If you want to manage your money better, there are some money numbers you should know. These money figures can be very important for many reasons.
The article below explains the most important money numbers you should know and how they affect your financial life.
Whether you’ve been avoiding some of these important money figures or simply didn’t realize they mattered, today’s article is a great place to get back on track.
Many people don’t know part or even all of their financial situation, so today’s article will help.
However, while reading this article is helpful, I strongly recommend that you become more aware of your financial situation.
Knowing your financial situation can help you:
- manage money better
- achieve the goal
- Better approach financial situation
- Be proactive about your life and finances
- Helps you stay on budget
- don’t let it all fall to one person
- stop financial infidelity
Without being aware of your money figures and overall financial situation, it will be difficult to change your financial life for the better.
Because of what I do, I’ve spoken to many people who want to improve their lives but don’t know some of the money figures we’re going to discuss today.
Someone has told me that they don’t know how much their monthly mortgage or rent payments are, that they don’t know how much they’re putting in for retirement, or that they don’t know how much debt they have. There have been many times. .
Even more shocking, some people can’t even estimate these numbers. A person may even guess a number, only to then say that their significant other chimes in completely wrong. No, but it’s actually corrected and you’re told you have $50,000 in credit card debt.
Today’s article explains why numbers like total credit card debt are so important.
Even if you think some of these numbers are irrelevant to you right now, I believe everyone can learn more about them.
9 Important Money Figures You Should Know
1. Your Net Worth
Net Worth is an important number to know as it provides an overview of your financial situation.
According to the Association for Financial Counseling and Planning Education, only 5% of people know their net worth.
Net worth is one of the most important money numbers to know. This will give you a more complete picture of your financial situation and help you work toward realistic financial goals.
Knowing your net worth has many other benefits.
- It may help you manage your money better. Knowing your net worth can help you pay more attention to your spending and other financial decisions, and may encourage you to stay on budget. If it’s not as high, you’ll be pretty ambitious about increasing it.
- Your debt matters too. Many people think only of their assets, but debt is a big factor.
- might stop financial infidelity. Financial infidelity is when one partner keeps money secrets from the other, and this is even more likely if you are unaware of your net worth.
- It can help you reach your financial goals. As I said above, knowing your net worth is a great measure of how you are doing. If you know how you are doing, you can be more motivated towards your goals. Plus, knowing your net worth gives you a better idea of what’s going on!
You can easily Track your net worth with Personal CapitalPersonal Capital is a free service that allows you to summarize your financial accounts so that you can easily understand your financial situation. Connect and track your mortgages, bank accounts, credit card accounts, investment accounts, retirement accounts, and more all in one place.
2. Amount of debt
Your total debt is a very important money figure.
Here are the debt numbers you should know:
- monthly mortgage payments
- how much credit card debt
- How much student loan you have
- the interest rate on your loan
- Scheduled debt repayment date
- how much does your car loan cost you
I encourage you to learn these numbers. When it comes to debt, you don’t have to keep quiet.
One of the reasons people don’t know how much they owe is because they don’t want to face debt. Or, unfortunately, your spouse may be trying to keep this secret from you.
If this is you, we recommend changing it now.
You probably can’t get out of it unless you admit it in the face of debt. Plus, you can’t fully understand what debt is doing to your life until you’re faced with the real numbers.
The first step to paying off your debt is to accurately total your current debt. This will help you make a plan to start repaying and move on with your life.
3. monthly savings
The average person saves about 5% of their income each month. However, the average person definitely needs to save more money as most people will likely not have enough to live on in retirement.
Knowing how much you’re saving each month will give you a better idea of what changes you need to make to better manage your money. Most people believe they are saving more money than they actually are.
Plus, it might be exactly what you need to head towards better financial health.
If only one person in your relationship controls and knows this number, we recommend that you both know your savings number so that you can work on more savings together.
4. How much you spend each month
Some people don’t know how much money they spend each month.
Your total monthly spending is one of the most important money numbers to know. It also shows you whether you are saving money, wasting money, areas where you can save money, etc.
This will help you make better financial and purchasing choices in the future.
We recommend creating a budget and tracking your spending to see where your money is really going.
5. After-tax income
This is how much you’ll take home after deducting taxes, health insurance, and anything else that might be deducted from your monthly paycheck. This is the actual amount of your salary!
Some people run out of paychecks before they even get paid (such as taking out a car loan right after receiving a job offer). This is a very dangerous idea. Because I think I take home more than I actually do each month.
After deductions, taxes, health insurance, and everything else that may be deducted from your paycheck, you may end up with much less money than you first thought.
There are many other reasons to know your after-tax income.
Knowing your after-tax income will help you know exactly how much money you have to spend each month. This allows you to create a budget based on your after-tax income. A budget reflects how much you can afford and helps you plan better.
6. Credit score
Ok, not everyone will agree with me on this. However, if you plan to take out a loan in the future, it is very important to know your credit score. This is because your credit score tells others how creditworthy you are and is used as an indicator of your risk.
Your credit score is a major factor in determining interest rates and how much a bank will lend you.
Knowing your credit score can help you prepare to buy home or car insurance, rent or buy a home, apply for a loan or credit card, and more. Your credit score can also affect whether your loan is approved.
Additionally, you can check your Credit Score with Free Credit Sesamein just a few seconds.
In addition to this, we recommend getting a free credit report at least once a year. Receive one free annual credit report from three major credit bureaus (Equifax, TransUnion, and Experian). Yes, this means you get one from each, so you end up with three each year. We recommend that you space it so that you get it every 4 months.you can learn more about How to get your free credit report here.
7. Financial goals you want to achieve
Everyone dreams of what their future life will look like. Your financial goals may include:
- retirement or financial independence
- debt repayment
- get higher income
more! We have so many different financial goals.
Knowing your financial goals is important because it helps give you direction on what to work towards. Plus, knowing you’re working towards something gives you even more motivation.
8. Family Account Information
What would you do in an emergency? Do you know all of your family’s important account numbers?
One of the best ways to prepare is with an emergency binder. It’s a way to store all your financial information, such as bank account numbers and passwords, in one place. It can store insurance information, personal information about you and each member of your family, information about your bills, and more.
Having an emergency binder is very important.
I know that there are many families who would be devastated if something happened to the person who normally manages the household finances.
You may have lost your account information, lost your password, forgot to pay a bill, or lost your life insurance information.
It’s a good idea to keep all your family emergency binders in one place just in case something happens, even if it’s something no one wants to think about.
It is recommended to have an emergency binder in the following cases.
- you have a family
- you have a child
- you are single This is because if something happens to you, someone will likely have to handle your problem and you likely won’t know where to start.
An emergency binder can help just about anyone.
This is also useful in non-emergency situations. Creating a binder like this keeps all the family information organized for her in one place. It’s a quick and easy way to find all the information you’ll be referencing often.
My top tip is For emergency binder Help you create your own emergency binder. This is a fillable PDF workbook with over 100 pages.
9. Desired number of years until retirement
Retirement is a long-term goal for many people. Working for decades with the hope of retiring one day and knowing when you want to retire is an important part of financial planning.
It may take you some time to figure out when you want to retire, but having that number will help you plan to retire on time.
Your desired number of years until retirement tells you how much money you need to save between now and then, and if you’re on track for retirement.
How can my family keep these money numbers up to date?
The money numbers in today’s article are so important that I recommend having regular money meetings with your partner to find and discuss them.
Money conferences should:
- review the amount of debt
- check expenses
- Discuss financial goals
- Discuss what changes are needed
- update family budget
- Check your retirement plans
- Please contact us for any financial issues
Because everyone’s financial situation is different, there’s no exact outline of what to talk about at a money meeting.
Money meetings can help you feel more comfortable talking about your finances, making it easier to set goals and work towards them with your partner. It is very important to start regular money meetings.
Do you know these important things about money?