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# Private Savings Calculator

What is private saving?How to use the private savings calculatorPrivate saving formulaFAQs

The private savings calculator offers a tool for a clear understanding of savings in the country's private sector. Utilizing the private savings formula gives you a quick way to estimate this crucial metric for the national economy.

Read on to learn what private savings are and how to calculate them manually or with our tool. If you are looking for a personal savings estimator instead, check the simple savings calculator, which we designed for that purpose!

## What is private saving?

Private saving is one part of the national saving that includes private disposable income minus consumption. The other part is government saving, which focuses on net government income and government purchases.

We use private savings to:

• Fund new capital investments;
• Help finance the government's budget deficits;
• Acquire assets from foreigners; and
• Lend assets to foreigners.

## How to use the private savings calculator

Our tool is straightforward to use. Enter the values for each variable included in the private savings equation from the top to the bottom of the calculator to see the final result:

2. Taxes paid to government.
3. Consumption represents the private sector's spending to meet current needs.
4. Check the include additional parameters box in the private savings calculator to see the following extra parameters:
• Net factor payments from abroad;
• Transfers paid by the government to the consumers; and
• Interest payments on the government's debt.
5. Private savings is the final result of the private savings formula.

Have you already found your answer? You can also check the disposable income calculator to learn the income each household has after deducting taxes and receiving government transfers.

## Private saving formula

Let's now see how to find private savings by hand. We use the following private saving equation:

$\small S \! = \! \mathrm{GDP} \! - \! T \! - \! C \! + \! \mathrm{NFP} \! + \! \mathrm{TR}\! + \! \mathrm{INT}$

where:

• $S$ — Private savings;
• $\mathrm{GDP}$ — Total income or gross domestic product;
• $T$ — Taxes;
• $C$ — Consumption;
• $\mathrm{NFP}$ — Net factor payments from abroad;
• $\mathrm{TR}$ — Transfers received from the government; and
• $\mathrm{INT}$ — Interest payments on the government's debt. Check the interest rate calculator to find out more about interest payments.

💡 The private savings formula is very similar to the private disposable income formula. Here is the private disposable income formula:

$\mathrm{GDP} \! - \! T \! + \! \mathrm{NFP} \! + \! \mathrm{TR}\! + \! \mathrm{INT}$.

FAQs

### How do I calculate private savings?

To find private savings, you need to:

1. Find the total income or gross domestic product.
2. Substract taxes paid to the government.
3. Subtract consumption expenses.

To extend the calculations, you can also add net factor payments from abroad, transfers from the government, and interest payments on the government's debt to obtain the precise value of private savings.

### How much is private saving if income is $7B and consumption is$2B?

If no tax is applied, the private savings from an income of $7 billion and a consumption of$2 billion is $5 billion. Assuming that taxes constitute 20% of the income, i.e.,$1.4 billion, then the private savings is equal to \$3.6 billion. Private savings equal income minus taxes and consumption expenses.

To precisely determine private savings, add the net factor payments from abroad, government transfers, and interest payments on the government's debt.

### What is the difference between private and government savings?

The private savings equation says it is the sum of the household and business sectors' savings, i.e., funds that were not devoted to consumption, such as bank or retirement accounts. Government savings are public savings consisting of taxes minus expenditures on goods, services, and transfers.

The sum of private and government savings is the country's national savings.