Savings Rate Calculator


What is my savings rate?

Savings rate is a financial metric representing the ratio of the monthly savings to the total income. This simple indicator gives precise information that much income is dedicated to wealth accumulation.

Savings rate is usually presented as percentage value rather than ratio.  As a relative value it allows us to compare the saving speed of different people. 

Why is your savings rate important?

Saving rate gives information about the state of your finances and is a good predictor of your future financial wellbeing. 

People with a high saving rate tend to accumulate wealth faster, systematically increase income (due to interest earnings) and retire early.

By measuring your savings rate you may answer following questions:

  • Am I saving enough?
  • What does your savings rate look like in comparison to people with similar income? 
  • How long will it take you to reach financial independence?

How to calculate savings rate?

Calculation of savings rate rate is fairly simple. You may use our calculator or substitute the data to the savings rate formula.

  1. Determine the amount of your monthly savings. This should include the amount of money you accumulate on your bank account, the total amount of your monthly investments and money saved on your retirement plan.
  2. Summarize your monthly income. If you have multiple revenue streams, calculate the sum of all of them. For the revenues received quarterly or annually calculate the monthly averages. 
  3. Substitute data to the equation below.

Savings Rate Formula

If you wish to calculate the savings rate use the following equation:

SR = (Total_Savings / Total_Income) * 100%


  • SR - savings rate
  • Total_Savings - sum of all savings for a given period
  • Total_Income - sum of all revenues for a given period

What is a good savings rate?

According to different sources the minimum viable savings rate is 20% per month. This amount of savings allows quickly to accumulate enough savings for an emergency fund and accumulate capital for future investments.

Of course the higher savings rate the faster you accumulate capital. This capital will start to generate interest or dividends which in effect contribute to higher savings potential and accelerate the wealth accumulation. 

What is the average savings rate in the US?

The average savings rate in the US is between 7-9% according to Trading Economics (link).

How to increase savings rate?

If you wish to save more here are some tips that let you increase your savings rate.

Lower your spending

Revise your monthly spendings and try to find the potential optimizations. They may include cutting off not necessary spendings like cigarettes or trimming the biggest expenses like car upkeep . 

Focus on recurring spendings like monthly subscriptions for services you are not using or maybe you could downgrade the plan.

Increase your income

Negotiating your salary may be one of options but not only one. You may look for another job. The best option is freelance since it gives flexibility in working hours and in the amount of time you are willing to dedicate to it. 

If you have bigger capital you may use it to work for you, by buying a rental property of dividend stocks.

Pay yourself first

It is a good practice to put aside the fixed amount of savings at the beginning of the month and start spending the rest afterwards. This way you will need to manage the budget with the rest you have left. 

Of course those general rules may seem obvious, but somehow only a few follow them. Do not put yourself in that basket. Start today - the persistence could do wonders!

Helpful tools

If you are interested in this topic you may find the following tools particularly useful: regular saving calculator, savings goal calculator and compound interest calculator



Created by Lucas Krysiak on 2022-06-11 13:45:13 | Last review by Mike Kozminsky on 2022-09-15 13:37:43

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