How do folks calculate savings rate?

[EchoStache]

Just wondering if people use gross income, income after taxes(a mostly unavoidable deduction), income after taxes and health insurance, etc, when figuring their savings rate as a % of gross income.

I see claims from exceptionally frugal folks about saving up to 70% of gross income, but many do not even have 70% of their gross available for anything, let alone savings, once mandatory taxes are taken out.

I'll use this month as an actual example for myself using real numbers:
Total Gross Income: $25,687.10
Taxes: $3519.22
Health Insurance: $863.84
Net(gross??) after taxes and insurance: $21,304.04

I don't have $25,687.1 available to save from.  I only have $21,304 from which to spend and save.  Do folks use this number, or the top line gross when figuring/calculating/sharing savings %.  I understand, everyone can do whatever the hell they want.  Just curious is there was a general consensus.

Savings for November:
401k: $3840
Brokerage: $12,553.79
Principal: $1200.75
Total savings: $17,234.54

Savings rate as % of total top line gross: 67.15%
Savings rate as % of available gross after taxes and insurance: 80.9%

So my point here is that my taxes are *exceptionally* low for my income level and I was below 70% savings rate.  It's hard for me to envision a 70% savings rate of top line gross being feasible in most scenarios, even with exceptionally low living expenses.

I'm happy about the month regardless of what method is used to describe savings rate.  This is not representative of my savings rate for the year; it's an exceptionally good month due in part to just how things landed in terms of timing.  I may have carried over some extra cash from previous month that got funneled to brokerage, for example.

[ixtap]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

[Loren Ver]

We went with what was easiest, what we could control- the amount we put away: 401k, HSA, after tax accounts etc.  That was it.  No employer match, no taxes, no insurance, none of the stuff that other people, companies, entities were determining. 

That way DH and I could sit down and have a little meeting and say how many dollars a month we wanted to put away.  Then we paid ourselves first.  Then we built the rest of the budget.  To get the percent, we then just divided the number we had picked by the amount of income we had coming in (again ignoring things like employer match).

Kept our lives simple for something that doesn't really matter that much except to compare to ourselves year over year.

[Zikoris]

I do savings rate on net. End of year, total amount spent / net income (including employer-matched contributions). That get's you your spending rate, the inverse of which is your savings rate.

[EchoStache]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

I checked the article you mentioned and I see he references take home pay, which makes sense.  I do like being aware of my savings rate so I think I'll use net pay after taxes and insurance when figuring my savings rate.  I'm curious to see where I'm at for the year as I don't think I've ran the numbers using net.

[GilesMM]

Save as much as you can and forget about the rate.

[mistymoney]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

Why is that? Seems that either you don't count it (which I haven't ever done) or you add it to both numerator and denominator as it is compensation and savings once you are vested, shouldn't count it anyway if you aren't vested. Filed under "anything can happen" even if you plan on staying until vesting occurs.

But I just leave it out altogether.  But if you counted for a few years, and then stop counting, makes your metrics look like you are doing less?

[PDXTabs]

I calculate it inline with the BEA because that's how all of the federal statistics are calculated. If you calculate this way you can compare your savings rate to the national average.

How is it calculated?
To calculate the personal saving rate, BEA starts with personal income, and subtracts from that personal taxes to derive “disposable personal income.”

Then, personal outlays are subtracted from disposable personal income—this results in an estimate of “personal saving.”

The saving rate is personal saving divided by disposable personal income.

- https://www.bea.gov/news/blog/2017-08-21/measuring-how-much-people-save-inside-look-personal-saving-rate

[shuffler]

I'd suggest that savings/income is a less interesting and less important number than savings/retirement-spend.  I.e. how many multiples of your retirement-spending are you saving each year?

But to answer the question, when I did occasionally look at savings/income, not only did I compare against pre-tax income, I made sure to add the "extras" onto the income side.  Like:  401k match from employer counts as income.  HSA contribution from employer counts as income.  Etc.

[ixtap]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

Why is that? Seems that either you don't count it (which I haven't ever done) or you add it to both numerator and denominator as it is compensation and savings once you are vested, shouldn't count it anyway if you aren't vested. Filed under "anything can happen" even if you plan on staying until vesting occurs.

But I just leave it out altogether.  But if you counted for a few years, and then stop counting, makes your metrics look like you are doing less?

As I recall, they say it is because SS will replace less of your income above this level. Honestly, with a mediocre match and a high income, the match isn't going to move the savings % needle by much.

[Goldielocks]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

Why is that? Seems that either you don't count it (which I haven't ever done) or you add it to both numerator and denominator as it is compensation and savings once you are vested, shouldn't count it anyway if you aren't vested. Filed under "anything can happen" even if you plan on staying until vesting occurs.

But I just leave it out altogether.  But if you counted for a few years, and then stop counting, makes your metrics look like you are doing less?

I agree with adding it to the numerator (savings) and denominator (net income).  This was because my employer match was significant and I was already tracking it in the investments.

At some point, the value of the employer match is not that significant against your current asset growth, and it may be a hassle to keep including it in your calc, I just treat it like dividend growth (outside the net savings).

[yakamashii]

Savings rate = Savings / (Gross income - taxes)

Where I live, social health insurance is income-based, but I don't subtract it from gross income because I'm going to have to pay it no matter where I live in the future.

As a freelancer, I could subtract business expenses, but I don't because they're low to begin with and I'll probably spend that money on hobbies after retiring.

[LennStar]

Save as much as you can and forget about the rate.

Haha, right!

I simply calculate "paycheck" - "what I put away".
That is what *I* achieve. There is also a sizeable bit going into health insurance and state pension systen, but I can never touch that, so I don't use that. 
And I have a savings rate North (even after current inflation) of 1/3 with an income many people say is not enough to pay the bills sigh

[use2betrix]

I calculate it by my total spend vs my total take home income - included in this is 401k and (vested) match. I use take home because it’s the truest number that will be in comparison for when I FIRE. I have no idea what my health insurance costs or tax rates will be when I FIRE. I can guess/plan, but I certainly can’t predict it 100% accurately. Even company to company these numbers vary wildly (particularly health insurance and tax rates for people with varying income).

Starting in January I will be taking a huge pay cut (for a significantly increased work/life balance). One of the benefits will be a 5% “pension” that isn’t vested until 3 years with the company. I am likely going to consider this part of my ‘take home income’ like a vested 401k match, just for sheer personal satisfaction so that I can take the brunt of the paycut with a little more ease. Worse case scenario, I don’t make it 3 years and I can easily go back to my little savings-tracking note that I have and remove it..

I generally wouldn’t consider that part of ‘my’ definition in regards to savings rate, but the good thing about it is that everyone is free to do what they want. I don’t know if I’ve hardly ever had a conversation about savings rate with people in real life, and if so, it was more of a brief part of a broader conversation, and certainly not a sticking point in comparison with one another.

Alternatively, IMO the ‘correct’ way to handle the above would be to count that 5% as income in the month that I hit 3 years with the company.

Or… if I don’t make it 3 years, deduct that amount from the month I’m no longer with the company and count it as an expense, but that could generate a host of other overall tracking/visibility issues.

Lastly - I also get a $10k sign on bonus, but if I quit within the first year, I have to pay it back. I’m planning to count that as income when I receive it, and if I should have to pay it back, I’ll just go back and revamp the numbers…

There’s tons of individual factors for many people to make this a one-size-fits-all.

[Metalcat]

How you calculate it doesn't really matter except in terms of what you are trying to use it for.

What purpose does this calculation serve for you?

This calculation doesn't have an intrinsic use, so it's only purpose is what purpose you assign to it, so that's why you need to know that purpose before you can figure out how best to calculate it.

[rpr]

Interesting thread. One issue is that the taxes are a function of how much you save in your 401k and deductible IRAs. That can mess up the calculation somewhat.

Ultimately what matters is the multiple of your retirement expenses you have saved. Again this is also variable since you have to take into account other sources of retirement income such as social security and pensions etc. 

[Metalcat]

Interesting thread. One issue is that the taxes are a function of how much you save in your 401k and deductible IRAs. That can mess up the calculation somewhat.

Ultimately what matters is the multiple of your retirement expenses you have saved. Again this is also variable since you have to take into account other sources of retirement income such as social security and pensions etc.

I don't think it messes anything up, it's just stuff you might want to account for when coming up with how you calculate it.

As I said before, this calculation doesn't really have a retirement planning purpose, it's more a visualization tool for people to gauge how they are doing, but because it needs to be customized to each individual, it's not all that meaningful except to that individual.

Unless I'm missing something. You said "ultimately what matters" but in my years here I've never seen anything that ultimately matters when it comes to saving rate calculations, and that's always seemed to be the consensus.

It's always been, as far as I understand it, more of a tool for comparing year to year savings rates, so how it's measured doesn't really mattered, just that the values can be effectively compared if someone wants to do that.

Am I missing something?

[rpr]

@Malcat  -- I meant to say that what matters is how much you save in terms of future expenses needed. And that is connected to your savings rate. This can be confounding as we see so many different ways of calculating.

[Metalcat]

@Malcat  -- I meant to say that what matters is how much you save in terms of future expenses needed. And that is connected to your savings rate. This can be confounding as we see so many different ways of calculating.

It's only connected to your savings rate assuming you don't have a variable income though, which is increasingly common with the rise of side hustles and the gig economy.

I've personally never had the same income twice.

[mistymoney]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

Why is that? Seems that either you don't count it (which I haven't ever done) or you add it to both numerator and denominator as it is compensation and savings once you are vested, shouldn't count it anyway if you aren't vested. Filed under "anything can happen" even if you plan on staying until vesting occurs.

But I just leave it out altogether.  But if you counted for a few years, and then stop counting, makes your metrics look like you are doing less?

As I recall, they say it is because SS will replace less of your income above this level. Honestly, with a mediocre match and a high income, the match isn't going to move the savings % needle by much.

Why is this a given? Was the question only addressing this narrow segment, or just a general question on how people calculate for themselves?

And I don't see how SS has anything to do with savings rate?

[ixtap]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

Why is that? Seems that either you don't count it (which I haven't ever done) or you add it to both numerator and denominator as it is compensation and savings once you are vested, shouldn't count it anyway if you aren't vested. Filed under "anything can happen" even if you plan on staying until vesting occurs.

But I just leave it out altogether.  But if you counted for a few years, and then stop counting, makes your metrics look like you are doing less?

As I recall, they say it is because SS will replace less of your income above this level. Honestly, with a mediocre match and a high income, the match isn't going to move the savings % needle by much.

Why is this a given? Was the question only addressing this narrow segment, or just a general question on how people calculate for themselves?

And I don't see how SS has anything to do with savings rate?

For those who work the same number of years, SS will replace a bigger % of salary for low income workers. As such they don't need to save as big a pot, relative to their salary, to be comfortable in retirement. Conversely, if you are earning well in excess of the SS earnings limit, SS will look like a drop in the bucket to you.

For those of us who are saving 25x or more, independent of SS, it doesn't matter. But as s rule of thumb, it isn't the worst I have heard.

For more details, please query The Money Guy, I am not their apologist.

[mistymoney]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

Why is that? Seems that either you don't count it (which I haven't ever done) or you add it to both numerator and denominator as it is compensation and savings once you are vested, shouldn't count it anyway if you aren't vested. Filed under "anything can happen" even if you plan on staying until vesting occurs.

But I just leave it out altogether.  But if you counted for a few years, and then stop counting, makes your metrics look like you are doing less?

As I recall, they say it is because SS will replace less of your income above this level. Honestly, with a mediocre match and a high income, the match isn't going to move the savings % needle by much.

Why is this a given? Was the question only addressing this narrow segment, or just a general question on how people calculate for themselves?

And I don't see how SS has anything to do with savings rate?

For those who work the same number of years, SS will replace a bigger % of salary for low income workers. As such they don't need to save as big a pot, relative to their salary, to be comfortable in retirement. Conversely, if you are earning well in excess of the SS earnings limit, SS will look like a drop in the bucket to you.

For those of us who are saving 25x or more, independent of SS, it doesn't matter. But as s rule of thumb, it isn't the worst I have heard.

For more details, please query The Money Guy, I am not their apologist.

oh - I guess I'm just misunderstanding how relative percent of SS payback would impact on whether or not you included employer 401k match into your savings rate. Are you talking about employer contribution to social security taxes?

[mistymoney]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

Why is that? Seems that either you don't count it (which I haven't ever done) or you add it to both numerator and denominator as it is compensation and savings once you are vested, shouldn't count it anyway if you aren't vested. Filed under "anything can happen" even if you plan on staying until vesting occurs.

But I just leave it out altogether.  But if you counted for a few years, and then stop counting, makes your metrics look like you are doing less?

As I recall, they say it is because SS will replace less of your income above this level. Honestly, with a mediocre match and a high income, the match isn't going to move the savings % needle by much.

But if employer match is a percentage of income, I don't think high/low income would affect it that much.

What would you consider a mediocre match? or even high income? I'm at about 150k income - 2-3 years ago I would have considered that high, lol. Not quite now. My company match will be nearly 10k which I consider that a pretty decent contribution to my retirement coffers.

Previous to this company, I worked 8 years at a place with no match. Ugh! had an ESOP instead and it was far less than stellar, both in terms of the percent salary that went in and the performance.

[bryan995]

Savings rate alone is a bit incomplete no?
Reporting % saved on your current expenses ignores the fact that your expenses in FIRE could be dramatically different (likely lower).

Why not move to using a metric such as “assumed FIRE expense years saved” per year.

AFEYS

0.5 AFEYS means you are currently savings half of your expected yearly FIRE expenses per year.
2.0 AFEYS means you are currently savings 2 years of your expected yearly FIRE expenses per year.

Or a more normalized metric could be the “assumed MMM FIRE expense years saved”. This metric is pegged to a fixed 36,000 expense / year.

AMFEYS

Though at this point reporting the raw $ saved / year would be far simpler.

[charis]

MMM includes his methodology in the Simple Math post.

The Money Guy actually uses different formulas depending on your income level (at some point, you stop counting the employer match).

So, the thing that matters is that you are consistent with the goal you are measuring against. If this is just to compare to yourself year after year, use what makes sense to you.

Prior to joining financial forums, we looked at income taxes: spending: saving ratio, just because the taxes withheld seemed close to our spending one year so we started checking every year. I have since run savings/gross a few times, but I don't actually track it.

Why is that? Seems that either you don't count it (which I haven't ever done) or you add it to both numerator and denominator as it is compensation and savings once you are vested, shouldn't count it anyway if you aren't vested. Filed under "anything can happen" even if you plan on staying until vesting occurs.

But I just leave it out altogether.  But if you counted for a few years, and then stop counting, makes your metrics look like you are doing less?

As I recall, they say it is because SS will replace less of your income above this level. Honestly, with a mediocre match and a high income, the match isn't going to move the savings % needle by much.

But if employer match is a percentage of income, I don't think high/low income would affect it that much.

What would you consider a mediocre match? or even high income? I'm at about 150k income - 2-3 years ago I would have considered that high, lol. Not quite now. My company match will be nearly 10k which I consider that a pretty decent contribution to my retirement coffers.

Previous to this company, I worked 8 years at a place with no match. Ugh! had an ESOP instead and it was far less than stellar, both in terms of the percent salary that went in and the performance.

Saving rate is savings rate, it's not related to or affected by how much income your SS will replace in retirement.  There is something missing here or folks are confusing two issues. 

I include my match as income because that's what it is.  It's additional income (5% of my gross salary) paid by my employer directly to my 401k and that's nothing to sneeze at.  Why would I include my other income and not the match? That's illogical.

Savings rate is take home pay, which includes 401k/FSA/HSA contributions.  Just because directly deposited to a different account doesn't mean it's not take home pay.

Frankly, savings rate has nothing to do with FIRE or expenses in retirement.  It's just a method of seeing how much you can currently save from your income.

[ChickenStash]

I don't use the saving rate for much more than a quickie stat to see where I'm at trying to deal with my consumerist tendencies over time. For my purposes, I just divide the total of my contributions to retirement or other investment accounts by my gross income. I prefer to include taxes in the mix because they can be significantly influenced by other lifestyle choices so it makes sense that they are part of the total package. I also include any 401k match as part of my overall income and savings although with the rules around vesting I could see leaving it out.

[Treedream]

Considering I have no influence on my or my employers pension contributions I use nett income and calculate my savings and investment percentage on that base. + it would be a hassle each time to look up what the contributions were and how much they've grown etc. I don't track pensions for my FIRE calculations. But then I am European, 30 years old and in the early accumulation stage. The percentage is purely for my own comparison.

[charis]

Considering I have no influence on my or my employers pension contributions I use nett income and calculate my savings and investment percentage on that base. + it would be a hassle each time to look up what the contributions were and how much they've grown etc. I don't track pensions for my FIRE calculations. But then I am European, 30 years old and in the early accumulation stage. The percentage is purely for my own comparison.

Employer pension contributions are not what I was referring to (don't know know if anyone else was).  A "match" is where the employers matches, up to a certain point, the employee's contributions to their 401k (or equivalent).  It's income the same as one's own 401k contributions.

[mistymoney]

Considering I have no influence on my or my employers pension contributions I use nett income and calculate my savings and investment percentage on that base. + it would be a hassle each time to look up what the contributions were and how much they've grown etc. I don't track pensions for my FIRE calculations. But then I am European, 30 years old and in the early accumulation stage. The percentage is purely for my own comparison.

Employer pension contributions are not what I was referring to (don't know know if anyone else was).  A "match" is where the employers matches, up to a certain point, the employee's contributions to their 401k (or equivalent).  It's income the same as one's own 401k contributions.

qualifier: if you are vested

[charis]

Considering I have no influence on my or my employers pension contributions I use nett income and calculate my savings and investment percentage on that base. + it would be a hassle each time to look up what the contributions were and how much they've grown etc. I don't track pensions for my FIRE calculations. But then I am European, 30 years old and in the early accumulation stage. The percentage is purely for my own comparison.

Employer pension contributions are not what I was referring to (don't know know if anyone else was).  A "match" is where the employers matches, up to a certain point, the employee's contributions to their 401k (or equivalent).  It's income the same as one's own 401k contributions.

qualifier: if you are vested

Yes, and that's an argument for not counting the match until vesting. Not sure why one would stop counting it as income though, once vested.

[Arbitrage]

I use:

Savings (including employer match) /
Net income (Salary + employer match - payroll and income taxes)

When I want to pump the number up for all the feels, I add debt principal paydown on the savings side.

[rpr]

I use:

Savings (including employer match) /
Net income (Salary + employer match - payroll and income taxes)

When I want to pump the number up for all the feels, I add debt principal paydown on the savings side.

That's good enough for me as well. 

[Tigerpine]

I keep it very simple.

Savings Rate = (Savings) / (Gross Income)

Savings is composed of Investments, Sinking Funds, and on rare occasion actual savings (whenever we decide to increase the emergency fund).  Gross income includes income from all sources, including gifts received, interest, and dividends.

I've heard the arguments for excluding taxes from income or adding 401(k) matches to savings, but I'd rather keep the numerator small and the denominator large.  That gives a smaller rate, which I find more motivating. 

[patchyfacialhair]

I keep it very simple.

Savings Rate = (Savings) / (Gross Income)

Savings is composed of Investments, Sinking Funds, and on rare occasion actual savings (whenever we decide to increase the emergency fund).  Gross income includes income from all sources, including gifts received, interest, and dividends.

I've heard the arguments for excluding taxes from income or adding 401(k) matches to savings, but I'd rather keep the numerator small and the denominator large.  That gives a smaller rate, which I find more motivating.

I do the same thing. Using traditional MMM math, we're over 50% savings rate, but using the simple formula of (Total Saved)/(Gross Income) we're just above 20%. I like how it sheds more light on how much my wife and I pay in taxes.

[Dave1442397]

I keep it very simple.

Savings Rate = (Savings) / (Gross Income)

Savings is composed of Investments, Sinking Funds, and on rare occasion actual savings (whenever we decide to increase the emergency fund).  Gross income includes income from all sources, including gifts received, interest, and dividends.

I've heard the arguments for excluding taxes from income or adding 401(k) matches to savings, but I'd rather keep the numerator small and the denominator large.  That gives a smaller rate, which I find more motivating.

Same here. I can't be bothered trying to figure out savings after taxes, etc. We save 30% of our gross income right now, and that's all I need to know.

[charis]

I keep it very simple.

Savings Rate = (Savings) / (Gross Income)

Savings is composed of Investments, Sinking Funds, and on rare occasion actual savings (whenever we decide to increase the emergency fund).  Gross income includes income from all sources, including gifts received, interest, and dividends.

I've heard the arguments for excluding taxes from income or adding 401(k) matches to savings, but I'd rather keep the numerator small and the denominator large.  That gives a smaller rate, which I find more motivating.

Same here. I can't be bothered trying to figure out savings after taxes, etc. We save 30% of our gross income right now, and that's all I need to know.

Mint, where we track all spending and income, does this automatically.  It's not for everyone but it's been great for me.

[sonofsven]

I don't. My income is different every month. I've never seen the point.

[ixtap]

I don't. My income is different every month. I've never seen the point.

People make these calculations monthly?!? And I thought we were being silly with spending any time on our annual savings: taxes withheld: spending ratio.

[charis]

I don't. My income is different every month. I've never seen the point.

People make these calculations monthly?!? And I thought we were being silly with spending any time on our annual savings: taxes withheld: spending ratio.

I can't imagine any point in calculating monthly.  In any event, it's just an interesting data point that helps me see the overall financial picture.  For instance, our SR went down over the last year even though our income was higher than ever.  Oops.

[Zikoris]

I don't. My income is different every month. I've never seen the point.

People make these calculations monthly?!? And I thought we were being silly with spending any time on our annual savings: taxes withheld: spending ratio.

We calculate savings rate quarterly and annually.

[Tigerpine]

I don't. My income is different every month. I've never seen the point.

People make these calculations monthly?!? And I thought we were being silly with spending any time on our annual savings: taxes withheld: spending ratio.

We calculate savings rate quarterly and annually.

My spreadsheet happens to calculate it monthly and annually.  The monthly one is pretty meaningless, except that it can be interesting to see the ebb and flow throughout the year.  It can help in identifying patterns or identifying outliers.

[sonofsven]

I don't. My income is different every month. I've never seen the point.

People make these calculations monthly?!? And I thought we were being silly with spending any time on our annual savings: taxes withheld: spending ratio.

I guess that shows how little I've thought about it.
I can see why people would want to do it, I'm just not crazy about number crunching.

[charis]

I don't. My income is different every month. I've never seen the point.

People make these calculations monthly?!? And I thought we were being silly with spending any time on our annual savings: taxes withheld: spending ratio.

I guess that shows how little I've thought about it.
I can see why people would want to do it, I'm just not crazy about number crunching.

I don't number crunch much, but I have software that does it for me automatically.