Measure your financial wellbeing
Ways to assess your financial health
2 min read
Do you know how financially healthy you are?
Just like how we keep track of our mental and physical health, it's important we look after our financial health as well.
In today's blog, I'll be sharing some common metrics that can help measure financial wellbeing, as well as a free spreadsheet to calculate your numbers!
Ways to measure financial wellbeing
A positive net worth is associated with good financial health, and indicates that an individual owns more than they owe. It is calculated by subtracting total assets (e.g. savings and investments) with total liabilities (e.g. loans).
Net worth = Total Assets - Total Liabilities
Net Worth
Debt to Income Ratio
Helps indicate if an individual can manage the amount of debt repayments they need to pay off. The higher the ratio, the harder it may be for the individual to stay on top of their debt and meet the repayments.
DIR = Debt Repayments / Monthly Income
Emergency Fund
Measures how much money is set aside to cover unexpected situations which require money, such as unplanned expenses or loss of income. Having extra money set aside provides peace of mind and extra protection.
EF = Total monthly expenses * desired months
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Measures how much money is saved from an individual's income as a percentage. A higher savings rate indicates that an individual has more money available to dedicate towards their financial goals.
SR = (Income - spending) / Income * 100
Savings Rate
Credit Score
Assesses how trustworthy an individual is based on their credit history. A higher credit score means that an individual is reliable with making repayments on time, and poses lower credit risk. You can use the free WeMoney app* to see your credit score report for Experian and Equifax.
*This is an affiliate link and we will both own $5 if you sign up
How financially healthy are you?
Easily measure your financial wellbeing with the free financial health calculator. Simply fill out the spreadsheet, and the numbers will automatically be calculated for you!
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