Do you know your numbers?
Use these 7 numbers to track your financial health, and manage progress toward your personal financial goals:
If you don't know your numbers, or need to get them moving in the right direction, schedule a FREE consultation with Brio, or explore the ways we can help.
- FICO (or other reliable credit) score: Many credit card companies, and websites like CreditKarma.com now provide some form of your credit score for free. Take advantage of the free information and know your score number. Just be sure you're working with a reputable company (like one you were already doing business with, or that you've thoroughly researched). And, don't forget to dispute anything you see that shouldn't be on your report and could be negatively affecting your credit score.
- Monthly net cash flows: Add up all your expenses for the month, including all non-discretionary (rent/mortgage, bills, etc.) and discretionary (eating out, clothing) spending. Subtract that total from your net pay (what you take home after taxes and any other mandatory deductions). If the resulting number is negative, it means you have cash flow problems that you'll need to address in order to meet your financial or business goals.
- Consumer debt ratio: This number is your non-housing (consumer) monthly debt divided by your monthly gross income. The percentage should be less than 20%, or you've got more debt than is optimal. See the other debt ratios it pays to know.
- Net worth: This number is your total assets minus your total liabilities. Brio's typical client has an average net worth between $250,000 - 500,000, but we're happy to help you even if you're just getting started with growing your assets. See how we serve our clients.
- Emergency fund goal amount: This number is the amount you'll need in the bank to cover a financial emergency like getting laid off your job, or having to pay unexpected out-of-pocket medical expenses. It should equal a least three, but ideally six months' worth of your non-discretionary expenses (rent/mortgage, bills, etc.)--items that you must pay.
- How much life/liability/disability insurance you need: These numbers can be calculated several different ways, so get help if you have questions, but mostly, just get insured however it makes sense for you--protect family members who rely on your income and/or your support as a caregiver.
- The amount you'll need at retirement: This is the biggest, and often most daunting number of all! Make a plan to reach your goal number by the time you retire, and ensure those dollars will last throughout your retirement, and still allow you to do the things you love!
If you don't know your numbers, or need to get them moving in the right direction, schedule a FREE consultation with Brio, or explore the ways we can help.