If you want to get better at managing your money, there are some key financial numbers you should know. These numbers are crucial for various reasons and can significantly impact your financial life.
In this article, I’ll go over the most important money numbers you should be familiar with and how they affect your finances. Whether you’ve been avoiding these numbers or didn’t know they were important, this is a great place to start getting on track.
Many people are unaware of parts or even their whole financial situation, and today’s article will help. However, while simply reading this article will help, I highly recommend that you become more aware of your financial situation.
Being aware of your money situation can help you:
– Manage your money better
– Reach your goals
– Approach financial situations more effectively
– Be proactive about your life and finances
– Maintain a budget
– Share financial responsibilities
– Prevent financial infidelity
Without knowing your money numbers and overall financial situation, it would be hard to improve your financial life.
I’ve talked to many people who want to improve their lives but are unaware of some of the money numbers I’ll discuss today. Some people don’t know their monthly mortgage or rent payment, how much they are saving for retirement, or how much debt they have. Shockingly, some can’t even make a rough guess, and sometimes their significant other has to correct them. For example, someone might think they have $30,000 in credit card debt but actually have $50,000.
Today’s article will explain why knowing numbers like your total credit card debt is so important. Even if you think some of these numbers aren’t relevant to you right now, everyone can benefit from understanding them.
### 9 Important Money Numbers You Should Know
1. **Your Net Worth**
Your net worth is a key number because it gives you an overview of your financial health. Surprisingly, only 5% of people know their net worth. Knowing your net worth helps you see a complete picture of your finances, which is crucial for setting realistic goals. It can also make you more mindful of your spending and financial decisions and might encourage you to keep a budget. Your debt plays a big role in your net worth, so don’t ignore it. Knowing your net worth can also prevent financial infidelity and help you stay motivated with your financial goals.
2. **The Amount of Debt You Have**
Your total debt is a critical number to know. Be aware of your monthly mortgage payment, credit card debt, student loans, interest rates, estimated debt payoff date, and car loan costs. Many people avoid these numbers because they don’t want to face their debt, but acknowledging it is the first step to paying it off.
3. **The Amount of Money You’re Saving Each Month**
The average person saves about 5% of their income each month, which likely isn’t enough for retirement. Knowing how much you save each month helps you make better financial decisions. Most people think they save more than they actually do, so being aware of this number can help you improve your savings habits.
4. **The Amount of Money You’re Spending Each Month**
Many people don’t know how much they spend each month. Your total monthly spending is crucial because it shows whether you can afford things, where you might be wasting money, and areas where you can save. Creating a budget and tracking your spending can help you make better financial choices.
5. **Your After-Tax Income**
This is the amount you take home after taxes, health insurance, and other deductions. Knowing your after-tax income helps you create a realistic budget and prevents you from overspending based on an inflated sense of your income.
6. **Your Credit Score**
If you plan to get a loan, knowing your credit score is essential. It shows your creditworthiness and affects interest rates and loan approvals. Knowing your credit score prepares you for financial decisions like buying a home or car, and you can check it for free through services like Credit Sesame.
7. **The Financial Goals You Want to Achieve**
Everyone has financial goals, whether it’s retiring, paying off debt, or earning more. Knowing your goals gives you direction and motivation to work towards them.
8. **Family Account Information**
In an emergency, knowing all your family’s important account numbers is crucial. An emergency binder can store financial information, like bank account numbers and passwords, in one place. This is important for everyone, whether you have a family or are single.
9. **Desired Years Until Retirement**
Knowing when you want to retire is important for financial planning. It helps you determine how much you need to save and if you’re on track to meet your retirement goals.
### How Can My Family Stay Updated on These Money Numbers?
Because these money numbers are so important, I recommend holding regular money meetings with your partner to discuss them. In your money meeting, you should:
– Review your debt amounts
– Check your expenses
– Discuss your financial goals
– Talk about necessary changes
– Update your family budget
– Check on your retirement planning
– Discuss any financial problems
Money meetings will help you become more comfortable talking about your finances and make it easier to set and work towards goals with your partner. Starting regular money meetings is very important.
Do you know these important things about your money?