5 Critical Numbers You Need to Know to Succeed Financially

We tend to remember numbers that are important to us.

Everyone knows how much they weigh. If you were so forward as to ask, the person might say that they don’t know or don’t remember, but they know. We remember numbers that are important to us.

Ask someone for their credit score and unless they just applied for a loan, chances are they honestly don’t know. Your credit score is important but it’s not important every day. It’s only important in very specific situations and even then, someone else will tell you what it is!

I argue that your credit score is one of those critical numbers you need to know if you wish to succeed financially. It’s your key to accessing other people’s money. Leverage is how you can borrow time from your future self and your credit score is the key to that time machine.

Today, I want to share with you some financial numbers of yours that you need to know by heart. They’re like your pulse, your blood pressure, and your weight. You don’t need to know the exact number at any moment of the day… but you should know the ballpark range.

By the way, this is different than my post on money ratios, which are guidelines as to how much you should be spending on what, how much in savings you need, and things of that nature. That list prescribes the ratios like X% on rent/mortgage, this post is about broader numbers you should know about your finances so you can make informed decisions.

Table of Contents
  1. Your Savings Rate
  2. Your Net Worth
  3. Your Marginal Tax Rate
    1. Tax Brackets for 2021
  4. Monthly Take Home Pay & Fixed Expenses
  5. Your Credit Score

Your Savings Rate

Your savings rate is how much of your take-home pay you’re saving. This can be saved to a regular old savings account or for your retirement, but it’s a measure of what you are not spending each month.

The Federal Research Bank of St. Louis maintains a Personal Saving Rate figure and it’s routinely in the low single digits (Jan 2018 was 3.2%). It is the percentage of disposable personal income (DPI), which is similar. It takes your income and subtracts “personal outlays” and “personal taxes” to arrive at your savings, which is then calculated as a percentage.

Personal savings, April 2018

Why is this number important? The key to prosperity is to spend less than you earn and then invest that amount so it can work for you. It’s important to know how much you’re saving and to work on increasing it when you can.

If you want to compare your figure with the official PSAVERT, you take your savings and divide it by your total income. Many of the best early retirement bloggers aim for savings rates in the 50%+. More is better.

Your Net Worth

Your net worth is simply a measure of your assets minus your liabilities. Take everything you own, subtract it from all the debt you owe, and you have yourself a nice figure known as your net worth.

The average net worth of Americans is surprisingly low:

Age of HouseholderMedian Net Worth
Under 35 years old:$22,000
35 to 44 years old:$97,740
45 to 54 years old:$166,600
55 to 64 years old:$230,900
65 to 69 years old:$285,100
70 to 74 years old:$326,700
65+ years old:$300,000
75+ years old:$292,800
Source: U.S. Census Bureau, Survey of Income and Program Participation, Survey Year 2021

Why is this number important? It’s like your weight. Your weight is important but it’s not the most important. If you suddenly start losing weight, with no clear cause, that’s a concern even if you’re happier weighing less. The same goes for your net worth.

It’s a valuable measure of progress. If you are trying to gain muscle, you will likely see your weight increase and the amount of weight you lift increases as well. If you’re trying to get leaner, you’ll likely see your weight decrease. There are a million underlying causes but weight, like net worth, is a useful barometer.

But don’t fall in the trap of fixating too much on this number. It can easily become a vanity metric.

Your Marginal Tax Rate

Our taxes can be confusing but one key thing to remember is that we have a progressive system of marginal tax rates. You are not taxed the same percentage on every dollar of income.

You start with the marginal tax brackets for 2018:

Tax Brackets for 2021

Tax BracketSingleMarried Filing JointlyHead of Household
10%$0 – $9,950$0 – $19,900$0 – $14,200
12%$9,950 – $40,525$19,900 – $81,050$14,200 – $54,200
22%$40,525 – $86,375$81,050 – $172,750$54,200 – $86,350
24%$86,375 – $164,925$172,750 – $329,850$86,350 – $164,900
32%$164,925 – $209,425$329,850 – $418,850$164,900 – $209,400
35%$209,425 – $523,600$418,850 – $628,300$209,400 – $523,600
You can just take a look at last year’s taxable income (Line 43 on Form 1040), adjust for any major changes, and refer to the chart to see your tax bracket. That’s usually good enough. If you want to be more precise, read on.

But that’s taxable income – you aren’t taxed on every dollar you make.

You reduce your taxable income by (this is not an exhaustive list, just common ones):

  • Your exemptions for you and dependents – $4,150 per dependent, and you, but there are phaseouts
  • The standard deduction – $12,000 for single, $24,000 for MFJ (or your itemized deductions, if you sum them up)
  • 401(k) and Traditional IRA contributions – up to $18,500 per year for the 401(k)

Take your income, subtract all those, and you have your taxable income.


Why is this number important? When you know your marginal tax rate, you can make smarter tax-related decisions.

If you know you’re in the 25% tax bracket, you save $25 in tax on every $100 you contribute to your 401(k). That $100 will grow tax-free until you start taking disbursements, which will be taxed at your tax rate in retirement. That’s powerful knowledge.

Monthly Take Home Pay & Fixed Expenses

I put these two together even though they’re separate numbers because they’re related.

Your monthly take-home pay is what you get deposited into your account each month. It’s your salary minus all the deductions, taxes, and other withholding (which you can affect by updating your Form W-4). If you’re paid more frequently, just add it all together to get your monthly take home page.

Your fixed expenses are those monthly costs that do not change. Your mortgage or rent, your car payment, your student loan payment, your cable and/or cell phone bills, and other bills of that nature. For those annual or semi-annual bills, like auto insurance, you can divide that larger payment by 12 to get the monthly fixed.

These are all numbers you may have calculated earlier when you did your savings rate.

Why is this number important? Your savings rate is based on your take-home pay and your total monthly spending. Fixed expenses are only those you cannot escape without a significant penalty. It tells you how much wiggle room there is in your budgets.

If you have a monthly take-home pay of $3,000 a month and fixed expenses of $2,500 – that’s not a lot of discretionary income for things like food, entertainment, clothes, etc. You will need to look to reduce some of those fixed expenses (or make extra money) or you could find yourself in trouble if something unexpected happens.

Your Credit Score

Your credit score is that pesky three-digit number that tells prospective lenders how risky you are to default.

The score is calculated based on your credit reports at Experian, Transunion, and Equifax. We recommend reviewing your credit report every single year because there are frequently errors and it can take a long time to fix them. You don’t want to apply for a loan and discover your report had problems.

You can check your score pretty easily and for free. We compiled 13 places you can get your credit score for free. None of them will require a credit card, you don’t sign up for a service that you have to cancel, and no shenanigans.

You don’t need to know your exact credit score but you need to know roughly what it is.

For a FICO score, there are five ranges:

  • Exceptional: 800+
  • Very Good: 740 – 799
  • Good: 670 – 739
  • Fair: 580 – 669
  • Poor: below 579

Why is this number important? Your credit score is used in a lot of places. We all know it’s important for lending decisions, like getting a new credit card, mortgage, or car loan; but it’s also important anytime you have a financial arrangement that involves payments over time. If you get a new phone and agree to a contract, when you start a job, when you rent an apartment, and more.

You want your score as high as possible but if you’re in the higher tiers, don’t stress too much about it.

Those are the five critical numbers you need to know if you want to succeed!

What are yours?

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and farms in Illinois, Louisiana, and California through AcreTrader.

Recently, he's invested in a few pieces of art on Masterworks too.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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  1. DNN says

    It’s ironic that you discussed weight. I’ve been on the treadmill at the gym for the past 2 days doing cardio non-stop. In fact, I changed all my eating habits and focused more on losing weight and improving my other number: SEO traffic rank score. I have a financial goal I’m working toward which is achieving “side hustle millionaire” status in the next 2-3 years. I’m doing more cardiovascular activity, writing more content, building more relationships with great people such as yourself, and retaining a long-term vision where I desire myself and my online business to be in years to come. As each new day arrives, my financial weight is getting a tid bit heavier; certainly a good thing.

  2. Craig McCorkle says


    As always, the information you share with all of us has a masters touch.
    At seventy-two years of age, few things bring me as great a reward, as being
    a student. The most beautiful high, I’ve ever experienced, was learning something
    new that I doubted I would grasp the accomplishment was orgasmic.
    As an instructor, the material you share with us, your many ‘students, has many
    of those qualities, thank you. Your carefully invested time and attention is appreciated. I once had a banker say to me ” Your F I C O is the resume of your
    life, I keep mine, above 780.

    To your good health, peace of mind and continued sharing of your wisdom.

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