12 Financial Metrics Worth Tracking

Tracking financial metrics helps you understand where you stand and what needs attention. These are your twelve key numbers, covering what you own, what you owe, and how your money moves each month.

Two Types of Financial Metrics

Portfolio Metrics focus on what you own and owe. They show your overall financial strength.

Budget Metrics focus on money flowing in and out. They show how well you manage cash.

Portfolio Metrics: Your Financial Strength

1. Net Worth

What it is: Everything you own minus everything you owe.

What's included:

• All your accounts (savings, investments, pensions)
• All your assets (home, car, valuables)
• Minus all your debts (loans, credit cards, mortgages)

Example:

Sarah's Net Worth:
Owns: £365,000 (accounts + home + car)
Owes: £215,000 (mortgage + car loan)
Net Worth: £150,000

Healthy progress: Should generally increase over time.

2. Liquid Net Worth

What it is: Only counting money you can access quickly.

What's included:

• Cash and savings accounts
• Accessible investments
• NOT property (can't sell quickly)
• NOT locked pensions
• Minus all debts

Why it matters: Shows if you could handle emergencies without selling your home.

Healthy range: At least 3-6 months of expenses.

3. Credit Utilisation

What it is: How much of your available credit you're using.

Example:

Credit Card A: Using £500 of £2,000 limit (25%)
Credit Card B: Using £1,000 of £5,000 limit (20%)
Total: Using £1,500 of £7,000 (21%)

Benchmarks:

• Under 30%: Typically viewed favourably by lenders
• 30-50%: May impact borrowing capacity
• Over 50%: Often considered high by lenders

Why it matters: Lenders often view high credit utilisation as an indicator of financial stress. Lower utilisation is generally associated with better lending terms.

4. Debt to Asset Ratio

What it is: The proportion of your total assets that are financed by debt. It gives a broader picture of leverage than credit utilisation alone by including all debts and all assets.

How it's calculated:

Total debts: £220,000 (mortgage + loans + credit cards)
Total assets: £400,000 (home + savings + investments)
Debt to Asset Ratio: 55%

Benchmarks:

• Under 50%: Generally healthy, meaning you own more than you owe
• 50-75%: Moderate leverage, common for homeowners with a mortgage
• Over 75%: High leverage, where most of your wealth is debt-funded

Why it matters: A falling ratio over time means you're building real equity. A rising ratio could signal you're taking on debt faster than building assets.

5. FI Progress

What it is: How far along you are toward financial independence, expressed as a percentage of your FI target.

How it's calculated:

FI target (annual expenses x 25): £1,000,000
Current investments toward FI: £250,000
FI Progress: 25%

Why it matters: Tracks your long-term trajectory. Even small changes in FI progress show the compounding effect of consistent saving and investing. Read more in our guide to financial independence.

6. Loan to Value

What it is: The ratio of your outstanding mortgage to the value of the property it's secured against.

Example:

Property value: £300,000
Outstanding mortgage: £210,000
Loan to Value: 70%

Benchmarks:

• Under 60%: Strong equity position, access to best mortgage rates
• 60-80%: Solid position, good rate options
• 80-90%: Limited rate options, may require mortgage insurance
• Over 90%: High leverage, vulnerable to price drops

Why it matters: LTV affects the mortgage rates available to you and how exposed you are to property market downturns. A lower LTV means better rates and more equity.

Budget Metrics: Your Financial Fitness

7. Savings Rate

What it is: Percentage of income you save. It's often considered the single most important factor in building wealth over time.

How it's calculated:

Monthly income: £4,000
Monthly savings: £800
Savings rate: 20%

Benchmarks:

• Under 10%: Below typical savings targets
• 10-20%: Common savings range
• Over 20%: Strong savings pattern

Target: Financial experts often recommend saving at least 20% of income.

8. Debt to Income Ratio

What it is: How much of your income goes to debt payments. It's a key indicator of financial health and affects your ability to borrow.

What's included:

• Minimum credit card payments
• Loan payments
• Mortgage payments

Most lenders use this ratio when evaluating borrowing capacity.

Benchmarks:

• Under 28%: Generally considered manageable
• 28-36%: May affect borrowing capacity
• Over 36%: Typically indicates high debt burden

Target: Industry standard recommends staying below 28%.

9. Financial Runway

What it is: How long you could survive without income. It shows how long you could maintain your current lifestyle using only your liquid savings.

How it's calculated:

Liquid savings: £15,000
Monthly expenses: £3,000
Runway: 5 months

Targets:

• 0-3 months: Critical zone, rebuild emergency fund
• 3-6 months: Common minimum target
• 6+ months: Frequently recommended target

Target: Financial advisors typically recommend at least 6 months of expenses.

10. Cash Flow

What it is: The difference between your total income and total expenses each month. Positive cash flow means you're bringing in more than you spend.

How it's calculated:

Monthly income: £4,000
Monthly expenses: £3,200
Cash Flow: +£800

Why it matters: Cash flow is the engine behind every other metric. Positive cash flow funds your savings, pays down debt, and builds your runway. Negative cash flow erodes your position no matter how strong your other metrics look.

Healthy target: Consistently positive. If your cash flow is negative, that's the first thing to fix.

11. Rate Optimisation

What it is: Tracks the health of any promotional interest rates on your debts, such as 0% balance transfer deals or introductory mortgage rates.

Why it matters: Promotional rates save money, but they expire. This metric helps you stay ahead of expiry dates so you can plan balance transfers, make extra payments, or refinance before standard rates kick in. Losing track of a promotional expiry can mean a sudden jump in interest costs.

12. Needs/Wants/Savings Breakdown

What it is: Where your money actually goes each month.

The 50/30/20 Rule:

• 50% Needs: Housing, food, utilities, insurance
• 30% Wants: Entertainment, hobbies, dining out
• 20% Savings: Emergency fund, investments, debt payoff

Your breakdown shows:

• Whether your spending patterns align with the 50/30/20 guideline
• Whether essential expenses take up more than the typical 50%
• How your actual savings rate compares to common benchmarks

Using Metrics Effectively

Check Monthly

Set a monthly review to check your metrics.

Look for Trends

One month doesn't matter - watch the direction over time.

Set Targets

Use metrics to set goals based on the benchmarks:

• "Increase savings rate to 20%"
• "Reduce credit utilisation below 30%"
• "Build 6-month runway"

Take Action

Each metric suggests actions:

• Low savings rate? Review budget for cuts
• High credit use? Pay down cards
• Low runway? Build emergency fund

Red Flags to Watch For

Declining net worth. You're going backwards.

Negative cash flow. Spending more than earning.

Credit use over 50%. Debt getting dangerous.

No financial runway. One problem = crisis.

Debt payments over 40% of income. Too leveraged.

Putting It All Together

Perfect metrics aren't the goal. Improvement is. Whether you're starting with negative net worth or already financially strong, what matters is moving in the right direction.

Quick Health Check

Rate yourself on each:

• Net worth growing
• Saving at least 20%
• Credit use under 30%
• 6+ months runway
• Debt-to-income under 28%

Score:

• 5/5: Strong position
• 3-4/5: Good, keep improving
• 1-2/5: Time for changes
• 0/5: Start with one and build from there

Next Steps

1. Calculate each metric - Know where you stand today
2. Understand your income - Break down your gross to net pay to know your real spending power
3. Pick one metric to improve - Focus beats perfection
4. Set a metric-based goal - Learn how to set goals that work
5. Check progress monthly - Build the habit
6. Celebrate improvements - Every step counts

Use these metrics as your guide to making informed decisions and building a stronger financial position over time.