The net savings ratio and the gross savings ratio can help you determine whether you are saving as much of your income as you think you are.
Your net savings ratio tells you what proportion of your after-tax income you are saving. To calculate this ratio, divide the amount of income that you save by the amount of income that you use to cover living expenses. In the United States, the average ratio is between 3 and 8 percent; however, your ratio may vary from this average depending on your current financial stage and your personal goals. As always, track the trend of this ratio--if it is decreasing, make the necessary changes.
Your gross savings ratio tells you what proportion of your before-tax income you are saving. This ratio is equal to your total savings divided by your total income. I recommend that, at a minimum, this ratio should be 10 percent, and for most students I recommend between 10 and 20 percent. As you get older, this savings ratio should also increase.
 
 In the example given, Bill and Suzy’s net savings ratio is calculated as their monthly savings divided by their total income after taxes, or $398 divided by $2,650, giving a ratio of 15%. They are saving 15% of their net pay.
 
Bill and Suzy’s gross savings ratio is calculated as the monthly savings divided by their total income before taxes or $398 divided by $2,760 or 14%. They are saving 14% of their total pay. While 14% is good, I recommend that you set a goal to save 20% of your gross income if possible.