Glossary
Savings Rate
Your savings rate is the percentage of your income that you save or invest rather than spend. It's calculated by dividing the amount saved by your total income over the same period.
Why it matters
Savings rate is a more actionable metric than net worth because you directly control it. Financial independence research shows that savings rate — not income level — is the primary determinant of when you can retire. Someone saving 50% of their income can reach financial independence in roughly 17 years, regardless of whether they earn $50,000 or $200,000.
Example
If you earn $5,000/month after tax and save $1,000 (including retirement contributions), your savings rate is 20%.
How Ray helps
Ray calculates your savings rate automatically by comparing income deposits to total spending. Run to see the percentage and how it's trended over the last several months.
$ ray "what is my savings rate?"Related terms
Budget
A budget is a plan for how you'll allocate your income across spending categories, savings, and debt payments over a set period — usually monthly..
Net Income
Net income is your take-home pay after all deductions — federal and state taxes, Social Security, Medicare, health insurance premiums, and retirement contributions.
Cash Flow
Cash flow is the net amount of money moving in and out of your accounts over a period.
Emergency Fund
An emergency fund is cash set aside specifically for unexpected expenses like medical bills, car repairs, or job loss.
Compound Interest
Compound interest is interest earned on both your original principal and on previously accumulated interest.