April 2009 Financial Ratios
Another great month. The ratios are exactly where we like to see them
YTD% Growth: We are now more than half way of hitting our goal of 50% networth growth for the year and we are only 4 months into the year. Granted a big portion of that is because of the enormous tax return we got, but it is still nice to see such high growth so early in the year. Also, we saw a second straight month of gains in our IRA and brokerage acconts which has been a good change from months past.
Emergency Fund Ratio: A.K.A. Month’s Living Expense Covered Ratio, is still growing steadily. Although we are well above our goal of 6 months we are now shooting for a emergency fund of 12 months. This means we will probably need to increase our emergency fund to about $30,000, but it will be a good security blanket if we are ever faced with a layoff or family emergency. I’ve always felt like the more you’ve got set aside, the less likely something is to happen. Or maybe it just seems that way because what would have been considered an “emergency” is now just a minor setback.
*For an explanation of my ratios and how they are calculated check out my 3 Financial Ratios posts (Liquidity Ratios, Debt Ratios, Saving Ratios).
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