Your Savings Rate
Your savings rate is the percentage of income you keep each month. It is the one figure in a plan that responds to both sides of the ledger, income and spending, rather than to market performance.
It measures how much of take-home pay is not spent:
(Income − Expenses) ÷ Income × 100
A 25% savings rate means that for every $1 earned, $0.25 remains. That $0.25 is what funds everything the plan does later: reserves, investments, debt payoff, goals.
Worked through
Take-home pay: $6,000/mo. Expenses: $4,500/mo.
($6,000 − $4,500) ÷ $6,000 = 25%
This content is educational and informational only. It is not financial, investment, or tax advice. Consult a qualified professional before making financial decisions.