3441: 3 Numbers That Matter More Than Your Credit Score by Kelley Long of Financial Finesse on Smart Finances

This is Optimal Finance Daily. Three numbers that matter more than your credit score by Kelly Long with financialfinesse.com. While knowing your credit score and the elements that impact it is important to your overall financial well-being, I sometimes find that people are overly concerned about it at the peril of other more important financial measurements. Your credit score only really matters when you're applying for a loan, certain types of insurance, and increasingly, when applying for a job. If none of those things are on your horizon, then your score is more like your high school ACT scores, perhaps a point of pride, but really irrelevant for the time being. Here are three more important numbers you should be focused on instead. Net worth. What is it? Assets, bank accounts, investments, home, car, basically cash or anything you could turn into cash, minus liabilities, credit card balances, car loans, student loans, mortgages, four zero one k loans, anything you owe. Ideal number, as high as possible. Why it matters. Your net worth is the ultimate measure of your ability to weather financial storms and maintain financial choices in life. The higher your net worth, the more financial freedom you can afford. There are countless cases of people who were millionaires on the asset side but broke on the net worth side as cautionary tales of neglecting this important number. Many of these people suffered during the last recession when their debts were called. How to track it. I calculate my net worth on a monthly basis using Google Sheets at the same time I sit down to set up any bill payments for the month. One nice side effect of this is the fact that I'm checking on all of my accounts at least once a month, so I can also do a quick check for anything fishy. Worth noting. I pay all my credit cards off each month, but I include them on this sheet because that's money I still owe that's reflected in my checking account. It's the only way to have a truly clear picture of what I have. I keep things like my student loan and Mini Cooper loan on there, both for historical accuracy as well as for the psychological thrill of seeing a big fat zero under old debts. It's a little yay me, look how far you've come moment each month. Retirement readiness. What is it? The best way to measure whether you're saving enough to retire comfortably when you want to, especially if you have many years to go until retirement. Ideal number. On track to replace about 80% of your current income unless you're within five years of retirement, when you can be more specific about how much you'll need each year. Why it matters. Retirement, which really just means transitioning to living off your savings one day, is one financial goal that pretty much all of us share. Whenever anyone asks me what to do with extra money or …