18 Personal Finance Ratios You Should Know

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Personal financial ratios can give you a picture of your proper financial health and progress relative to your goals.

Your personal financial statements, specifically net worth and the monthly budget, use your financial data to describe an individual’s or household’s financial condition.

Your net worth statement and monthly budget statement are the essential financial statements to create and update. As such, they hold the key to your current financial life.

These cheap dinner ideas come from frugal ingredients where the meat is versatile and allows you to shop according to the current market prices.

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The liquidity ratio is linked very near to the emergency funds. You should use this emergency cushion for unforeseen events.

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Your balance statement measures your net wealth at a point in time. As you add to your assets, hopefully outpacing your liabilities, you will be getting wealthier.

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The high savers do a better job of maintaining and building your wealth. They use age as a factor in the calculation, as some other ratios do.

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The current ratio is the best benchmark to determine liquidity in your household. It measures the household’s ability to repay a short-term debt in an emergency.

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The Debt-to-asset ratio is a standard ratio for companies. This ratio focuses on the borrowing ability of the individual or household.

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These financial ratios are useful as a starting point to understanding your financial health. They do not take the place of a sound financial plan.

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SWIPE UP TO READ MORE ABOUT 18 PERSONAL FINANCE RATIOS YOU SHOULD KNOW

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