Key Numbers To Make Tracking Your Finances Easier

One popular concern I’ve seen from couples and families as they work on finances is knowing what to focus on when you’re starting out.

It can be overwhelming to have to track your accounts, including debts, mortgage and investments if you have them. On top of that you have your monthly bills to worry about.

Credit scores are touted as a crucial number, but as you may have seen with my take on them, I do not think they can accurately capture your finances.

In fact, they just give a sliver of your financial story - how well you manage debt.

So what numbers do matter? How can you use them to track your progress and financial journey?

Let me show you!

Key Numbers To Track Your Money

Believe it or not, your financial health is a lot like your physical health.

Just as only looking at your weight doesn’t give you a holistic view of how healthy you are, so it is with money.

There are three numbers that can allow you to track your progress from building financial stability to achieving financial freedom.

The key numbers to review and track are your:

• Net Worth
• Monthly Cashflow
• Saving Rate

Let’s see how they can help you better handle your finances and hit your goals.

Net Worth

Think of your net worth as a financial snapshot of everything. Here you will look at all of your accounts in one shot.

To calculate your net worth you need to add up all your assets (such as your savings, investments, and real estate equity) and then subtract your liabilities. These can include debts like credit cards, car and student loans, as well as medical debts, and your mortgage.

The good news is there are plenty of options when it comes to pulling all of that information into one spot.

I’ve mentioned a few of my favorite apps for grabbing that data, but you can also use spreadsheets and do it yourself.

Don’t get stuck on deciding which app or service is the absolute best. Find a tool that works for you because even if you got the most advanced app to track your money, it’s going to do you no good if you’re not using it.

Heads up, it’s okay if your net worth doesn’t look so good when you begin.

When we first started, our net worth was negative. Every month we updated it. Seeing our progress of paying off our debts, building up our savings, and then watching the growth from our investments was motivating.

Cash Flow

While your net worth is a big picture view, your monthly cash flow gives you a good close up view of your money. How much are you losing or having at the end of the month?

Your cash flow lets you know if your budget is working or not. For some, they discover that the perfect budget they created doesn’t work in the real world. They didn’t include money for emergencies or perhaps they weren’t aware of how much they were spending.

Knowing where your money leaks are makes it easier to fix it.

Savings Rate

Finally, as you start working on your finances and establishing that financial cushion, you may decide you’d like to focus on growth. In that case, your savings rate is a good indicator of how fast you’ll reach your goal.

How much can you stash away after you’ve taken care of your essential expenses and debts?

It also includes pre-tax savings like your 401(k) and HSA contributions.

Tracking your savings rate helps you make sure your hard-earned money is working for you.

Ready To Give Your Savings A Boost?

Coastal has got you covered! With higher savings rates than many financial institutions you could reach your unique savings goals in no time.¹

See Coastal's Savings Rates

Keeping Tabs On Your Numbers

With your numbers set up and in place, there’s one last step - keeping tabs on them.

For us, we like to check on them monthly. It’s a rhythm where we can examine what’s worked, adjust what didn’t, and look ahead to the next month to switch things up if we need to.

If you’d like someone to work with you to create a financial plan, please reach out to Coastal’s Wealth management team, available through CFS*. 

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