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# Savings Percentage Calculation

July 8th, 2019 at 09:33 am

I am having trouble coming up with meaningful ways of looking at how we're doing with savings.

Spending is easier. We have net take home pay, and we spend a certain percentage of it. I can track this every month.

But savings is different. Our take home pay is affected by pre-tax savings. My husband takes 15% out of his paycheck for his 401-k-like-thing and I set aside money from my business for my SEP that never is calculated into my gross at all. But this is a big part of our savings! If he didn't take out the 15% or if I didn't set aside the SEP money our net wages would be higher. So if I just ignore those sums, then it doesn't look like we're saving as much as we are.

(We also put the max in our Roths each month, but that is post-tax).

So is there a formula for figuring out your savings percentage?

I worked out our savings percentage is 20.7% of our net (but that only includes our Roths and some other misc. savings).

Our savings percentage of gross was calculated like this:
(Savings from net + 401k + SEP) divided by (gross salary + SEP). This assumes that the SEP would be salary if it weren't being saved.

That percentage is 26.3 which is more accurate I think.

Do you have a method for this?

### 5 Responses to “Savings Percentage Calculation”

1. creditcardfree Says:

Yes, I think your final method is the most accurate based on gross income.

2. Amber Says:

I agree with CCF

3. Jenn Says:

i agree and do the same. In fact, after I saw a blogger do it, I started adding the employer contributions to the 401k and the HSA to both overall income and to savings before calculating the rate.

4. disneysteve Says:

I just do it based on % of gross.

Let's say gross is 100K.
13% or \$13,000 goes into 401k.
\$5,000 goes into Roth. That's after-tax money but it represents 5% of gross.
\$500/month or \$6,000/year goes to EF. Again, after-tax money but 6% of gross.

So that would be a total of 13+5+6=24% savings rate.

I don't count 401k match as savings since it isn't my money going in.

5. Buendia Says:

I didn't even think about the match! I wasn't counting that either. I just need to add the money I put into my sep as part of gross... so that's basically how I've been doing it.

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