Then the next question, how did measure the health condition of cash flow? There are a number of important ratios identified:

1. Expense ratio is an indicator that compares the routine expenditures (social funds, child expenses, household, personal, transportation) with the income per month; describe the efficiency level of cash flow management of a person or household. Person’s financial position or households considered efficient if it has the highest ratio of 55% or less. Therefore, remain disciplined and consistently spend your money on the level of 55% or less. For annual expenses like going home and other expenses use the annually income too.

2. Saving ratio confirms what percentage of income set aside for future use (savings or investments). A person or household considered healthy if it has the highest ratio of 10% or more. This means that 10% had not reached you or your household is still too focused on the consumption of now, not the consumption of future. Change your mindset and how to manage your money now!

3. Debt service ratio is important as an indicator that compares the total annual loan payments with a total annual income. This ratio shows the amount of income in a year needed to pay the total annual debt. Level ratio 35% or less indicates the adequacy of sinking fund. If your ratio 45% means you spend 45% of your income to pay in installment of your pile debt. Do not let this happen!

4. Non mortgage debt service ratio compares the total annual income of the entire loan payments a year outside the home mortgage loan or mortgage. Level ratio 15% or fewer is voted still in reasonable threshold, while the ratio of 30% means that the position of non mortgage is too high. If the ratio is more than that means you have to spend more than 15% of income for its consumer debt.