The Only Two Metrics I Use to Track My Finances
My financial tracking system focuses on two metrics only: Net Worth and Savings Ratio (savings as a percentage of net income).
I’ve tried tracking expenses by category, setting budgets, and being mindful of my spending. But in the end, the only two things I care about are:
- Saving at least 33% of my net income
- Seeing my net worth grow year over year
Why Net Worth?
Net worth is just a snapshot. It depends heavily on how your investments perform.
That’s why I regularly capture all my account balances and investment positions on a specific day. Sometimes I do this weekly, sometimes monthly. This practice helps me:
- Visualize how much of my net worth is risk-exposed vs. held in cash
- Monitor whether I’m making consistent progress
I don’t expect a perfect upward trend—but the data gives me answers. It shows where I stand and how I’m trending over time.
Why Savings Ratio?
My savings ratio is simple:
It’s how much of my monthly net income ends up in savings or a brokerage account.
I calculate it based on payslips and exclude any other income streams to keep it consistent and realistic. My goal is clear: maintain a 33% annual savings ratio.
This metric gives me a clear performance benchmark. No matter how my salary, taxes, or expenses fluctuate, I want at least a third of my working time to fund my future—whether that’s retirement or financial independence.
Why I Don’t Track Every Expense
I get why some people track every category of spending. That level of detail can help—especially if you're bleeding money and need to find the root cause.
But in normal times, I believe simplicity wins.
Two metrics. Clear goals. Consistent progress. That’s all I need.