The financial landscape is always evolving—market swings, economic cycles, and global events can create uncertainty, making it hard to feel secure in your financial footing. But while external factors may be beyond your control, your personal financial health is something you can manage. By regularly tracking a few key financial metrics, you gain a clear understanding of where you stand and what adjustments you need to make.
Think of these metrics as your financial GPS, helping you stay on course even when the world around you shifts. With routine check-ins, you’ll be better equipped to make smart decisions about spending, saving, and investing— giving you greater control over your financial future and the confidence to navigate whatever comes next.
#1: Net Worth
Think of net worth as your financial health scorecard, providing a clear snapshot of where you stand. It reveals whether your financial habits are building wealth or holding you back, helping you gauge progress toward financial independence and long-term goals.
To calculate it, subtract your total liabilities (debts) from your total assets. Assets typically include cash, investments, real estate, and retirement accounts, while liabilities encompass mortgages, student loans, credit card balances, and auto loans.
If your net worth isn’t where you want it to be, there are strategic steps you can take to improve it. For example:
- Tackle high-interest debt, like credit cards and personal loans, to reduce financial strain and free up more cash for savings and investments.
- Look for ways to cut unnecessary expenses and boost your savings rate.
- Maximize your income by channeling more money into investments that align with your financial goals and risk tolerance.
- Consider diversifying your income streams through side hustles, passive income opportunities, or career advancements to accelerate your financial growth.
With consistent, intentional financial decisions, you can steadily increase your net worth and build a stronger, more resilient financial future.
#2: Credit Score
Typically ranging from 300 to 850, your credit score is a key indicator of financial health that reflects your creditworthiness. You can check your score through free credit monitoring services, credit card issuers, and the annual free reports provided by the three major credit bureaus: Equifax, Experian, and TransUnion.
A strong credit score opens doors to better financial opportunities. For instance, lenders use it to determine loan eligibility and interest rates, with higher scores leading to lower borrowing costs—potentially saving you thousands on mortgages, auto loans, and credit cards. Beyond lending, landlords, insurance companies, and even some employers review credit scores when making decisions.
According to Equifax, a credit score above 740 is generally considered very good, while anything above 800 is considered excellent. To boost your score, focus on key factors that influence it:
- Always pay bills on time (payment history makes up about 35% of your score).
- Keep your credit utilization ratio low by maintaining balances well below your credit limits.
- Be mindful of opening multiple new accounts at once, as too many hard inquiries can lower your score.
- Strive to maintain a diverse mix of credit types, such as credit cards, installment loans, and mortgages.
Remember to regularly review your credit report for errors and dispute any inaccuracies to ensure your score reflects your true credit standing. Maintaining a strong credit score not only saves you money on interest but can also enhance your financial flexibility, making it easier to achieve your long-term financial goals.
#3: Debt-to-Income Ratio (DTI)
Your debt-to-income ratio (DTI) measures the percentage of your monthly gross income that goes toward paying debts. A high DTI can signal financial strain, limiting your ability to save for emergencies, invest, or secure favorable loan terms.
To calculate it, divide your total monthly debt payments by your gross monthly income and multiply by 100. For example, if you earn $5,000 per month and your total debt payments amount to $1,500, your DTI is 30%.
Lenders typically favor ratios below 36%, with housing costs not exceeding 28% of your income. Because lenders use this metric to assess loan approvals and interest rates, keeping your DTI in check can improve your overall financial flexibility.
To lower your DTI, focus on increasing your income through career advancements, side hustles, or passive income streams while strategically reducing debt. You may also want to consider refinancing existing loans to secure lower interest rates and reduce your monthly payments. By maintaining a healthy DTI, you can enhance your financial stability, improve your creditworthiness, and create more opportunities for long-term financial success.
#4: Emergency Fund
Your emergency fund is a financial safety net designed to cover unexpected expenses or income disruptions. Experts typically recommend saving three to six months’ worth of essential living expenses, though your target should reflect your personal circumstances.
This fund acts as a critical buffer against life’s inevitable surprises—medical emergencies, car repairs, home maintenance, or sudden job loss. Having emergency savings can help you avoid derailing long-term financial goals or relying on high-interest debt to get through tough times. Moreover, it provides peace of mind, allowing you to make thoughtful financial decisions without the stress of an immediate crisis.
To build your emergency fund, start with a manageable goal—such as saving $1,000—before working toward your full target. Consider automating transfers to a high-yield savings account with every paycheck to make saving effortless.
If necessary, temporarily scale back contributions to non-essential financial goals until you’ve built this essential cushion. And remember, consistency is key—every contribution boosts your financial health, preparing you for whatever life throws your way.
#5: Retirement Savings
Retirement savings are funds set aside to support your lifestyle after you stop working. These typically include employer-sponsored accounts like 401(k)s and 403(b)s, as well as individual retirement accounts (IRAs) and self-employed options such as SEP-IRAs and Solo 401(k)s.
Financial experts generally recommend saving 15–20% of your gross income for retirement, adjusting your contributions based on your age, income, and long-term goals. However, starting early is key. The power of compound interest means that even small contributions early in your career can far exceed larger contributions made later in life, simply due to longer growth periods.
If you’re behind on retirement savings, take immediate action to close the gap. Try to max out contributions to tax-advantaged accounts whenever possible, and always take full advantage of employer matching contributions, which is essentially free money.
If you’re 50 or older, use catch-up contributions to accelerate savings. Finally, consider delaying retirement to extend your earning years and reduce the number of years your savings must support you.
#6: Financial Stress Level
Money is one of the most common sources of stress, impacting both mental and physical well-being. In fact, 73% of Americans rank their finances as their number-one stressor, according to a recent CreditWise survey.
Financial anxiety can manifest in various ways—sleepless nights, strained relationships, reduced productivity, and even physical symptoms like headaches or digestive issues. Regardless of your income or net worth, your emotional relationship with money is a crucial indicator of your overall financial well-being.
Chronic financial stress often points to deeper issues that need attention, such as overspending, lack of savings, or uncertainty about the future. Left unchecked, it can lead to impulsive financial decisions, creating a vicious cycle that further erodes stability.
To reduce financial stress, set clear goals, schedule regular check-ins with your finances, and celebrate small wins. Expanding your financial knowledge through books, podcasts, or workshops can also build confidence and empower better decision-making.
If financial uncertainty is overwhelming, consider working with a financial advisor to develop a clear, personalized plan. Remember, financial health is a journey, not a destination—small, consistent improvements compound over time, leading to lasting financial peace and stability.
TrueNorth Wealth Is Here to Help
Though not an exhaustive list, these six key metrics offer a solid foundation for evaluating your financial health in 2025. By regularly monitoring these indicators, you can make informed decisions, adapt to changing circumstances, and stay on course toward your long-term financial goals—regardless of external uncertainties.
At TrueNorth Wealth, our team of fiduciary CFP® professionals specializes in crafting personalized strategies tailored to your unique financial situation. We’ll help uncover potential blind spots in your financial plan, provide proactive guidance during volatile economic periods, and empower you to navigate complex financial decisions with confidence.
TrueNorth Wealth is among the top Wealth Management firms in Utah and Idaho, with offices in Salt Lake City, Logan, St. George, and Boise. At TrueNorth Wealth, we focus on helping our clients build long-term wealth while maximizing the enjoyment they receive from their money. We do this by pairing our clients with a dedicated CFP® professional backed by an incredible team.
For our team at TrueNorth, it’s about so much more than money. It’s about serving families all across Utah and helping them achieve freedom and flexibility in their lives. To learn more or schedule a no-cost consultation, visit our website at TrueNorth Wealth or call (801) 316-1875.
