Personal saving is determined by subtracting personal outlays (spending) from disposable personal income. This figure can be expressed as a dollar amount, or more commonly, as a percentage known as the saving rate. For example, if disposable personal income is $100 and personal outlays are $90, personal saving is $10. The saving rate is then calculated as personal saving divided by disposable personal income, multiplied by 100. In this example, the saving rate would be 10%. Data for these calculations are often available from governmental statistical agencies.
Understanding the proportion of income saved provides valuable insights into economic trends and individual financial health. A higher aggregate saving rate can contribute to increased investment, potentially boosting economic growth. For individuals, tracking this percentage offers a way to assess financial stability and progress toward goals. Historical data reveals fluctuations in saving rates influenced by economic cycles, policy changes, and societal shifts.
