In Budgeting, Discussions, For Beginners, Money, Wealth

What’s your Personal Finance (PF) score and how do you calculate it?

This is a new way to score:

The new score that I’m proposing is called the PF Score, or Personal Finance Score.

This is measured by taking the ratio of your net worth and dividing it by your annual expenses.

So if you have a net worth of $100,000 and your annual expenses are $25,000, your score is 4.

Alternatively you can have a negative score if you have a negative net worth, someone who owes more to others than the cumulative total of all their personal assets.



Your net worth divided by your annual expenses

Simple enough, no?


Your net worth is how much you own minus how much you owe.

If you have $10,000 in the bank and owe $15,000 your net worth is -$5,000

$10,000$15,000 = – $5000

You can see my net worth over the years as an example; I track it monthly and yearly.

It sort of looks like this:


Depends! You tell me.

You should have a budget or at least a rough idea from tracking your expenses how much you spend each year.


My 2012 year-end budget roundup:

2012 NET WORTH = $200,145

2012 ANNUAL EXPENSES = $52,043

$200,145 / $52,043 = 3.84

Ouch! Although this was the year I moved to the U.S. and back.

MY 2013 PF SCORE = 5.606

My 2013 year-end budget roundup:

2013 NET WORTH = $217,275

2013 ANNUAL EXPENSES = $38,756

$217,275 / $38,756 = 5.606

Hey, at least the score is rising!


Let’s assume:

2014 PROPOSED NET WORTH = $217,000


$217,000 / $20,000 = 10.85

I am really trying this year even taking into account Baby Bun. If I can go from $52,000 down to $39,000, I can go from $39,000 to $20,000. This is my logic.

Naturally, if I can also increase my net worth while sticking to $20,000 in expenses .. I will be over the moon.


So now that you have your number, what does it all mean?

jly224 says:

  • Anything in the negatives: You need to get out of debt now.
  • Score of 1: You have enough for one year’s worth of expenses.
  • Score of 5: You are picking up steam.
  • Score of 10: Getting better.
  • Score of 25: You are financially independent!!
  • Score of 30: Your investments are making more than you spend.
  • Anything above 30: Sit back and relax, you’re golden!


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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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  1. Katie

    Hey there! Thanks for such an interesting metric! I’m currently at a score of .33, with a highest of .5 back in June. What I wonder is, should we include things like investments? Or just base expenses? I can understand using either way. When I’m retired or have reached financial independence, I probably won’t have the investment costs anymore (ideally, but I enjoy it so who knows). But, based on current situation, investing would count as an expense and it isn’t something that I would want to sacrifice if I lost my job… Either way, I think I’ll continue to track it to see where I’m at.

    1. save. spend. splurge.

      Just base expenses. What you spend, not what you invest in (which is savings)… 🙂

  2. nicoleandmaggie

    I assume this does not include taxes?

    1. save. spend. splurge.

      Well I used net income I think but if you want, you could differentiate between the two

  3. Setting Saving Goals

    Great read and one must simply share this with their partners where the better half is a spender and not a saver. The economic environment across Australia and worldwide is changing so much that setting goals for a better financial future is key.

  4. LAL

    With mortgage and current burn rate I have a PF number of 14.5. If I got rid of the mortgage and moved and bought a different home my PF number would be 24.4

    1. save. spend. splurge.

      @LAL: You have NOTHING to worry about!

  5. Chris Grande

    cool stuff! We are at ~11-12; with a goal which works out to being about 20 in 2 years. Though we do want to spend more so those numbers might adjust a bit

    1. save. spend. splurge.

      @Chris Grande: For me it isn’t the be-all and end-all in terms of numbers but it’s a nice gauge to use.

  6. SarahN

    INteresting (and still no post emails!?!? Are you semi through wordpress?)

    So would I take a projected price on my home into the net worth, like Cassie does, or have a -ve net worth as I have a debt?! Tough one, as markets can drop and all…

    1. save. spend. splurge.

      @SarahN: I am through self-hosted WordPress.. did you use the newsletter sign up above the comments? The link is here:

      Personally I’d take the projected price on your property. A realistic one 🙂

  7. Cassie

    I like this concept! I don’t have a solid number on what I spent last year, so I can’t calculate an exact PF number yet (I’ll be able to this year!). If I was to ballpark it, I’d say my PF number is sitting somewhere between 2.5 and 3. If I could hit 4.5 for 2014 I’ll be stoked 😀

    1. save. spend. splurge.

      @Cassie: The higher the number goes, the more motivated I can get!

  8. Stephanie

    Right now, I’m just over 2. Pretty good for a grad student!

    This is indeed a much better measure than net worth. The only flaw I see is that almost anyone who takes out a mortgage is headed straight to the negatives (and then told to take up more jobs) while mortgages seem to be “considered separately” from other kinds of debt (credit card debt) in our society’s financial system – taking out a mortgage is usually not “bad”, like getting into credit card debt. Whether mortgages should be considered separately the way it is right now is not something I can really comment on, though.

    1. save. spend. splurge.

      @Stephanie: I personally wouldn’t consider mortgages separately.. it’s still a debt to me, and it still has an expense associated to it. Even though it is “good” debt, it’s still a debt.

      I think using BOTH numbers works — net worth and then your PF score.

  9. Fig

    Mine isn’t good now but I think this is a pretty decent scoring system! I might blog about this soon. 🙂

    1. save. spend. splurge.

      @Fig: I’d love to see your number 🙂

  10. Alicia @ Financial Diffraction

    I said it over on J$’s post, but I’m a little negative. There’s only up! 🙂

    1. save. spend. splurge.

      @Alicia @ Financial Diffraction: I find this number more motivating than net worth to be honest.

  11. Anne @ Unique Gifter

    My super rough math says we’re around 8.5 right now and I think we’ll be around 9.5 by the end of the year, as long as all goes to plan.

    1. save. spend. splurge.

      @Anne @ Unique Gifter: The higher the better. My goal is now to reach 25 if I can 😀

  12. J. Money

    Glad you liked it 🙂

  13. Dear Debt

    I need to get out of debt! Working on it 🙂 This seems to make more sense to me than the credit score.

    1. save. spend. splurge.

      @Dear Debt: Ditto. Credit scores are really just for companies to see who they can make the most profit off from. The ones who only pay minimum balances have high credit scores versus people like me with $0 in debt and never carry a balance.

  14. jane savers @ solving the money puzzle

    Of course I have a negative number. I have debt. I can probably become a 1 in 2015 but I can’t see myself ever being more than a 10. (I had my calculator out trying all sorts of scenarios).

    This is a good gauge of financial fitness. I hope it catches on.

    1. save. spend. splurge.

      @jane savers @ solving the money puzzle: That and net worth are great, fast indicators of where you stand in your personal journey.

  15. moneystepper

    Great idea.

    I’m currently in a very similar position to you, with a score of 5.11.

    The score doesn’t really work for negatives though.

    If you have net wealth of -$100k and expenses of $10k, your score is -10.
    If you have net wealth of -$50k and expenses of $10k, your score is -5, which suggest you are in a better position, which you are.

    However, if your net wealth was -$100k and your expenses were $20k, your score would be -5, which would suggest you are in a better position than the first example which isn’t true.

    That said, I really like the idea of scoring your PF rating like this.

    1. save. spend. splurge.

      @moneystepper: Could argue that technically you are in a better position with a net worth that is -$50,000 rather than -$100,000 however. You’re basically $50,000 “richer”, or less in debt.

      And if your net worth was -$50k and your expenses were $20k, your number would be -2.5 which is far better than -5.

      Looks fine to me….

      1. moneystepper

        @save. spend. splurge.: I agree with those two examples.

        But, you’re net wealth is -$100k. All I have to do to improve my PF score is increase my expenses from $10k (PF score of -10) to $200k (PF score of -0.5).

        I love the concept, I’m just worried that it may be misleading for people in debt (those who probably are most in need of calculating and understanding their PF score).

  16. her every cent counts

    Love it! I don’t want to know what mine is though… I spend too much! 🙂

    1. save. spend. splurge.

      @her every cent counts: Even if you just figure it out once, it can be a good motivator. I want my number to be higher now!


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