Understanding your cash burn rate is crucial for financial health. It compares your spending to your earnings. If your burn rate is over 100%, you’re spending more than you make. Nearly half of Americans fall into this category, resulting in shrinking savings, growing debt, and reliance on borrowing. Calculate your rate to make necessary adjustments. Aim for a rate of 80% or lower to improve financial security. Review spending habits, cut unnecessary expenses, and increase income to lower your burn rate.

Read more at Yahoo Finance: Do you know your cash burn rate? Here’s why it matters.