3 Financial Metrics You Need to Track Every Month

Here's how to put your monthly budget into context.

Author

Michela Allocca
February 13, 2025

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MONEY SECTION
3 Financial Metrics You Should Track Every Month

Tracking my financial data over the last few years has given me incredible insight into how I am using my money to create the life I want.

Not only does having this information readily available make it a lot easier to make data-driven financial decisions, but it's also been a really motivating practice to actually see my money grow.

The best motivation is proof, and I can look back at my prior PFDs and see not only how much money I've put towards 💸 savings (funding my emergency fund) 💸 investments (maxing out retirement accounts) 💸 debt-payoff (yay for paying off student loans!)

… but also my net worth growth rate, what percentage of my income I am spending and saving, and other financial metrics that put my raw numbers into context.

I often talk about how important financial routines are for the sake of getting those numbers aggregated in one place, but once you have those numbers, what are you supposed to do with them?

That's where financial metrics come into play, because they put your raw numbers into the CONTEXT of your broader financial circumstance.

The financial analyst in me is giddy today because we're going to be covering some (personal) financial ratios, how to calculate them, and what they mean!

Here's a quick summary: 👉🏻 Net Worth Growth 👉🏻 Save Rate 👉🏻 Expense Rate

Obviously, you can easily get these numbers if you use The Personal Finance Dashboard (they are calculated for you based on your inputs) which you can get HERE and use the code EMAILLIST27 for $10 off!

Let’s get into it!

1️⃣  Metric #1: Net Worth Growth Rate

Net worth is my favorite measure of financial health, because it allows you to examine your financial situation beyond just your salary and expenses (which are often deemed as “the” metric for financial success).

Net worth is calculated by taking your total assets and subtracting your total liabilities. (total assets - total liabilities = net worth)

Ideally, your net worth will be positive, but for many - especially in your twenties - is may be negative due to student loans or other forms of debt that you are working to reduce.

The thing is, I don't really care if your net worth is negative; I care if your net worth is growing month-to-month and year-over-year.

👉🏻 You can calculate your monthly net worth growth rate with the following formula: (Current Month NW - Previous Month NW)/ Previous Month NW

So if your net worth is $50K in April, and was $45K in March, the math would be: (50k-45k)/40k = 11% net worth growth

2️⃣ Metric #2: Save Rate 

Your save rate is the percentage of your income that you are putting towards savings.

This rate can also be translated into your invest rate and/or your debt-payoff rate depending on your current financial goals, but for the sake of this example I am going to just use cash savings!

Save rate is an essential metric to track because there is a myth that high-earners are automatically more financially successful than people who make less and simply could not be less true.

It doesn't matter how much money you make - it matters how much you keep!

A good gauge for a healthy save rate (or invest rate, or debt-payoff rate.. or all of these combined which you could just call “a financial goal rate”) would be 10% or higher.

Anything lower than 10% either combined or towards one of these 3 goal types would prompt me to ask a few questions: 👉🏻 Do you need to reduce your expenses? 👉🏻 Do you have an income issue and need to start making more money?

You can calculate your save rate by taking the total amount of money you put towards savings and divide it by your total net income for the month.

So if you earned $4,000 in April, and you saved $500, your save rate would be: ($500/$4,000) = 12.5%

3️⃣ Metric #3: Expense Rate

Expense rate is similar to your save rate in the sense that it's giving you insight into how much of your earned income is going towards expenses.

Ideally, as you start to increase your income and earn more, you'd be able to keep your expense rate either the same or lower. It's a great metric to track to ensure you are not falling victim to lifestyle creep.

If we were to follow the 50/30/20 budgeting rule, your expense rate would be around 70-80%.

Based on the current economic situation, a 70-80% rate is pretty common and a goal would be to: 👉🏻 Get lower than this by increasing your income and holding your expenses steady 👉🏻 Hold steady at this rate and not increase your expenses unnecessarily

You calculate your expense rate by taking your total monthly expenses and dividing them by your monthly net income.

So if your monthly net income was $4,000, and your expenses were $3,000, the math would look like: $3,000/$4,000 = 75% expense rate

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xoxo,

Michela