Tracking Your Financial Health¶

Just like monitoring your physical health, tracking financial metrics helps you understand where you stand and what needs attention. Doughsense automatically calculates key financial indicators to give you a clear picture of your financial wellness.

Understanding Financial Metrics¶

Think of metrics as your financial vital signs. Just as a doctor checks your blood pressure and heart rate, Doughsense monitors indicators like net worth, savings rate, and debt ratios.

Two Types of Metrics¶

Portfolio Metrics 💰

Focus on what you own and owe
Show your overall financial strength
Like checking your weight and muscle mass

Budget Metrics 📊

Focus on money flowing in and out
Show how well you manage cash
Like tracking your diet and exercise

Portfolio Metrics: Your Financial Strength¶

Net Worth - Your Financial Snapshot¶

What it is: Everything you own minus everything you owe

Think of it like: Your financial report card showing overall progress

What's included:

✅ All your accounts (savings, investments, pensions)
✅ All your assets (home, car, valuables)
➖ 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

Liquid Net Worth - Your Financial Flexibility¶

What it is: Only counting money you can access quickly

Think of it like: Your financial emergency readiness

What's included:

✅ Cash and savings accounts
✅ Accessible investments
❌ Property (can't sell quickly)
❌ Locked pensions
➖ All debts

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

Healthy range: At least 3-6 months of expenses

Credit Utilisation - Your Credit Health¶

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

Think of it like: How full your credit "tank" is

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%)

Healthy ranges:

🟢 Under 30%: Excellent
🟡 30-50%: Okay, but watch it
🔴 Over 50%: Needs attention

Why it matters: Affects your credit score and borrowing ability

Debt to Asset Ratio - Your Leverage Level¶

What it is: How much you owe compared to what you own

Think of it like: How much of your stuff is actually paid for

Example:

Mike's Leverage:
Total Assets: £400,000
Total Debts: £300,000
Ratio: 75% (quite high!)

Healthy ranges:

🟢 0-30%: Conservative, low risk
🟡 30-50%: Moderate, typical
🟠 50-80%: High, be careful
🔴 Over 80%: Very risky

Loan to Value - Your Property Position¶

What it is: How much you owe on assets compared to their value

Think of it like: How much of your home you actually own

Especially important for:

Mortgages on property
Car loans
Any secured debt

Example:

Home value: £300,000
Mortgage remaining: £180,000
LTV: 60% (you own 40%)

Why it matters: Affects refinancing options and financial flexibility

Budget Metrics: Your Financial Fitness¶

Budget Balance - Your Monthly Bottom Line¶

What it is: Income minus expenses each month

Think of it like: Are you gaining or losing financial weight?

What to look for:

🟢 Positive: You've got options
🟡 Near zero: Living paycheck to paycheck
🔴 Negative: Going into debt

Healthy target: Save at least 10-20% of income

Savings Rate - Your Financial Discipline¶

What it is: Percentage of income you save

Think of it like: Your financial fitness level

How it's calculated:

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

Benchmarks:

🔴 Under 5%: Need to improve
🟡 5-10%: Getting started
🟢 10-20%: Good progress
💚 Over 20%: Excellent!

Debt to Income Ratio - Your Debt Burden¶

What it is: How much of your income goes to debt payments

Think of it like: How heavy your debt backpack is

What's included:

Minimum credit card payments
Loan payments
Mortgage payments

Healthy ranges:

🟢 Under 30%: Manageable
🟡 30-40%: Getting heavy
🔴 Over 40%: Too high

Financial Runway - Your Safety Buffer¶

What it is: How long you could survive without income

Think of it like: Your financial fuel tank

Example:

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

Targets:

🟡 Minimum: 3 months
🟢 Better: 6 months
💚 Ideal: 12 months

Needs/Wants/Savings Breakdown¶

What it is: Where your money actually goes

The 50/30/20 Rule:

50% Needs (housing, food, utilities)
30% Wants (entertainment, hobbies)
20% Savings and debt payoff

Your breakdown shows:

If you're overspending on wants
If needs are too high
If you're saving enough

Using Metrics Effectively¶

Check Monthly¶

Set a monthly "financial checkup" to review your metrics, just like weighing yourself regularly.

Look for Trends¶

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

Set Targets¶

Use metrics to set goals:

"Increase savings rate to 15%"
"Reduce credit utilisation below 20%"
"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 budget balance

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

Your Financial Health Journey¶

Remember: 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:

Score:

5/5: Excellent health!
3-4/5: Good, keep improving
1-2/5: Time for changes
0/5: Don't panic - start with one

Next Steps¶

Review your Dashboard - See all metrics at a glance
Pick one metric to improve - Focus beats perfection
Set a metric-based goal - Use Plans to track
Check progress monthly - Build the habit
Celebrate improvements - Every step counts

Your financial health is a journey, not a destination. Use these metrics as your guide to making informed decisions and building a stronger financial future.

Remember: These metrics work together. Improving one often helps others. Start where you are, and keep moving forward!