What is a good savings rate, and how do you work out yours?

How to calculate it

Savings rate = (income − spending) ÷ income × 100.

If you took home ₹1,20,000 this month and spent ₹84,000, you saved ₹36,000, a savings rate of 30%. Use take-home income, and count everything you spent, including bills and EMIs.

What's a good savings rate?

• Below 10%: a start, but there's little buffer if income drops.
• 10–20%: a solid, common target that builds an emergency fund and long-term investments.
• 20–30%: strong; you're building wealth steadily.
• Above 30%: excellent, and it shortens the path to big goals considerably.

The right number depends on your stage of life, income and costs. A rate that's steady or rising over time matters more than any single month.

Why it matters so much

A higher savings rate helps twice: you put more money aside, and you get used to living on less, so you'd need less to cover your expenses later. That's why small, lasting increases are so powerful.

Ways to raise your savings rate

• Save automatically on payday, before you can spend it.
• Find your top spending category and trim it by 10–20%.
• Cancel subscriptions you rarely use.
• When you get a raise, save at least half of the increase.
• Track it monthly so you can see the effect of each change.

This guide is general information, not financial advice. Your situation may differ, so check the details that apply to you.