These 13 Numbers Are the Keys to Understanding Your Finances
Understanding a few basic numbers can give you a good picture of your financial health and help you plan your future. You may have seen these terms mentioned in personal finance articles and in the news. Learn what these numbers mean and how to use them to improve your money situation.
1. Net Worth
Net worth is the most important measure of your overall financial health. The calculation of net worth is simple — in short, subtract everything you owe from everything you have:
Net Worth = Total Assets - Total Liabilities
Assets include all property you own (including cars, a home, etc.), savings, investments, and the money in your checking account.
