Forbes article "Financial Fitness Vital Signs"
gives readers an easy self-assessment for their financial health. Here are four indicators you should examine:
1. Emergency Fund
Are you using debt to cover your emergencies? 34% of Americans have no emergency savings, according to a 2015 survey by NeighborWorks America. You should strive for a minimum of one month’s worth of take-home pay in an emergency fund before working on any other financial goal. It is recommended to have three to nine months of take-home pay for an emergency fund.
2. Debt to Income Ratio
How well are you managing your debt? When it comes to handling what you owe, you can lower your debt, boost your income, or a combination of both.
3. Credit Score
Credit score is connected to debt to income ratio. What does your history with debt obligations tell other lenders?
4. Retirement Savings
The Employee Benefit Research Institute found that 64% of workers feel behind on their retirement savings. A poor credit score, high debt ratio, and lacking an emergency fund all come together as a cycle with the potential ending result of none or not enough retirement savings.