The 11 Financial Measurements That Actually Matter

What Are The 11 Financial Vitals And Why Do They Matter?

What if understanding your financial health was as straightforward as checking your pulse? In this eye-opening episode, certified financial planner Jason Taylor breaks down the concept of "financial vital signs" – eleven key measurements that reveal the true state of your monetary wellbeing.

Jason introduces us to the "Core Four" measurements that form the foundation of financial assessment: your effective tax rate (which most people don't actually know), insurance coverage adequacy (which changes year by year), burn rate (how much you spend compared to what you earn), and savings rate (how much you're setting aside for the future). These fundamental indicators provide immediate insight into your financial situation and serve as starting points for meaningful improvement.

Rather than overwhelming listeners with the need to perfect all eleven measurements simultaneously, Jason advocates for a more sustainable approach: focusing on making small, incremental improvements to one or two vital signs at a time. This methodology lies at the heart of the MyPocketFP app, which presents these complex financial indicators in a simple, color-coded format that anyone can understand at a glance. The goal isn't perfection but progress – moving your savings rate from 0% to 1%, then 2%, and beyond, creating momentum that builds toward financial freedom.

Particularly interesting is Jason's insight that insurance coverage tends to be the most overlooked vital sign, with many people selecting the lowest-cost option without regular reassessment. By shopping insurance rates annually, significant savings can often be found – illustrating how attention to often-ignored details can yield substantial financial benefits. Whether you're just starting your financial journey or looking to optimize an already solid foundation, these eleven vital signs provide a roadmap to monetary health that's actually manageable. Download the MyPocketFP app today and transform how you track, understand, and improve your financial wellbeing.

To learn more about MyPocketFP visit:
https://www.MyPocketFP.com
MyPocketFP

Episode Transcript

Speaker 1 (00:04):
Welcome to my Pocket FP, the podcast where your
wallet finally meets itsfinancial planner and they
actually get along.
Join your host, jason Taylor,certified financial planner,
money mentor and your guide tofinancial freedom.
Whether you're planning forretirement or just trying to

(00:24):
figure out where all your moneywent last weekend, we've got you
covered.
Get ready to take control ofyour financial life with smart
tips, surprising insights andyes, an app that fits right in
your pocket.
This is my Pocket FP, becauseyour future deserves more than
guesswork.

Speaker 2 (00:57):
Just like your body has vital signs, your finances
do, too.
Jason walks us through the 11financial vitals that every
person should monitor and whyignoring them could cost you
more than just money.
Welcome back.
I'm Millie M, co-host andproducer back in the studio with
Jason Taylor, certifiedfinancial planner and creator of
MyPocketFP.
How are you, jason?

Speaker 3 (01:12):
Doing well.
Thank you, Millie.

Speaker 2 (01:15):
Good, good, I've got my financial stethoscope ready.
Let's check the pulse on whatreally matters in our money
lives.
What are the 11 financialvitals and why do they matter?

Speaker 3 (01:27):
Perfect.
Well, you know, when I wasputting this together, I was
looking at a lot of differentapps in order to really reach
out to people and help themmeasure it and it's easy to read
, and it's not like you said, abunch of spreadsheets and charts
, it's just simple measurementsthat you can make a little
better every month to get towhere you want to go.
Measurements that you can make alittle better every month to
get to where you want to go.
Each person we start at adifferent place, I find.

(01:49):
Depending on what level they'reat, we start at a different
element.
Most recently I've been workingon people's tax rates, because
you can make a big change justlooking at what their effective
tax rate is.
One thing is we help themrealize what their actual tax
rate is.
Most people thing is we helpthem realize what their actual
tax rate is.
Most people do not know.
So that's one of the steps wetake, for a lot of our clients

(02:11):
is to find out what their taxrate is.
Another thing you're juststarting out is insurance rate
To know if you have enoughinsurance coverage for house,
car, life insurance, to makesure that you have the right
amount of coverage for yourpersonal situation, and that
does change year by year.
So both those are reallyimportant and it relates to most

(02:33):
people, even if they haven'tstarted saving in retirement or
other things and we talked aboutbudgets in a prior episode.
Most people don't like that, soa big part of it is looking at.
We need to know what your burnrate is, and burn rate is how
much you spend in compared tohow much you make.

(02:54):
So it's a good measurement tohave in front of you.
So if that is 100%, we knowthere's a problem and something
to look into with the client.
On the same note along thebudget is the savings rate,
which measures how much you savecompared to how much you make.
And once again, at that, 0%, wewant to have that be 1% and

(03:19):
then 2%, and just makeincremental changes to where it
doesn't hurt as much.

Speaker 2 (03:25):
Right.

Speaker 3 (03:28):
So those are the main ones we start out with most
people.

Speaker 2 (03:32):
Gotcha, and so there's 11 total.
Starting with those few, do yousee changes in the other?
You know what I'm saying Is it?
Once you start with those,you'll see some changes in the
others as well.

Speaker 3 (03:47):
Yeah, definitely the total term because that's
measures, all of them together.
So it has an effect on that.
The other ones it has a minimaleffect on actually liquid term.
It would affect as well.
Just overall you know how longyour savings will last.
The higher savings are, thebetter that will be.
There's the real estate.

(04:08):
It doesn't affect that as muchunless you start buying real
estate down the road and thebusiness measurement as well
isn't affected as much, but itdoes.

Speaker 2 (04:23):
Those core four do make a significant difference on
a lot of it.
Those are the core four.
Love that.
So if someone has, let's say, aburn rate of a hundred percent
and savings of zero percent, atthat point, guide them through
negotiating down some of theirspending or coming up with ways
to increase their income, or doyou leave that up to them?

Speaker 3 (04:42):
You know, I can make strong suggestions and give them
ideas on how to save money, butin all reality it's up to the
client, it's up to the personwhose money it is.

Speaker 2 (04:55):
So which of the 11 vital signs do people overlook
the most?

Speaker 3 (05:01):
Which one is overlooked?
Yes, I would probably say theinsurance one.
Most people go for the lowestrate.
You know they don't look at itannually, even every five years.
They just let it go.
And it's amazing, if you shopit around every year, how much
you could save.

Speaker 2 (05:20):
You know what that's true.
If you just continue to checkon those rates, you can find
some savings.
So how does MyPocketFP helpusers stay on top of these
vitals without, like I said lasttime, getting that feeling of
overwhelm?
Well it's all on a one page.

Speaker 3 (05:38):
They're colorful and you can focus on a lot of times.
We'll just focus on one for acouple of months until it starts
improving and then we'll shiftto another one.
So we don't look at all of themat once.
We'll focus on just one or twoat a time.

Speaker 2 (05:57):
A person like me would definitely appreciate that
, and I'm sure your clients areglad that they have you walking
them through that process,because there's a lot of people
who don't even feel confident inlike math in school, and so I
think that correlates to why alot of people shy away from
their finances but, love that mypocket FB is making it easy and

(06:20):
fun for all.

Speaker 3 (06:22):
I appreciate you for breaking down those vitals that
help yeah our financial livesand, if you don't mind, I just
kind of show you what it lookslike.
And that's kind of what itlooks like, ah I do love a color
coded system.

Speaker 2 (06:35):
Yes, that helps me for sure, because as soon as
your eye sees a color, yourbrain goes to a certain
association.

Speaker 3 (06:43):
Exactly so.
We'll focus on it.
You know, one color at a time.

Speaker 2 (06:48):
Okay, well, we're going to go ahead and hop off.
I'm going to download the appand we can go through my numbers
together right now.

Speaker 3 (06:55):
Perfect.

Speaker 2 (06:57):
All right, thank you for tuning in.
Catch you on the next episodeof my Pocket FP.

Speaker 1 (07:06):
Thanks for tuning into my Pocket FP, where we
believe small monthly changescan make big positive changes in
your financial endgame.
If you're ready to level upyour money game, head over to
MyPocketFPcom and download theapp today.
Your financial planner is nowofficially pocket-sized and
doesn't charge by the hour Untilnext time.

(07:28):
Keep your goals high, your debtlow and your pockets smart.