Learn / Savings rate
The savings rate on the FolioBright budget is one figure with one definition: what you moved into savings and investing, divided by your take-home income, as a running total for the year. This page shows how it is worked out, what counts, what deliberately does not, and why the card shows the year rather than the month.
The arithmetic
Take four months. Take-home income of $6,000 a month lands in checking; each month some of it moves to savings, a brokerage or a retirement account.
July to October
| Month | Take-home | Moved to saving & investing | That month |
|---|---|---|---|
| July | $6,000 | $1,500 | 25.0% |
| August | $6,000 | $900 | 15.0% |
| September | $6,000 | $2,400 | 40.0% |
| October | $6,000 | $600 | 10.0% |
| Year to date | $24,000 | $5,400 | 22.5% |
$5,400 moved to savings and investing of $24,000 take-home since July · 4 months · this month 10.0%.
The monthly figures run from 10% to 40%, and none of them is the savings rate. September’s 40% is a month with a bonus-sized transfer; October’s 10% is a month where the car needed work. The running total is the figure that holds still: 22.5%, every dollar saved since January over every dollar earned since January, and the one a yearly goal is measured against. The card leads with it and shows the current month beside it, in smaller type, because it is worth seeing and not worth steering by.
What counts as saving
The numerator is net transfers into saving and investing, read from the ledger: money moved into a savings, money-market or CD account; a deposit into an investment account; new money used to buy an investment; a retirement contribution. What comes back out is subtracted. The denominator is take-home income — the paychecks and other income recorded on your spending accounts, after tax, which is the money you had the choice to save.
Three things are deliberately left out, because each one would make the rate lie.
A transfer between two investment accounts is not saving. Moving money from one brokerage to another changes nothing about how much of your income was set aside, so it is neither in nor out.
A sale is not a withdrawal. Selling a fund inside an account turns it into cash inside the same account; the money has not left investing. A rate that counted sales as money out would fall every time you rebalanced.
A dividend you draw is counted once. If you move dividends from a brokerage to checking and record them there as income, they are income — in the denominator. They are not also charged against the numerator as money taken out of investing; that would count the same dollar twice, and on a portfolio that pays its owner weekly it drove one rate to −21% before the rule existed. A withdrawal that lands as income is matched to the income row it became, and counted there.
The card shows its work
Press the savings rate and it opens a sheet: the year-to-date sum at the top, a month-by-month table — take-home, moved, rate — and under each month every row that counted, grouped the way the rate groups them: take-home income, moved to saving, moved to investing, taken out, and borrowed, not un-saved. Nothing on the sheet is worked out a second time; it prints the same items the figure was made from. If the rate looks wrong, the row that made it wrong is on that sheet, and fixing the row fixes the rate.
A goal, set as a percentage in the budget’s assumptions, sits beside the figure. The budget’s saving and investing lines read the same movements, so the amount “spent” against a savings line and the amount the rate says you saved are the same number.
Questions
How is the savings rate calculated?
What you moved into savings and investment accounts, net of what you took out, divided by your take-home income. FolioBright reports it as a running total for the year to date — every dollar saved since January over every dollar of take-home since January — with the current month's own rate beside it.
Why is the savings rate a running total and not this month's figure?
A month's rate swings with pay dates and one-off transfers: a quarterly bonus saved in March makes March 60% and April 5%, and neither is your savings rate. The running total is the figure that steadies as the year goes on, and it is the one a yearly goal is measured against.
What counts as saving?
Money moved into a savings, money-market or CD account, deposits into an investment account, new money used to buy an investment, and retirement contributions. A transfer between two investment accounts is not saving, and a sale inside an account is not withdrawing — the money has not left.
Do dividends I withdraw count against my savings rate?
Not twice. A dividend moved from a brokerage to your checking account and recorded there as income is income — it is in the denominator. It is not also counted as money taken out of investing, because that would charge the same dollar against the rate twice.
Does money borrowed on margin count?
No. Drawing on margin and moving the cash out is a loan, not un-saving: your own money is still invested. The borrowed slice of such a withdrawal is left out of the rate and listed separately on the card, so you can see it was excluded on purpose.