Overview of the Financial Wellbeing Calculator

The Financial Wellbeing Calculator is designed to evaluate your financial health and provide personalized recommendations for improvement. It takes into account key financial factors like income, expenses, debt, and savings to generate a comprehensive financial wellbeing score.

User Inputs

Enter your financial information in the following categories:
• Average Monthly Income: Your average income per month
• Total Monthly Fixed Expenses: All your fixed monthly expenses, such as rent, utilities, and insurance
• Total Monthly Debt Payments: The total amount you pay towards debts each month.
• Total Monthly Savings: The amount you save every month
• What is your financial goal: pick your financial goals
  1. Saving for Retirement
  2. Buying a Home
  3. Building an Emergency Fund
  4. Paying Off Debt
  5. Saving for Education
  6. Investing for Growth
• Total Amount Saved toward Financial Goals: The total amount saved for specific financial goals, like buying a house or retirement
• Total Target Amount for Financial Goals: The total amount you aim to achieve for all your financial goals

Calculations and Score Bands

The calculator will process the data you entered to generate scores in the following categories:
• Financial Wellbeing Score (FWS):
  1. 0-39: Critical: Recommendation: Engage with a financial advisor to develop a comprehensive plan for reducing debt and managing expenses. Prioritize creating a budget and identifying immediate areas for cost-cutting
  2. 40-59: Needs Improvement: Recommendation: Focus on increasing your savings and accelerating progress towards your financial goals. If your debt management based on detailed analysis is in good shape, redirecting more of your income towards savings and investments will significantly improve your overall financial wellbeing. Consider automating your savings contributions and revisiting your budget to identify areas where you can cut expenses and allocate more towards your financial goals.
  3. 60-79: Fair: Recommendation: Continue monitoring your finances, with an emphasis on optimizing expense management. Look into diversified investment opportunities that align with your financial goals
  4. 80-99: Good: Recommendation: Sustain current financial practices, and explore options to increase savings and investments. Periodically review your long-term financial goals to ensure they remain aligned with your life plans
  5. 100: Excellent: Recommendation: Maintain and fine-tune your financial strategies. Consider advanced investment opportunities, such as real estate or stock market investments, and ensure your estate planning is up to date
• Income Stability Score (ISS)
  1. 0-39: Unstable: Recommendation: Focus on diversifying income streams. If possible, take on additional freelance work or part-time employment. Simultaneously, build an emergency fund to cover at least three to six months of expenses
  2. 40-59: Needs Improvement: Recommendation: Work on increasing your income, possibly through side gigs or upskilling to advance your career. Concurrently, focus on reducing expenses and building a robust emergency fund.
  3. 60-79: Stable: Recommendation: Continue monitoring your income and expenses closely. Optimize your budget and consider setting aside funds for investments that could yield long-term financial stability.
  4. 80-99: Very Stable: Recommendation: Keep up your current income and expense management strategies. Consider increasing your savings rate and investments to further secure your financial future.
  5. 100: Extremely Stable: Recommendation: Maintain and optimize your income and expenses. This is an excellent time to explore advanced investment strategies, such as real estate or index funds, to diversify your income further
• Expense Management Score (EMS)
  1. 0-39: Poor: Recommendation: Develop a strict budget to manage your expenses. Begin tracking your spending meticulously to identify areas where you can cut costs. Reduce or eliminate unnecessary expenses immediately
  2. 40-59: Needs Improvement: Recommendation: Focus on optimizing your budget by identifying and cutting back on discretionary spending. Increase savings by automating your finances and directing excess funds toward your savings goals.
  3. 60-79: Fair: Recommendation: Keep monitoring your expenses and seek opportunities to optimize your budget. Consider cost-saving measures like negotiating bills or switching to lower-cost service providers
  4. 80-99: Good: Recommendation: Maintain your current expense management strategies. Explore opportunities to increase savings and possibly shift some funds toward long-term investments
  5. 100: Excellent: Recommendation: Continue fine-tuning your budget. You may want to explore advanced budgeting strategies, such as zero-based budgeting, to maximize efficiency and savings
• Debt-to-Income Ratio Score (DIRS)
  1. 0-39: High Risk: Recommendation: Engage with a financial advisor to tackle debt aggressively. Consider strategies such as the debt snowball or debt avalanche methods to systematically reduce your debt load.
  2. 40-59: Needs Improvement: Recommendation: Prioritize paying down debt, especially high-interest debts. Increasing your income or reallocating your budget to free up more funds for debt repayment can also be beneficial
  3. 60-79: Fair: Recommendation: Continue monitoring your debt levels and income. Look into debt consolidation options that could help streamline payments and possibly lower interest rates.
  4. 80-99: Good: Recommendation: Maintain your current debt management practices. Consider allocating additional funds toward investments or savings, now that your debt is well-managed.
  5. 100: Excellent: Recommendation: Keep optimizing your debt management strategy. This might be an excellent time to explore more sophisticated financial strategies, such as leveraging low-interest debt for investments
• Savings Rate Score (SRS)
  1. 0-39: Poor: Recommendation: Establish a disciplined savings plan immediately. Automate your savings to ensure consistency, and cut back on unnecessary expenses to free up more funds for saving.
  2. 40-59: Needs Improvement: Recommendation: Increase your savings rate by optimizing your budget and redirecting excess funds into your savings accounts. Consider setting specific savings goals to keep you motivated
  3. 60-79: Fair: Recommendation: Monitor your savings regularly and look for opportunities to increase your contributions. Explore long-term savings options like retirement accounts or investment funds.
  4. 80-99: Good: Recommendation: Keep up your savings habits, and consider increasing your contributions to take full advantage of compounding interest. Review your long-term financial goals to ensure your savings align with them
  5. 100: Excellent: Recommendation: Continue optimizing your savings strategy. This is a great time to explore advanced savings options, such as high-yield savings accounts or low-risk investment portfolios.
• Progress toward Financial Goals Score (PFGS)
  1. 0-39: Off Track: Recommendation: Reassess your financial goals with a financial advisor. Develop a clear plan to get back on track, focusing on realistic timelines and prioritized savings strategies
  2. 40-59: Needs Improvement: Recommendation: Develop a detailed plan to reach your financial goals, and increase your savings efforts. Optimizing your expenses can free up more funds to direct toward your goals.
  3. 60-79: On Track: Recommendation: Continue monitoring your progress closely, and seek opportunities to accelerate your progress through increased savings or additional income sources
  4. 80-99: Ahead of Schedule: Recommendation: Maintain your current approach. With your financial goals in sight, consider exploring investment opportunities or reallocating funds to new, ambitious financial goals
  5. 100: Achieved: Recommendation: Celebrate your success! Review your long-term financial goals, and consider advanced strategies like estate planning or setting new financial targets to keep your momentum going

Appendix: Formulas

• Financial Wellbeing Score (FWS) = (ISS + EMS + DIRS + SRS + PFGS) / 5
• Income Stability Score (ISS) = ((Total Monthly Income - Total Monthly Fixed Expenses) / Total Monthly Income) * 100
• Expense Management Score (EMS) = (Total Monthly Fixed Expenses / Total Monthly Income) * 100
• Debt-to-Income Ratio Score (DIRS) = (1 - (Total Monthly Debt Payments / Total Monthly Income)) * 100
• Savings Rate Score (SRS) = (Total Monthly Savings / Total Monthly Income) * 100
• Progress toward Financial Goals Score (PFGS) = (Total Amount Saved toward Financial Goals / Total Target Amount for Financial Goals) * 100