Kirk Ramsay

The most important rate in personal finance isn’t the one that’s talked about most often.

You hear far more about interest rates, inflation rates, mortgage rates, treasury rates, insurance rates, growth rates and rates of return.

And to some extent, all those rates matter, at least to the broader economy.

But for you, in particular, the single most important rate is the only one that’s in your direct, immediate control—your savings rate.

To an underestimated extent, your financial future depends on the rate at which you save money every month. By how much does your income exceed your expenses, and how much of that surplus do you manage to squirrel away into savings and investment accounts?

That’s the long and short of it. The TLDR. The whole enchilada, the whole nine yards, and the whole ball game. It is the thing. Supreme.

If I was only able to use one number and one number alone to predict how well someone’s financial future was going to go, the rate at which they save would be the number.

If you’re in your wealth building years, most of your focus belongs on increasing your savings rate. Almost all the other good stuff is downstream of that.

Most people don’t know what they want. They just don’t.

Because it’s hard to know! Sometimes we get what we want, and we’re miserable. Other times, we get something different, and are pleasantly surprised.

What we want changes as we age and learn, meet new people and experience new things. We develop new tastes, new preferences, new desires.

We have to constantly keep rediscovering what we want. Or perhaps, we get to constantly engage in this dance with desire, influencing and shaping the things we want, figuring out what truly brings us joy.

The mistake is assuming you do. Thinking you know for certain what you want. Blindly believing that what you want is never going to change, despite how much and how frequently it’s changed in the past.

Look back ten years. Think about what you wanted then.

How different was that person and what they desired?

Now flash forward ten years and think about what you might want.

Somehow that’s much harder to imagine. We tend to think we’ll want more or less what we want now.

But we won’t. Wanting different things is a part of life.

The best we can do is continue to update what we think our preferences are as we get new information.

And to plan for change.

Because it’s constant.

Four examples of conversations I've had with clients in the past week:

1. Helped a couple who recently bought a home with a bigger mortgage re-examine their life insurance needs and get new policies to make sure they’re covered

2. Helped someone going through a divorce open a new bank account with a higher interest rate, start organizing their other financial documents, and began the process of figuring out what next steps might make sense

3. Coached a client through considering their various mortgage options, consolidating debt, and how a HELOC might fit into the picture eventually

4. Reviewed a client’s current cash flow and the automated deposits they have set up to help them gain some clarity and get a clearer picture of exactly where everything is going

There is so much more to personal finance than managing investments.

In fact, most of the conversations I have every week have almost nothing to do with markets or returns.

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Another day, another big bank horror story.

Single man. No kids. Retired with a pension. Wants to spend every last dime before he goes.

Him: “I don’t want to be the richest man in the graveyard.”

Bank employee: “Oh, but I want you to be!”

He was treated like a number. What he wanted was ignored. And it was obvious to him that they were putting the bank’s interests before his own.

I’ve heard so many similar stories it’s unreal. How is this kind of interaction still so common?

Wherever you decide to keep your money, you should feel seen and heard and that the whole interaction revolves around what you want.

If that hasn’t been your experience to date, just know there are in fact better options out there.