Financial Ministry

The Main Five

The main five numbers you need to know are:

  1. Monthly Income
  2. Monthly Expenses
  3. Net Worth
  4. Debt- to-Income Ration
  5. Invested income

When you know these numbers, you know money. Many people go to work each day and don’t have a clue as to what they earn month;y. Do you know your gross monthly income and your net monthly income amounts? These two are very easy to find. Take out your last pay stub and look at the amount shown before payroll taxes. This is your gross income or pre-tax income. If you are paid bi-weekly or semi-monthly, you will need to multiply this figure by two to get your gross monthly income.

Net Monthly Income To find your net monthly income, look at the amount after payroll taxes have been deducted. Again, if you are paid bi-weekly or semi-monthly, you will need to multiply this figure by two to get your net monthly income.  If you have any other deductions from your gross monthly income for which you are obligated, such as alimony, garnishments, medical insurance, etc., you need to take the income after these deductions to arrive at your net monthly income since these items are something that you are required to pay.

Monthly Expenses – The best way to calculate your monthly expenses is to track your monthly expenses using your Money Blueprint Notebook. If you know how much money you spend each month, you have a clearer picture of your spending. Tracking your expenses shows you if you are overspending. It is easier to enter your expenses onto your Money Blueprint when you have tracked your expenses. You can adjust your spending as needed.

Net Worth – Whether your a billionaire, millionaire, or a “zeronaire”, everyone has a net worth (NW). Net worth is basically the difference between what you own and what you owe. To calculate your NW, you add up all of your assets, homes, cars, cash, savings, investments, etc. Then, you add up what you owe (liabilities), mortgage, car loans, HELOCs, other loans, etc. Then, you subtract the liabilities from your assets. If your net figure is positive, you have a positive net worth. On the other hand, if your net figure is negative, you have a negative net worth.

Debt-to-Income Ratio – The  debt-to-income ratio shows you how much debt you have compared to how much money you’re making. Your first step to figuring this out is to pull up your credit report. To obtain the most accurate estimate order it from all three bureaus. This ensures that there is a debt that is only reported to one and not the others. This way, you don’t leave anything off. Review the report to ensure there are no errors in how your debts are reported. You may obtain your free credit report once a year from Annual Credit Report. Next, add up all your monthly debt payments, and divide them by your gross monthly income. The lower this ratio, the better off you’ll be. Optimally, you want to keep the ratio below 35%.

Invested Income – Your investment income is any money you have in an emergency fund, a savings account, Money Market Account, IRA, ROTH IRA, mutual funds, 401K, 403B, stocks, bonds, etc. Make sure you start investing even it’s your first job. The younger you are when you start investing, the more time you’ll earn interest on your money. If you have investments, you want to be sure you know where the money is invested. How much are you paying in fees? You also need to know who manages it, your earnings, and what is your return-on-investment (ROI). You have more freedom the younger you are. Make that “young money” work hard  for you, so you can earn the most possible future money.

Evaluate your money goals. They should be in line with your future goals. Make sure you know what those goals are and the compatibility with your money. Don’t just save money. This alone is not enough when it comes to having good financial health. Pay attention to the amount of your savings, know for what you are saving, and if you’re on track for the big things.

Learn about your money. Don’t let it overwhelm you. Start learning all the terms and numbers. This will keep you from getting discouraged. Take the time get to know your money and how it impacts your life. You’ll find it’ll be easy to see that financial health comes down to being in the know.


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