Formula: current ratio = current assets/monthly expenditure

Liquidity assets refer to assets that can be quickly realized without loss when in urgent need, such as cash, demand deposits, money funds, etc. This ratio is used to weigh the financial situation and liquidity of your family. The phenomenon of high turnover rate should be avoided as far as possible. If the family income is stable, the ratio is 3; If the household income is unstable, the ratio should be between 6 and 8.

2. The debt-to-income ratio should be 30%.

Formula: debt-to-income ratio = household debt expenditure/current month's income.

The percentage of the family's expenditure on repaying various debts to the total income of the family in the current month should be 30%. If the debt ratio is too high, which exceeds the family's affordability, then the monthly interest expenses will rise. Once the family meets financial emergencies, such as unemployment and large medical expenses, it will cause economic burden or even "insolvency". The smaller the ratio, the better. From this concept, it is also an ability to use other people's funds appropriately to develop wealth.

3. The higher the surplus ratio, the better.

Formula: surplus ratio = (current month income-current month expenditure)/current month total income (after tax) surplus.

This indicator reflects your ability to grasp household expenses and increase your net assets. The larger the value, the better the family's financial situation, and the more opportunities for family investment and cash flow.

4. The investment ratio should preferably exceed 50%.

Formula: investment ratio = investment assets/net assets.

This indicator reflects your family's ability to increase wealth and achieve goals through investment. It is generally believed that the proportion of investment in net assets should be above 50%. Whether the family will become poor or rich in the future is clear at a glance.

5. The ratio of liabilities to total assets should be less than 50%.

Formula: ratio of liabilities to total assets = liabilities/total assets

This indicator reflects the comprehensive solvency of families. If the result is less than 50%, it means that the household debt ratio is appropriate; If it exceeds 50%, the family may have a financial crisis.

Expanding data to formulate family fund financial planning principle 1: matching income and risk

Investment and risk are matched. High income and high risk, low income and low risk, we must control the risk within an acceptable range, so as to set an ideal income target.

Principle 2 of making family financial planning: live within our means and do what we can.

Financial planning should comprehensively consider your short-term and long-term living arrangements, reasonably consider realistic affordability and future expected goals, and don't blindly set too high financial planning.

Principle 3: Do your homework and don't invest blindly.

Investment and financial management is a highly specialized course, which needs some time to learn and understand. There will be no pie in the sky, only pay will be rewarded.

Principles of making family fund financial planning: 4. Control desire, not greed.

Always set targets and limits, whether it is profit targets or stop-loss targets, and resolutely set them to avoid the evil consequences brought by greed.

Baidu Encyclopedia-Family Trust