INDIANAPOLIS — There are four important numbers to track from time to time to make sure your finances are in good shape, says Andy Mattingly of Forum Credit Union.
In the latest Smart Money Minute, Mattingly suggests checking your credit score, retirement savings, emergency fund capacity and net worth once or twice a year.
He also explained how to assess those numbers and whether you’re on track to meet your financial goals.
Is my credit rating good?
Credit scores range from 300 to 800, Mattingly said, and just like bowling, the higher the better. The first milestone to aim for is 725 or higher, where you’ll get much better offers and interest rates. If you get to 800, your offers and rates will be the best of the best.
Have I saved enough for retirement?
For retirement savings, look at your gross income (ie before taxes). Aim to have an amount equal to that of your retirement fund at age 30, five to seven times that amount at age 50 and 10 to 13 times at age 67.
How much should be in my emergency fund?
The capacity of the emergency fund means the number of months you could cover your expenses with savings if you lost your income. A big goal is at least three months of spending, Mattingly said, a stretch goal is nine months.
What is my net worth?
Net worth equals money plus assets minus debt. It’s not uncommon to have a negative net worth when you’re younger, but strive for it in the positive. It suggests a goal of your age multiplied by your gross income divided by 10.
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