One of the best ways to monitor your financial situation is to keep track of some specific financial numbers that indicate the state of your financial health. These financial numbers provide you with a good look at how your finances are doing and will help you make the right decisions concerning your finances by alerting you to problems before they become insurmountable. These numbers are easy to obtain and it will only take a few minutes of your time to monitor these numbers on a weekly or monthly basis.
The amount of money that you are able to put away for saving on a regular basis is a good indicator of your financial health. Having money available in a savings account allows you to purchase the things that you desire without having to rely on expensive credit, which carry interest charges and financing fees. If you are not able to put away at least 10% of your earnings into a savings account, you will want to examine your finances and rearrange your budget to reduce expenses so that you can put more of your income towards savings.
Personal Net Worth
One indicator of financial health that many people neglect to monitor is their personal net worth. Your net worth is the amount of your savings and the value of your assets minus the amount of your debts. Variations in your net worth follow spending trends over time and identifies spending areas that may be harming your financial health. If your net worth is a negative number, that is a warning sign of an impending financial disaster and steps should be taken quickly to correct the situation and increase your net worth as quickly as possible.
FICO Credit Score
Your FICO credit score is the credit score that most major lenders and companies use to determine your creditworthiness, although there are several other companies that compile credit scores as well. Your credit score can affect numerous areas of your life, including how much you will be charged to borrow money in the future, whether you will be approved for credit, and your ability to obtain housing in the neighborhood you desire. If your credit score drops unexpectedly, it may be an indicator of a problem that needs to be corrected or an indicator of identity theft. There are many companies available that will allow you to access your FICO score for a nominal fee.
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