Calculate Your Savings Rate

Tenemos comida en la casa! 🏡

Ooof…how many times have we heard that before? 🙃

While reheated frijoles and tortillas aren’t always every Latin@ kid’s favorite meal, it did save money. Eating a Happy Meal from McDonald’s is delicious but if you ate it every time you went out to eat, you wouldn’t be saving money. ❌ By saving and recalentando your food, you’re saving money, and in the long run, that is the most delicious taste of all. 😋

Let’s talk about how to calculate your savings rate. A savings rate is how much money you save deducted from your income after taxes that you put away for the future whether that’s retirement or a simple savings fund. 💰 The savings rate is written as a percentage or ratio and shows how much income is being used to be recalentado for later. Imagine your income as the food you eat monthly. The sushi…sandwiches…enchiladas…tostadas de tinga…okay, we’ll stop before we get too hungry. But, you get what we mean. The amount of food you save to be reheated later is your savings. 🌯

We love math too here at SUMA, and we can show you how to figure out your savings rate right now! It’s pretty easy, thankfully, and you can just use the calculator from your phone! 📱

First, you’re going to take all your savings you have in your bank account and divide it by your annual income after taxes. ➗ You’re going to get a decimal number. Next, move the decimal to the right two places and miral@ you have your savings rate! 🤩

So, if you have $5,000 in your savings account and you make $40,000 after taxes, divide $5,000 by $40,000. You get .12. Now, move the decimal to the right two places and you get 12%! That means 12% is your savings rate. 💰

It’s a simple math formula but so important to help you in your finances. 💯 Once you figure out your savings rate, you can set goals to make the savings rate higher. The more you can have in savings for the future and emergencies, the better you’re going to be off financially. 🤑 See, food recalentado doesn’t taste so bad after all. 😉