Important Financial Metrics Everyone Should Know
Metrics can help determine your financial position. But there are ways, such as getting public sector employee loans, to help you stay ahead financially. If you’ve been working hard to exercise good money habits, chances are you want to know your current financial position. Read on to learn what are the vital metrics and how you can measure them.
Net worth is easy to measure, and it’s among the most important financial items you should track. If it goes up, you’re in a good financial position. Otherwise, it may be cause for concern.
In calculating net worth, you will need two values — your assets and liabilities. All you have to do is subtract the value of your liabilities from the value of your assets. For instance, you have $25,000 in your bank account, $60,000 in your retirement fund, and a $250,000 house, the value of your assets is $335,000. However, if you have a $150,000 mortgage and $25,000 worth of debts the value of your liabilities is $175,000 and your net worth is $160,000.
As the name suggests, this financial item refers to your monthly debt payments divided by your gross income. Generally, having a 36% or lower percentage of debt-to-income ratio means your debt is still manageable.
To calculate your debt-to-income ratio, add up your monthly bills and divide the value by your gross monthly income. Your monthly bills may include, house payment or monthly rental, child support or alimony, monthly loan payments such as student and auto loans, credit card payments, and other debts. Your expenses for taxes, gas, groceries, and utilities are not included.
It may be difficult to not have debts. However, making smart decisions when it comes to loans can make a significant difference. Consider public sector employee loans with affordable rates offered by ACCESS LOANS™ loan products,.
This metric refers to the percentage of your income that you’re saving monthly. You can use either your net or gross income, but make sure you’re consistent when measuring. Divide your savings by your income. Then, multiply the answer by 100 to get the percentage.
While many advisors recommend saving at least 20%, you can opt to save more. However, make sure you’re not sacrificing your quality of life just to maintain a high savings rate.
National credit agencies determine your credit score. There are various ways to get your credit score. The score that you get may also vary depending on what scoring system is used. The two systems are Vantage Score and FICO, with FICO being the most widely used.
How to Stay Ahead Financially
Knowing your current financial position is vital. But it’s more important to ensure good financial health not only at present but also for your future.
If you’re a government worker, you may want to consider public sector employee loans. Our loan programs are affordable, and you don’t have to worry about repayment fees. These loan programs will not affect your FICO score while helping build your credit history.
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