62% of Americans Have Less Than $1,000 in Savings. Here's What to Do If You're One of Them

Saving money is no easy feat. Though many of us want to save, it's often the case that life's many expenses simply get in the way. Still, there's a difference between saving less than we'd like and saving nothing at all.

According to a recent study by GoBankingRates, a whopping 62% of Americans have less than $1,000 in savings. But wait -- it gets worse. Of those surveyed, 21% admitted to not having a savings account at all. Meanwhile, 28% claimed to have savings accounts, albeit empty ones with a balance of $0. In fact, only 14% of respondents could boast of a savings balance of $10,000 or more.

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Now if you're thinking it's just millennials who are falling behind on savings, think again. Of those surveyed, roughly 30% of participants aged 35 to 64 confessed to having zero savings. Zero. Considering, for example, that the average monthly mortgage payment in the U.S is just over $1,000, what this means is that the typical homeowner with less than $1,000 in savings would not be able to cover even a single month's payment in the event of a job loss. Clearly, those of us who fall into that $1,000 or less category need to do better.

Build your emergency fundWhether you're old, young, rent, or own a home, your savings account should contain enough money to cover at least three months' worth of living expenses. That could mean saving $5,000, $10,000, $15,000, or more, depending on your typical monthly bills.

To figure out how much you need to save, start by breaking your expenses down into two categories: negotiable, and non-negotiable. Your non-negotiable expenses include your rent or mortgage payment, basic food costs, electricity, health insurance premium, and prescription drugs. Your negotiable expenses, meanwhile, could run the gamut from that gym membership you like having but hardly use to your cable bill, which, though not an extreme indulgence, isn't technically a necessity. Once you've divvied up your expenses, add up the non-negotiables and multiply that figure by at least three. That's the number you need to target when building your emergency savings.

Small changes go a long wayCalculating how much money you ought to save is one thing; actually saving that money is another. But rather than focus on how far behind you are in your savings, try making small adjustments to slowly but steadily build up that balance.

For starters, take a look at that list of negotiable expenses and trim the fat. Cut back your data plan, cancel Netflix, and stop spending money at restaurants, where you'll most likely pay a good 300% markup on whatever you eat. Say you typically dine out once a week at $30 a pop. Have a low-cost home-cooked dinner instead, and you'll shave off $25 per meal. That translates into $100 per month, or $1,200 per year that you could save. Don't really watch those premium cable channels? That's another $10 to $15 a month, or $120 to $180 a year you can start saving and stop throwing away. Making just a few small changes can help you turn a sad savings account balance into a far more respectable number.

Sometimes you need to go bigBut while small changes are definitely a good start, sometimes saving money does mean making bigger lifestyle adjustments. If your mortgage payment, for example, eats up 60% of your paycheck, it's time to downsize or find a new place to live. Can't afford your car payment? If you live in a city with public transportation, you may have to get used to taking the bus till your financial picture improves.

If you replace a $1,500-a-month mortgage payment with a $1,200 payment, that's $3,600 a year you'll save right off the bat. Swap a $300-a-month car payment plus a $1,000-a-year auto insurance premium for $200 in monthly public transit expenses, and you'll save over $2,000 a year, not including the amount you'll save on maintenance and fuel costs. You might even consider relocating somewhere with a lower cost of living altogether, especially if you're able to command a similar salary in your new locale. Major changes are never easy, but if you're serious about getting on track financially, a year or two of sacrifice may be worth the long-term benefits of having a more sizable savings cushion.

Finally, if you really don't trust yourself to save as you should, set up an automatic savings plan so that money from each paycheck automatically filters into your savings account. Granted, you'll still have the option to tap into it, but seeing that balance go down just might motivate you enough to avoid dipping in unnecessarily. Remember, long-term financial security starts with a healthy savings account balance, so do what it takes to get over that initial hump. You'll be happier for it in the long run.

The article 62% of Americans Have Less Than $1,000 in Savings. Here's What to Do If You're One of Them originally appeared on Fool.com.

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