Money ratios can help you quickly gauge the health of your finances and pinpoint what changes you need to make to improve them.
Here 5 of the important ones you should know.
1. 50% Budgeting Ratio
The budgeting rule of thumb that limits your must-have expenses to less than 50% of your income.
2. Credit Utilization Rate
The ratio of the sum your revolving credit line balances to the to the overall credit limit.
3. Student Loan Debt-To-Salary-Ratio
The upper limit of student loan debt to take on in order to realize the return on investment in earning a college degree.
4. Loan-To-Value Ratio
How much of the property you purchased with a loan, you actually own.
5. Debt-To-Salary Ratio
A ratio of all your monthly debt obligation compared to your monthly income.
Related Article: How To Start Saving When You Don’t Know Where To Start
To learn more about why they are important and how to apply them to your finances, head over to read the entire post, at CleverGirlsKnow.com.
~ Melisa Boutin