Investing term

What is Savings rate?

The share of your income you don't spend. Usually expressed as a percentage.

Your savings rate is the share of your income you don't spend, and it's the single biggest lever over whether you build wealth — bigger, especially early on, than investment returns. You can't control the market, but you largely control how much you save. A high savings rate also means you need less to live on, compounding the advantage in both directions.

For example

Saving 20% of a modest income beats saving 5% of a large one over a lifetime — the rate, more than the salary, builds the wealth.

Savings rate is taught hands-on in Stage 1 — Money, Goals & Your Financial Foundation.

See the lesson →

Related terms

APRAnnual Percentage Rate. The yearly interest cost of a loan, including most fees.CompoundingWhen your returns earn returns of their own, so money grows faster the longer it's invested.Emergency fundCash reserved for unexpected expenses, usually 3–6 months of your usual spending.Employer matchFree money from an employer that matches part of what you contribute to a workplace retirement plan.
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