Average Propensity To Save

An economist’s way of describing the ant from the "Ant and the Grasshopper" fable. Average propensity to save is the percentage of income being saved, versus being spent on living expenses and fun stuff. The figure can be calculated per household, per person, or national basis.

Low income families tend to have a lower average propensity to save, because there is less money leftover after they pay for basics. Higher income families have more left over, so even after buying that Sea-Doo, they have a little they can put in the bank.

The average propensity to save is the opposite of average propensity to consume, which is the percentage of earned income spent on goods and services.