Understanding personal finances can feel daunting. There are a lot of terms that might not make sense and are easy to mix up, and there can even be complicated math. At OneMain Financial we realize not everyone is a financial expert, and we don’t think you have to be. That being said, no one can ignore money altogether because our own financial picture impacts our lives every day. 

We like to think it’s called personal finance for a reason — what you really need to know is you. 

Your income

You likely know your annual salary or hourly rate off the top of your head, but the more important number is what you bring home in each paycheck. Remember: employers take out taxes and often other money for benefits, like health insurance, as well. If you get a standard paycheck every week or two, add them up to tally your monthly pay. If your paychecks vary because of hours or commission, or you also get tips, try adding together a few months and figuring out the average.

Your bills

“[Y]ou should know your money — how much you bring in, how much you pay out, and how much you owe.”

As much as we might want to avoid them, it’s important to open all of your bills. Know the exact price of things that stay the same each month, like housing costs, car payments and cellphone bills. You also want to have an idea of what you pay in varying expenses each month, such as food, utilities, or gas for your car. Don’t forget to add monthly payments on any loans or credit cards.    

Your debt

Most people have a few kinds of debt such as car loans, credit cards and student loans. Know what you owe and the interest rates you’re paying for each debt. You don’t have to become an expert on annual percentage rates (APR), but knowing the rates you pay will help you understand whether you’re getting a good deal, or if a new credit card, or even a personal loan for debt consolidation, could save you money.    

Your credit score

Everybody wants to know your credit score. It’s not just mortgage lenders, credit card companies or car dealerships anymore. Your landlord, insurance company and even your future employer may look at it. You need to look too. Start by ordering your free credit report from one or more of the credit bureaus. It will have your score and the information they used to calculate it, like your credit card accounts and balances.

Unless you have hours to kill or miss high school math, you don’t need to be able to calculate compound interest in your head. Most people will never be called upon to remember the difference between net and gross income. But you should know your money — how much you bring in, how much you pay out, and how much you owe. This can help you pay your bills on time, find better credit or loan offers and reach personal financial goals, such as getting out of debt, buying a new car or increasing your savings.