The personal saving rate is among the many statistical reports that the government offers each month and essentially what is left of personal income after all other expenses have been paid, mortgage, taxes, etc are paid. Until recently this statistic was not available but now it has become a part of most budgeting efforts. In 1946 the U.S. started collecting personal saving data in order for it to be used for economic analysis.
Government agencies such as the Social Security Administration and the Internal Revenue Service require the use of statistics in all aspects of budgeting and financial analysis. In fact, they require this information from everyone to ensure that the numbers that they report to the public and to themselves do not have an influence on their decisions. If the numbers do not match the expectations of any one agency, then they can change the process to reflect those differences. It is therefore important that everyone understand how personal saving rates are collected and how they are used.
In general, personal saving rates are a way to measure how well the individual or household has managed its money. If you have a low personal saving rate then you are probably doing some good by saving a portion of your income for retirement or other long-term financial goals. On the other hand, if you have a high personal saving rate then you are probably living beyond your means and using your money for things that are not necessary.
The statistics that are collected to determine a person’s personal saving rate are all done voluntarily. This includes any information that is reported on pay stubs, bank statements, credit reports and other records that you may keep about your finances. The statistics will include how much of your income goes towards your debts and how much of it goes towards savings.
Because there are so many different factors that contribute to the personal saving rate, there are different methods for measuring it. One method of measuring the saving rate is comparing it to the average of other people of a similar income level. Another method of measuring the saving rate is comparing it to your personal or estimated budget.
Personal saving rates have the potential to greatly affect your budget and the way that you live. While they have been used in statistical analyses for a long time, they are only recently being made available to the general public in order to help individuals see where they stand financially. By using the statistics you can make changes in your lifestyle to help you build on a solid financial foundation.