Saving Rate: How To Calculate It And 3 Ways To Increase It

Saving Rate is the percentage of income a person sets aside every year. The money does not need to be held in cash and can be used to buy income producing assets.

How To Calculate Saving Rate? To calculate saving rate we need to determine disposable personal income which is Net Income.

Low Expenses Compared To Income The advantage of high Personal Saving Rate is that your expenses are low relative to income.

Why Is Personal Saving Rate Important?

A high Personal Saving Rate indicates that you are saving a greater percentage of what you earn.

Greater Savings To Invest

Average Saving Rate In USA Just as Saving Rate is important for individuals to track for personal finance; it is also important for governments.

Optimal Saving Rate

To accelerate Financial Freedom Countdown you should ideally shoot for a saving rate of 50%. With a 50% saving rate, you buy one year of freedom for every year you work.

How To Increase Saving Rate There are only 3 levers to increasing saving rate 1. Reduce Taxes 2. Reduce Expenses 3. Increase Income

Reduce Taxes Look at every possible means to reduce taxes. Planning for taxes should be an ongoing activity.

Reduce Expenses There are other recurring expenses which are needed but you are paying too much for them. If you have Cable TV, Wireless Phone, Satellite TV, Internet Access, Satellite Radio or Home Security sign up for BillShark.

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