Saving Ratio shows how much money you save from income you earn.
We can describe positive cycle of saving ratio .
Wealth creation depends upon saving ratio
More saving ratio create more money for investment.
More investment create more return on investment .
More return on investment creates more income
More income creates more saving
You hear about saving ratio that saving ratio should be 20 or more than 20 to save money from investment .
However many of us do not have enough earing to start saving near to 20
So in that case we should start from 5 % to 15% saving from income and than grow to 20% criteria.
Do not worry about saving ratio is below 20% .Just start improving your saving ratio step by step.
Saving ratio also define how much you are saving while earning a lot .Many times people misunderstand Bank Balance with their saving ratio.
Bank balance is different from Saving ratio.
Saving ratio calculation should be done every month or quarter or annual basis .
Saving ratio indicate your financial habit about saving
As saving ratio depends upon income if you are not earing any income .Your saving ratio is near to zero