Savings Rate

Every month, I verify the status of my budget and investments. For me, one of the most important metrics is my savings rate. Your savings rate is simply your savings divided by your income. At the beginning of this journey, my goal was to average at least 25% savings rate each year. Now, I am able to consistently save 40% of my salary. I am very likely to increase this goal soon. I think we should be able to save 50% of our income every month. If you want more information, you can read how the savings rate is related to Financial Independence.

Now, I want to explain exactly how we compute our savings rate. Many online people compute their savings rate in order to make it as high as possible. On the other hand, I am trying to make it as fair as possible. For me, our savings rate is (Net Income – All Expenses) / Net Income. I do not do anything fancy with my savings: I do not remove taxes from my expenses, I do not remove my health insurance, I do not add retirement contributions… These are all things that would simply make my savings rate larger without any value! I want to be honest with myself and with you! Inflating my savings rate for showing off would be a disservice to everybody!

In this page, you will find the history of all my savings rate since I have kept track of it. You can also find all my monthly updates in which I share the details of my expenses for each month.

Note (March 2018): I changed the way I am accounting for my life insurance, this changes a bit my savings rates.

History

Here is the history of my savings rate over the entire time I have kept track of this important metric:

Our savings rate over time (Updated June 2019)
Our savings rate over time (Updated June 2019)

You can also see the 12 month average over time, in black. As you can see, before I started my journey towards Financial Independence, in late 2017, I was not saving a lot of my income. And worse, my savings rate was decreasing over time. After I improved my finances, I was able to greatly increase my savings rate! My savings rate is now twice higher than it was when I started to improve it. And I hope to continue to improve it as much as I can.

2019 (TBD)

2018 (39.89%)

2017 (12.92%)