Does The “Perfect Save Rate” Exist? I Figured It Out

The Money with Katie Show

Money with Katie

Investing, How To, Self-improvement, Business, Education

4.8 • 1.3K Ratings

🗓️ 26 July 2023

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

The biggest money question we have is usually: How do I enjoy my life now and plan for enjoying it later? If we go too far in either direction, we're sacrificing the quality of our lives at one point or another. So does the “perfect” save rate exist that optimizes for both now and the future? And if so, what is the ideal percentage of our income to save that would work for most people, most of the time? Here's the number I landed at, and why. Transcripts can be found at podcast.moneywithkatie.com — Mentioned in the Episode Save Rate Spreadsheet [Make a copy!]: https://docs.google.com/spreadsheets/d/1rTlDhv2GGRUczBF_1W0PX_OCxKFNR9ZZp78EKpP2KTc/edit?usp=sharing Why Hitting "Half FI" is More Like 75%: https://moneywithkatie.com/blog/why-hitting-half-fi-is-more-like-75 Money with Katie Wealth Planner with the Financial Independence Calculator: https://moneywithkatie.com/new-2023-wealth-planner — Follow Along at Money with Katie: https://moneywithkatie.com/ Watch on YouTube: https://www.youtube.com/@MoneywithKatie Follow Money with Katie! - Instagram: https://www.instagram.com/moneywithkatie/ - Twitter: https://twitter.com/moneywithkatie Subscribe to The Money with Katie Newsletter - Sign up for free today: https://www.morningbrew.com/money-with-katie/subscribe/2 Follow the Brew! - Instagram: https://www.instagram.com/morningbrew/ - Twitter: https://twitter.com/MorningBrew - TikTok: https://www.tiktok.com/@morningbrew Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome back to the Money with Katie Show, Rich Girls and Boys.
0:12.7	Today's going to be a fun little mix of the philosophical and the tactical, which is
0:19.0	my personal favorite.
0:20.6	So let's jump in with a really big question.
0:23.6	How do I strike a balance between enjoying my life now and enjoying it later?
0:28.8	That's one of the biggest questions that we typically face in our money lives, right?
0:39.6	And it's why one of the largest challenges in personal finance is figuring out how much
0:45.1	of your income you should be saving.
0:48.6	It's a question that drives at the heart of the dilemma of delayed gratification and
0:53.4	living for the present moment because if you go too far in either direction, you're
0:58.1	either sacrificing your current happiness for the sake of your future self or vice versa.
1:04.3	Now I'm a born optimizer, which means I want to know where I am going to get the absolute
1:10.8	highest leverage results.
1:13.4	So I was personally very curious if the perfect save rate existed.
1:19.1	As well, I know there might be an ideal answer for each individual and personal finances
1:24.9	personal.
1:25.9	We know that, right?
1:26.9	But I figured there was probably a good chance that there was some number out there, some
1:32.0	ideal percentage of your income to save that would represent that top of the bell curve.
1:39.0	A percentage that would work for most people, most of the time, to get them to a place
1:44.6	where they can comfortably cut back on work or stop working entirely and live off their
1:51.2	savings.
	...

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