New Vanguard research data shows that the best predictors for financial well-being do not cost $1 million. Instead, this is more possible: The socks drag at least $2,000 away in an emergency savings account.
The report on financial well-being that has at least $2,000 saved reports of financial well-being by people with incomes of more than $500,000 or assets of more than $1 million.
These findings are as many Americans feel more financially stressed, another Primerica study found that about half of middle-class families are expected to be worse in 2026, due to concerns about living and economic costs, with a share of almost double that in December. Paulo Costa, a behavioral economist and Vanguard-certified financial planner, notes that taking small steps to establish an emergency savings account can help alleviate financial anxiety.
"The strength of this study is that it's not about collecting a lot of money," Costa Rica told CBS MoneyWatch. "The initial $2,000 makes a big difference."
Costa added that while having $1 million in assets should increase financial well-being for more than $2,000 in savings accounts, the results show the importance of preparing for unplanned expenses. The median cost of an emergency is about $2,000, he said, meaning having cash on hand gives people confidence that they can handle sudden monetary stressors.
"When is $2,000 more than a million dollars? That's the emergency savings," Costa said. "The purpose of emergency savings is to get that money at any time if you need it. Many people have money, for example, in a retirement account, there may be some asking when you can withdraw the money, and there may be some tax consequences and some fines."
Retirement assets are usually not easy to obtain unexpected expenses, and young 59 1/2 people are fined 10% for taking out money. However, $2,000 is set aside in your bank account, which means you can rest assured that you can handle unexpected car repairs or medical expenses.
Research found that people with $2,000 in emergency savings usually spend about 2 hours a week thinking about their financial situation without any savings.
To be sure, getting $2,000 in savings could prove that many Americans, especially those with low incomes, struggle with debt or live in a region High cost of living. Vanguard's survey only includes people who have investment accounts at the company, who have access to 401(k) and other types of investment accounts. Many Americans lack.
According to the Fed's research, one in 10 Americans say they don't have cash to pay $400 in emergency fees.
Still, more and more Americans seem to be spending money on rainy days, and Primerica's study found that 64% of those surveyed in March said their contingency fund was at least $1,000, compared with 58% two years ago, up from 58%.
Even if saving $2,000 seems out of reach, Costa Rica says you can start small by saving just $10. The best idea, he said, is to find a strategy that works for you, whether it’s budgeting or automatic savings, by directing a certain amount to a dedicated account, and said.
“I like the idea of ‘invisible,’ so when you get paid, you send the money to your savings account right away,” he said. “By saving $50 a week, you’ll build up to $2,000 in less than a year.”
He added: "Save something better than not. So, starting out, it really makes a big difference."