1. What is Monthly Savings?

Monthly savings represent the amount of money remaining after subtracting your monthly expenses from your monthly income. It's a key indicator of financial health and your ability to build wealth over time.

2. How Does the Calculator Work?

The calculator uses a simple formula:

Where:

• Income — Your total monthly earnings from all sources
• Expenses — Your total monthly spending on all categories

Explanation: Positive savings mean you're spending less than you earn, while negative savings indicate you're spending more than you earn (deficit).

3. Importance of Tracking Savings

Details: Regular savings are essential for financial security, emergency funds, retirement planning, and achieving long-term financial goals. Tracking savings helps identify spending patterns and opportunities for improvement.

4. Using the Calculator

Tips: Enter your total monthly income and expenses in dollars. Be sure to include all sources of income and all expense categories for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: What's a good monthly savings amount?
A: Financial experts typically recommend saving at least 20% of your income, but any positive savings is a good start.

Q2: Should I include taxes in expenses?
A: If your income is pre-tax, include tax payments in expenses. If using after-tax income, don't include taxes.

Q3: How can I increase my monthly savings?
A: Either increase income (side jobs, raises) or reduce expenses (budgeting, cutting discretionary spending).

Q4: What if my savings are negative?
A: Negative savings mean you're spending more than you earn, which is unsustainable long-term. Review expenses for reduction opportunities.

Q5: Should savings include retirement contributions?
A: Yes, retirement contributions count as savings unless they're automatically deducted from your income.