It’s simpler than you might think to transform your finances.

With prices soaring and many Americans’ wages struggling to keep up, it’s not an easy time to save. Everyone’s situation will be different, so it’s normal if your savings differ from those of others.

That said, it can sometimes be interesting to see how your account balance stacks up to the national average. Regardless of where you stand among your peers, there’s one simple way to supercharge your net worth by hundreds of thousands of dollars with minimal effort on your part.

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The average and median savings account balance

According to the most recent data from the Federal Reserve published in 2022, the median account balance across all types of transactional accounts – such as checking, savings, and money market accounts – is $8,000.

The average balance is much higher at more than $62,000, but keep in mind that averages tend to be skewed by those with extremely large account balances. The median is generally more representative of the typical person, as it’s the middle value in the data set.

Again, comparing your savings account balance to the median or average is helpful to a degree, but your ideal savings will depend on factors like your salary, the cost of living in your area, and your personal expenses. As a general rule, most people should aim to have around three to six months’ worth of savings set aside as an emergency fund.

The simplest way to generate wealth

No matter what you have in savings right now, if you’re looking to increase your net worth over time, investing in index funds or exchange-traded funds (ETFs) is one of the simplest and most effective ways to do it.

Index funds and ETFs are passively managed investments that track particular stock market indexes. An S&P 500 ETF, for example, contains stocks from all of the companies within the S&P 500 (^GSPC +0.13%) and aims to closely track the index’s performance.

For higher returns, you could opt for a growth ETF that only contains stocks with the potential for above-average earnings. These funds may carry more risk, but they can also be far more lucrative than a broad-market fund.

Perhaps the biggest advantage of these types of investments is that they require next to no effort on your part. The stocks in the fund are all chosen for you, so there’s minimal research compared to buying individual companies. Index funds and ETFs also perform best over many years, so you also don’t need to time the market. Simply invest whatever you can afford, then give your money time to grow.

From $0 to $500,000 while barely lifting a finger

With enough time and consistency, it’s possible to generate life-changing returns with index funds and ETFs. Historically, the market itself has earned an average rate of return of 10% per year. This means that over decades, the market’s annual highs and lows have averaged out to roughly 10% per year.

Say that you invest in an S&P 500 ETF earning a 10% average annual return. If you have, say, $100 per month to invest, here’s approximately what you could accumulate over time:

Data source: Author’s calculations via investor.gov.

If you have more to contribute each month or are investing in a fund earning higher-than-average returns, you could potentially earn exponentially more.

For example, say that you’re investing in a growth ETF earning 13% average annual returns – which is only slightly higher than the market’s long-term average. At that rate, investing $100 per month could generate more than $1.2 million after 40 years.

Investing in the stock market is a long-term strategy, as it often takes decades to see substantial growth. But if you’re serious about increasing your net worth, it’s one of the simplest and most effective ways to transform your finances.