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New year financial check-up

January 7, 2015

Here’s an idea….

It’s a good idea to give yourself a financial check-up at least once a year.  Many consumers make New Year’s resolutions about money management.  But, how do you know whether or not you’re financially stable?

In other words…

Financial stability can be determined by checking our net worth, debt-to-income ratio, and credit score.

  • Net Worth – total of all assets minus the total of all liabilities. That’s the dollar value of everything you own minus everything you owe or your total debts. Net worth should be positive and increasing each year.
  • Debt to Income Ratio – monthly debt payments (excluding mortgage) divided by net monthly salary. Less than 10% is best. More than 20% could be a sign of trouble.
  • Credit Score – Scores usually range from 300-850. The best scores are in the mid-700’s and higher. Some consumers may have a lower score because they haven’t used credit. This is often the case for young adults.  Some consumers don’t like to use credit and prefer to pay as they go. This is perfectly acceptable. The benefit of a higher credit score is that consumers can save thousands of dollars in interest because they qualify for lower interest rates on loans.

Here’s how you can use this idea to have a better life…

Give yourself a financial check-up today. To calculate your net worth, download a free worksheet by going to To calculate your debt-to-income ratio, download the free credit check up form at To find out more about credit scores, download the Credits Reports and Credit Scores fact sheet at

To Find Out More…

about managing finances and healthy living, go to

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