One more day before that notification SMS comes in and it almost feels like the weight has been lifted off your shoulders (at least for those that were in survival mode the past few weeks). As I re-looked at my budget with some of the costs that needed adjustments, I came across an interesting article on the someone reflecting on their latest budget. In that article the terminology frequently used was the savings rate.

One of the thing that you should be looking out when budgeting for is the % of what each cater gory is taking up in your in your budget. If you have not read the article that I wrote on the Jar system,  ( read it here), I’ve highlighted some of the categories that people often group how they spend their money in, from which I have built my budget template in the yesterday’s article.

Looking at my own budget, I  have grouped the expenses in a few  cluster that will help me analyze whether the budget really does make sense. Below are the % of what each cluster takes up:


  • The earning rate simply present the total income that I am receiving monthly. This include money from my salaries, side hustle as well debt repayment for money I had lend to friends. It is from this pool that I should allocate the expenses as well as the savings.
  • Burn rate is money that I am spending on my living costs. This  includes  insurance, rates and taxes, study policies and others just to name a few.
  • The debt rate is money that I am spending on mandatory debt repayment. In this category currently is the only debt I carry, which is the home loan.
  • The saving rate is the money I am putting away . This includes money I’m  saving for long term and short term goals as well as extra money I am upfronting on the loan repayment.
  • The giving rate is money I am budgeting on giving to people. This excludes gift  I am buying for friends , or braii at my house because technically that is spending. This is budgeted giving where I am not benefiting but doing it from the goodness of my heart.
  • Finally, retention rate is essentially the money I am expecting to be in the bank account at the end of the cycle. One of the things that I like doing this is because spending until the last cent can make one feel a little poor and stressed out.  Imagine getting the news in the opening photo that pay day will be delayed?

Ultimately, the goal is to get the burn rate as little as possible, have a positive retention ratio, up your savings rate because from savings your investments will grow and finally have a heart to know giving is an act of love.

In the FIRE community, people save as much as 50% of their monthly income,  so my aim is to ensure by mid this year, that spending rate is reduced, and to up the saving rate to at least 40%. This will be quite challenging considering all the wedding finance admin that must come through within the next couple of months.

When last have you done your sense check? Up next is how to move from budgeting to  assessing your personal worth.




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