Here's What Happens if Your Savings Account Balance Gets Down to $0

It's a situation you really don't want to land in.

It's hardly a secret that inflation has been surging since the latter part of 2021. That's forced a lot of people to deplete their cash reserves completely in order to keep up with their bills.

If your savings account balance has been whittled down to $0, you should do your very best to bring it back up as soon as you can. That's because having a $0 balance could have several negative consequences.

You may be charged fees

Many banks impose account maintenance fees on customers. These can apply to both checking accounts and savings accounts.

In a lot of cases, those fees will be waived once you meet a minimum balance requirement. But if your savings account gets down to $0, then you may start getting charged fees by your bank.

You'll risk debt in an emergency

In 2020, millions of Americans lost their jobs as the country shut down to deal with the initial phase of the COVID-19 pandemic. Now that was a very extreme situation, and hopefully, one we won't ever have to face again in our lifetime. But the reality is that you never know when an economic recession might lead to a large uptick in job loss. And if you don't have any money in savings in that scenario, you might immediately be forced into debt to cover your expenses in the absence of a paycheck.

Even during periods when the broad economy is nice and stable, you never know when your specific job might end up on the chopping block. And it's important to have money in savings to cope with that scenario.

Furthermore, even if you don't lose your job, you might need savings to bail you out of a jam if you run into a costly car or home repair, or if you need medical treatment that leaves you responsible for a whopping set of copays. With $0 in savings, you're once again looking at debt in a situation like that.

How to build up your savings

Whether you've depleted your savings due to inflation or another reason, it's important to try your best to build back up as quickly as possible. To that end, take a look at your budget and try to cut a few expenses, even if they might seem like minor ones. When you have $0 in savings, canceling a streaming service and putting the $15 you're not spending into the bank is a big deal.

Next, consider getting a side hustle. Today's gig economy is strong and healthy, so there's ample opportunity to pick up additional work. And since the work you're doing on the side of your main job won't be earmarked for existing bills, you should be able to save a nice chunk of it (keeping in mind that as is the case any time you earn money, the IRS gets a cut of it in the form of taxes you pay).

All told, having no money in savings is a really dangerous situation. So if that's the boat you're in, try your hardest to replenish your account. You may not go from $0 to $1,000 overnight, or even in a month. But the key is to start by saving something and work your way upward.