payments, auto loan bills, food costs, and utilities. See how much you spend monthly on average and multiply that by three. That's your minimum emergency savings goal. If you're not there yet, try to save enough this year to get there.

So as an example, if you spend $2,800 a month on essential expenses, you'll want at least $8,400 in your emergency fund. So if you only have $4,400 right now, it means you should set a goal to save $4,000 this year.

The more savings you have, the better

You may not need $9,173.68 -- or something in that vicinity -- to complete your emergency fund. But the more money you're able to sock away in savings, the more protection you buy yourself. So it certainly wouldn't hurt to think big this year in the context of savings.

That said, the one thing you don't want to do is set an unrealistic savings target. You may not have much wiggle room to save due to inflation. And you don't want to get discouraged to the point where you decide to give up on saving money altogether. You're better off aiming for a number that's attainable for you -- even if it's a lot lower than what the average American is hoping to save in 2023.