piggy bank

What is a good savings rate?

That brings us to this thorny issue, how much are you saving? You want to become financially independent and you need to get there as fast as possible. No problem. Tighten your belt and save more. Your savings rate is your disposable income (income after taxes) minus your spending. So, the point is, if you want to save more, the only thing that can immediately change is your spending. The average saving rate for most people is around 5%. Look at this candidly. For you to achieve financial independence faster, you’ll need to up the savings rate to at least 20 %. That means diligently setting aside 20 % of your income, with the intended goal of amassing 30 times what you spend annually. Things are getting thick, people, but stay with me. Clearly, what we now need to do is cut out a number of things from our spending, right? Don’t hesitate, it has to be done.Savings rate

As usual, if you have any questions, Ask the Fellow!

 

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