One of the fundamental teachings of personal finance is to have an emergency fund stashed with three to six months’ worth of living expenses. This fund is there to get you through unexpected monetary challenges, such as a job loss or an emergency medical expense, and can protect you from having to take on debt.
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Yet, not all Americans have one — and even those who do might not have enough in it. According to a recent Bread Financial report, the likelihood of having a sufficient emergency fund varies by generation.
Here’s a look at how much Americans in each generation have in their emergency funds.
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Emergency Fund Balances by Generation
Baby boomers are the most likely to have sufficient emergency savings, the Bread Financial report found. One-fifth of all boomers (20%) have three to six months of expenses in an emergency fund and 33% have more than six months. They’re also the least likely of the generations to have no emergency fund (30%) or less than three months of expenses in their fund (16%).
Among Gen X, 39% have no emergency fund, 26% have three to six months’ worth of expenses, 19% have less than three months and 16% have more than six months. They’re the generation most likely to have no emergency fund at all.
Millennials are the next most-likely to lack an emergency fund — 37% admit they have nothing saved for an emergency. On the plus side, a little short of half of all millennials do have sufficient emergency savings — 27% have three to six months saved and 13% have more than six months. An additional 22% have an emergency fund, but it has less than three months’ worth of expenses in it.
Although Gen Z has had the least time to build their emergency funds, they’re faring relatively well. Nearly one-third (29%) have three to six months saved and 14% have more than six months. Twenty-two percent have less than three months saved, and 36% don’t have an emergency fund.
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Why Boomers Are Leading the Pack
As the report shows, the baby boomer generation — now ages 61 to 79 — are the most likely to have a fully funded emergency fund. There are several reasons for this.
“Boomers tend to be more mature and stable,” said Trae Bodge, personal finance expert and founder of True Trae. “They’ve made their mistakes, but now they are close to retirement and less likely to play fast and loose with their money. Younger people can take more risks.”
Younger generations have also had to deal with more financial hardships during their early earning years.
“Younger generations have endured a series of economic struggles, all while living and housing costs have soared, making it harder to save,” said Andrea Woroch, a money-saving expert. “Boomers have had more time to save before a series of economic struggles ensued.
“Not to mention, boomers are also at an age where they may have paid off their mortgage and/or no longer have children living at home, reducing the total amount of monthly spending, which allows them to save more.”
Experts: Every Generation Should Aim To Have 6 Months of Expenses in an Emergency Fund
While three to six months of expenses is the typical guideline for emergency funds, some experts believe six months should be the goal for members of all generations.
“At least six months of expenses is a good target,” Bodge said. “The hope is that in six months, you’ll be able to right the ship after a job loss, illness or unexpected expense.”
Woroch also believes that six months should be the goal. To come up with your ideal number, start making a list of all of your necessary living expenses.
“You also want to think about some of those wants that you may not want to live without when dealing with a financial emergency,” she said. “This could be a gym membership to ensure you can stay healthy and boost your mood during a tough time, or even hair care services to keep up with your appearance for future job interviews. Build in these expenses into your monthly savings goal.”
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This article originally appeared on GOBankingRates.com: How Much Cash Does Each Generation Have in Their Emergency Funds?
