Created
Feb 6, 2026 1:42 PM
Tags
Liquidity Ratio = Short-term liquid assets / Monthly Expenses
Example 10,000/2,500 = Liquidity Ratio of 4
50/30/20 Rule
50% goes to your needs: Rent, mortgage, utilities, groceries, transportation, and inusrance.
30% goes to your wants: Dining out, hobbies, streaming subscriptions, vacations.
20% goes to savings/debt repayment: Emergency fund, investing in retirement accounts, or paying off debt.
Debt Service-to-Income (DTI) Ratio = Total monthly debt payments / gross monthly income
