# Savings Rate

*Everyday Money — Finicade finance glossary*

Your savings rate is the share of income you don't spend — the single most predictive number in personal finance. It beats investment returns over the medium term because you control it completely: raising a savings rate from 10% to 20% roughly halves the time to financial independence, while a 1% better return barely moves it. Measure it on gross income for a strict version, or on take-home pay for a practical one, but measure it the same way every month.

**Formula:** `Savings rate = (Income − Spending) ÷ Income`

**Also known as:** personal savings rate, saving rate

**Related terms:** [FIRE (Financial Independence, Retire Early)](https://finicade.com/glossary/fire), [Budget](https://finicade.com/glossary/budget), [Disposable Income](https://finicade.com/glossary/disposable-income), [Compound Interest](https://finicade.com/glossary/compound-interest), [Net Worth](https://finicade.com/glossary/net-worth)

Source: https://finicade.com/glossary/savings-rate