5 Financial Important Numbers you need to know

5 Financial Important Numbers you need to know

How often do you wonder if you are on track with your finances? That’s the biggest question we get asked as financial planners when we work with clients on their financial plans.

It begins with establishing a baseline or foundation for your finances. Life is too busy and we need a structure and tools to help us stay in line.

A baseline to set goals and track your progress. Knowing your numbers is the only way to gain control.

Here are my top 5 numbers for you keep track of:

  1. Your take-home pay

You may wonder why I want you to know this number. Well, this is how much money is left over for you to live your lifestyle, pay your bills, save and of course spend a little.

If you work for someone, most likely you are getting W-2 and there are a lot of deductions happen from your gross pay before you get paid. Various taxes are being taken out, hopefully, retirement contributions are being made. Knowing what net pay allows you to plan your expenditures.

If you are self-employed or a business owner, you may not get W-2. NO problem, take a look your last 6 months worth of income, allow for taxes (state, federal, payroll), retirement plan savings & then take an average to arrive at what your net pay should be.

  1. Your Retirement Plan Contributions

Are you saving enough for retirement? I hope you are. There will be a time in your life when you would like not to work anymore. That’s why it’s important to start as early as possible. Here are some guidelines to follow:

20’s – save at least 10%

30’s – save at least 15%

40’s & 50’s save at least 20% to 25% (if you haven’t been saving in previous decades)

Increase your contributions every year or every time you get a pay raise, or make more income.

  1. Your Debt Balances (and Interest Rates)

If you carrying a debt of any kind (student loans, credit cards, mortgages, auto loans you must know the balances and what kind of interest rate you are paying.

First, there is always an opportunity to improve your debt situation, but we need to know where we stand first. Second, once we have a clear picture, we can focus your resources on paying “Bad Debts” such as credit cards, auto loans, personal loans. These debts are costing you extra interest and not adding any value to your financial picture. Why not work on getting rid of them asap? Let’s do it.

  1. Your Credit Score

Alright, with the recent Equifax Data Breach, it’s extremely important for you to know what’s going on across all your financial accounts. Not only you need to know your FICO score, but also you need to review your overall credit report to make sure nothing extra is on there.

You are entitled to a free credit once per year report from all 3 credit reporting agencies. I like www.annualcreditreport.com

  1. Savings Account Balance

Alright, the last but not least, not only I want you to know the balance in your savings account, I also want you to have one.

I am referring to Curveball (Rainy Day) fund, I beat this one to death, but you won’t believe how many people still don’t have sufficient emergency reserves in place.

My recommendation is at least 3 months of living expenses, and if you are self-employed or a business owner, you need to have 6 months or more in reserves.

These are my Top 5. I urge you not only to know your numbers but also constantly keep track. By the way join me for a Money Date, every Wed. at 6 pm PDT on Facebook Live to keep help you stay on track as your “financial foundation” has to be sturdy!

Anna Sergunina
Anna Sergunina

I'm Anna Sergunina, CFP®, President & CEO at MainStreet Financial Planning, Inc. My passion lies in serving others through financial planning, helping clients achieve their dreams like buying a home, saving for education, or retiring early. With over two decades in the industry and a CFP designation since 2009, I'm dedicated to excellence and continuous growth. Beyond work, I cherish moments with my son Liam, prioritize self-care, and engage in content creation for my Money Boss Parent Podcast and Money Library blog.

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