Hope Stories Bank of Hope Kendall Philbrick Jan 28, 2021

Getting your finances together can seem like a daunting task--especially when you don’t know where to start. For those just embarking on their financial journey, I recommend taking a little time to figure out the following 9 numbers. 

  1. Total debt 

Figuring out exactly what you owe is a crucial step to getting your finances in order.

If you’re not sure how much debt you have, or who you owe, I recommend you start by pulling a copy of your credit report. 

Take note of all the creditors that appear on your report, and verify your account balances with those creditors directly. 

Looking through old bank statements, emails, and mail can also be a good way to ensure you don’t miss any debts that may not appear on your report. 

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  1. Net worth 

Your net worth can be a good indicator of your overall financial wellness. Don’t know your net worth? 

No worries, simply subtract your total liabilities (i.e. credit card debt, student loans, back taxes, and car loans) from your total assets (i.e. cash, or cash equivalents, real property, and investments) and that’s your net worth!

  1. Credit score 

Your credit score, as well as your credit history, are among the most important factors in determining your eligibility for loans and lines of credit, as well as what your interest rates will be. 

Your credit score may also be used to determine your eligibility to rent housing, and to obtain certain professional licenses, so it’s important to know not only what your score is, but to ensure that the information being reported is accurate and complete. 

You can grab a free copy of your credit report here.

  1. Debt-to-Income Ratio 

Your debt-to-income ratio is the sum of all your monthly debt payments, divided by your monthly income, and it’s a super important number to know if you're considering taking out a home loan. 

Most lenders look for a debt-to-income ratio of less than 45%, although each lender is different. 

If you’re looking to take out a home loan, with a community-focused bank, check out Bank of Hope’s mortgages services, or call 1-855-448-8989 for more information. 

  1. Savings account balance 

Knowing how much money you have in your savings account can not only give you peace of mind, but it’s a good way to make sure you’re on track to meet your financial goals. 

If you don’t have a savings account, or you’re looking for a bank that puts their community first, check out Bank of Hope's savings account options.

They offer low monthly fees, automatic transfers, and you can feel good about banking with a bank who cares. 

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  1. Checking account balance 

Keeping track of how much money you have in your checking account is important to make sure you’re able to pay all your bills on time, and don’t run into a situation where you don’t have money if you need it. 

Luckily, Bank of Hope makes it simple to check your account balance anytime, anywhere with their easy to use, and smartly designed, mobile app, or via their 24/7 telephone banking feature. 

  1. Monthly Income & 8. Monthly Expense 

Your monthly income and expenses are two of the most important numbers to know when starting a budget, and measuring your overall financial wellness. 

While not all months look exactly the same, it’s a good idea to figure out how much you bring home each month, on average, as well as figuring out what your bare minimum expenses are. 

Determining these two numbers can give you a better idea of how much money you can reasonably put towards paying off debt, saving, investing, or working towards your other financial priorities. 

  1. Savings rate

Your savings rate is the percentage of income that you save each month, and can be determined by dividing your monthly savings, by your monthly income.

Most experts recommend trying to keep your savings rate above 20%, but the higher your savings rate, the better!

This article was written by Kendall Philbrick. 

The views and opinions expressed in this article do not necessarily represent the views and opinions of Bank of Hope.

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