3 metrics that can help people gauge their financial health
Monitoring financial health is a short-term strategy that can keep individuals on a path toward long-term security. While various metrics can be looked to as indicators of financial health, adults can keep these three variables in mind as they look to utilize short-term strategies to ensure their long-term success.
1.Debt-to-income ratio:
Debt-to-income ratio can be a good indicator of financial health. The Consumer Financial Protection Bureau defines debt-to-income ratio (DTI) as all your monthly debt payments divided by your monthly gross income. Lenders utilize DTI to determine the creditworthiness of loan applicants, but individuals also can use it as a metric to gauge their financial health. Monthly debt payments include mortgages, auto loans, student loans, and other debt payments, including credit cards. Individuals whose debt payments total $2,000 per month and who earn a gross
monthly income of $6,000 have a 33 percent DTI. The credit experts at Experian suggest a DTI of 35 percent or less is indicative that debt is being handled well, so that’s a figure to keep in mind.
2.Savings
balances: Savings accounts don’t generate as much interest as they did throughout the 1980s and 1990s. According to Nasdaq, savings interest rates climbed as high as 8 percent in the 1980s, but have fallen below 0.25 percent since the financial crisis of 2008. That’s led some to devalue savings, but savings balances can be a good indicator of financial health. A substantial savings account can help individuals avoid taking on debt when costly emergencies and expenses arise unexpectedly, thus helping them keep their DTI in a financially advantageous range.
3.Credit
score: Credit score is another strong, and easily accessible, indicator of personal financial
health. Individuals can now access their credit scores for free each month through their banks and credit card providers. Experian notes that credit scores range from 300 to 850, and where a score falls in that range can indicate if a person is managing credit in a healthy or unhealthy way. Experian reports scores 740 and above are very good, while scores between 670 and 739 are considered good. Scores between 300 and 579 are considered poor, while a
score between 580 and 669 is considered fair. Scores below 669 indicate there’s room to use credit more wisely, which involve reducing reliance on consumer credit, making payments on time and ensuring payments are more than the monthly minimum.
These three metrics and others can be utilized by individuals looking to gauge their financial health in an effort to realize their short- and longterm goals.
MM25C385
Benjamin F. Edwards
1701 4th St #101
Peru, IL 61354 (815) 220-0588 benjaminfedwards.com
First State Bank
Mendota (815) 538-2265
McNabb (815) 882-2146
Peru (815) 224-4484
Ottawa (815) 433-3727
Princeton (815) 872-0002 LaMoille (815) 638-2398 www.firststatebank.biz
First State Insurance
715 Washington St. Mendota, IL 61342 (815) 539-5651
114 W Railroad St. Earlville, IL 60518 (815) 246-8261
Hometown National Bank
Member FDIC
260 Bucklin St, La Salle, IL 61301 (815) 223-7300 myhtnb.bank
Peru Waltham Insurance
1724 Peoria St. Peru, IL 61354 (815) 223-4414 www.perumutual.com
Raymond James Financial Services
James Spelich
1206 Shooting Park Rd. Peru, IL 61354 (815) 223-1891 www.raymondjames.com
State Farm – Cody Burroughs
313 S Spalding St. Spring Valley, IL 61362 (815) 664-5302
362 3rd St. La Salle, IL 61301 (815) 223-1059
State Farm – Kurt Bruno
1103 Main St. Mendota, IL 61342 (815) 539-3878
State Farm – Lori Janko-Wilke
2025 Rock St. Peru, IL 61354 (815) 223-2118
State Farm – Jessica Strauch
1631 4th St. Peru, IL 61354 (815) 223-1900
Wayland Financial Group
128 Bucklin St. LaSalle, IL 61301 (815) 224-1889
Weber Accounting & Investment Services
4110 Progress Boulevard 1B Peru, IL 61354 (815) 223-5606
Witek Wealth Management
613 1st St. LaSalle, IL 61301 (815) 223-3332 witekwealthmanagement.com
A consumer’s guide to auto insurance
Navigating the basics of auto insurance can be a little tricky, but consumers can use this guide to gain a greater understanding of their policies and coverage.
LIABILITY COVERAGE
Most states and provinces require drivers to have liability insurance. This is the most basic coverage to legally drive a car. The Insurance Information Institute says liability insurance pays the other driver’s medical, car repair and additional costs when the policyholder is at fault in an auto accident. Bodily injury liability, which applies to injuries that the policyholder and family members listed on the policy cause to someone else, is included in liability insurance. Policyholders can purchase more than the minimum required. Property damage liability pays for damage a driver
may cause to someone else’s property, such as vehicles, lamp posts, fences, buildings, or structures.
COLLISION COVERAGE
Collision coverage pays for damage from a collision with another car, an object or a pothole, or from flipping over, says the National Association of Insurance Commissioners.
COMPREHENSIVE COVERAGE
This coverage will reimburse a policyholder for damage to the vehicle that’s not caused by a collision. This can include weather, fire, flooding, and hitting an animal.
PERSONAL INJURY PROTECTION (PIP)
The III indicates this coverage pays for the treatment of injuries to the driver and passengers. PIP can cover medical payments, lost wages, and
Hey! You can see your company’s future from here.
As a growing business you may be looking for ways to gain an advantage. That’s where Wayland Financial Group can help. For over 10 years, we’ve been helping businesses of all sizes reach the next level. From medical and life insurance to employee stock plans and comprehensive retirement solutions, we’ll help you put together a benefits package that is tailored to your needs. And we’ll give you a level of personal attention that you deserve. After all, we figure you can use every edge you can get.
the cost of replacing services normally performed by the person who was injured in the auto accident. PIP may cover funeral costs in some cases.
UNINSURED AND UNDERINSURED MOTORIST COVERAGE
This coverage offers protection to policyholders who get in an accident with a driver who doesn’t have insurance or has insufficient coverage to fully cover the costs of the accident, says Investopedia.
PREMIUMS AND DEDUCTIBLES
A premium is the total
amount paid for the policy. It is determined by the coverages, policy holder’s age and driving history, and a number of other factors.
Insurance policies typically have deductibles associated with them. This is the amount a policyholder has to pay out of pocket before the insurance kicks in and pays out. A higher deductible often means a lower premium.
Automotive insurance is needed to operate a vehicle, but costs will vary depending on the coverage.
SC253693
Life insurance products to consider
Life insurance policies are not all the same, and generally are categorized as term life insurance and permanent life insurance. With term life insurance, a person gets coverage for a defined length of time. If the insured dies during that time, money is paid to the person’s beneficiaries. When the term expires, no money is paid out and the person must get new coverage or go without life insurance. With a permanent life insurance policy, the coverage is lifelong and also includes a “cash value” component that can help with other financial objectives, such as saving for retirement. A deep dive into life insurance can help consumers determine which policy is best for them.
TERM LIFE INSURANCE
This type of policy is sold in periods of one, five, 10, 15, 20, 25, or 30 years. Coverage amounts vary and people buy term life insurance for a length long enough to cover their prime working years, ac-
cording to NerdWallet. This is often the least expensive life insurance product, but if a person outlives the policy, beneficiaries won’t receive a payout.
PERMANENT LIFE INSURANCE
Permanent life insurance is designed to cover a person’s entire life. The cash value component grows over time and can be borrowed against to pay for various needs. There are specific types of permanent life insurance.
• Whole life insurance: Whole life insurance will last a person’s entire life if premiums are maintained. In general, premiums stay the same and the insured gets the guaranteed rate of return on the policy’s cash value. The death benefit also will not change. Premiums are more expensive than term life, so this is best for people who want a basic permanent policy who can afford the higher premiums.
• Universal life insurance: This coverage is cheaper than
whole life insurance, but still more expensive than term life. With this type of policy, the insured can raise or lower the amount they pay within the limits of the policy. However, premiums typically increase over time, and individuals may subtract these increased costs against their cash value account component or death benefit. That cash value component grows based on market interest rates, says NerdWallet, and is not guaranteed.
• Variable universal life insurance: This type of insurance allows the cash value component to be invested in stocks, bonds and other investment products. Premiums are flexible, but a higher risk tolerance is necessary. While there is potential for greater growth, there also is the risk that comes with investing these funds, says Guardian.
• Indexed universal life insurance: Balancing risk with reward, an indexed universal life insurance policy can have
the cash value growth linked to the performance of a stock market index like the S&P 500. Guardian says these policies use downside protection and upside caps. This means that during a bad market year, the insured’s cash value will not decline, but in a good year, the cash value won’t grow as much as the index itself. This policy is good for people who want to invest their money but risk little.
• Burial/final expense insurance: This is a very small policy designed to cover the costs of final expenses, but may not qualify for other life insurance. The death benefit is guaranteed but is often limited to between $5,000 and $25,000. Since a medical exam is not needed, it is an option for seniors and those with preexisting conditions. Individuals can explore various life insurance policy options to provide peace of mind that beneficiaries are provided for in the event of their death.
MM25C411
