### Author Topic: How to calculate savings rate for the not mathematically inclined  (Read 8198 times)

• Stubble
• Posts: 150
##### How to calculate savings rate for the not mathematically inclined
« on: February 15, 2013, 01:48:24 PM »
Hi everyone:

Just wondering if someone has some thoughts about the best way to calculate our savings rate. Part of our savings is pretax (401ks) and part of it is a dollar amount from take home. How would you calculate that?  Also, do any of you count employer matches or stock options into savings rates or do you just consider that extra? Thanks.

#### arebelspy

• Senior Mustachian
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##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #1 on: February 15, 2013, 01:54:41 PM »
« Last Edit: February 15, 2013, 01:56:38 PM by arebelspy »
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
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• Stubble
• Posts: 150
##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #2 on: February 15, 2013, 02:15:08 PM »
ha, ha!  Clearly I have some afternoon reading to do!

#### marty998

• Walrus Stache
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##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #3 on: February 15, 2013, 03:47:17 PM »
Probably the wrong question to ask on this forum but does it really matter what your savings rate is?

I reckon a better measure is the concept of "jaws" (think of a big saltwater crocodile). Getting income up and expenses down and progressively growing that gap.

#### arebelspy

• Senior Mustachian
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##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #4 on: February 15, 2013, 04:10:39 PM »
Probably the wrong question to ask on this forum but does it really matter what your savings rate is?

I reckon a better measure is the concept of "jaws" (think of a big saltwater crocodile). Getting income up and expenses down and progressively growing that gap.

Just for projections, and measuring progress, and setting goals.

In other words, no, not really.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### dragoncar

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• Registered member
##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #5 on: February 15, 2013, 04:14:21 PM »

Just for projections, and measuring progress, and setting goals.

In other words, no, not really.

And most importantly bragging

• Stubble
• Posts: 150
##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #6 on: February 15, 2013, 05:27:45 PM »
Probably doesn't matter at all.  I have a goal to improve it by a certain percentage per year, so I want to keep better track than I have in the past.

#### arebelspy

• Senior Mustachian
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##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #7 on: February 15, 2013, 06:09:30 PM »

Just for projections, and measuring progress, and setting goals.

In other words, no, not really.

And most importantly bragging

D'oh!

That's twice in one day.

I'm almost to the point of saddle shopping*, or at least shutting my mouth.  :X

*If one man calls you a horse, ignore him. If two men call you a horse, consider it. If three men call you a horse, buy a saddle. -Old Proverb
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### dragoncar

• Walrus Stache
• Posts: 9537
• Registered member
##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #8 on: February 15, 2013, 07:00:54 PM »
D'oh!

That's twice in one day.

I'm almost to the point of saddle shopping*, or at least shutting my mouth.  :X

*If one man calls you a horse, ignore him. If two men call you a horse, consider it. If three men call you a horse, buy a saddle. -Old Proverb

Lol!  I didn't mean to refer to you specifically.

#### velocistar237

• Handlebar Stache
• Posts: 1422
• Location: Metro Boston
##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #9 on: February 16, 2013, 11:54:41 AM »
Probably the wrong question to ask on this forum but does it really matter what your savings rate is?

"It turns out that when it boils right down to it, your time to reach retirement depends on only one factor: your savings rate, as a percentage of your take-home pay."
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

#### marty998

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##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #10 on: February 16, 2013, 02:50:19 PM »
Ha yes i've read the shockingly simple math. But my problem with it is that it is shockingly simple.

What happens if the sharemarket loses 40% in a year? You could have an 80% savings rate and still find yourself going backwards.

You could also end up the other way cutting 3 or 4 more years off your projected retirement date but that is beside the point.

%'s have always been a bugbear for me because it all depends on starting points lowbase/highbase etc etc.

Actual \$ values have always mattered more to me, but each to their own

#### arebelspy

• Senior Mustachian
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##### Re: How to calculate savings rate for the not mathematically inclined
« Reply #11 on: February 16, 2013, 03:54:28 PM »
You can't control that.  You can control savings rate.

All that matters is the amount you save. By increasing savings rate it incorporates both earning more and spending less, very powerful tools.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

#### Cinder

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