You should get a free financial plan But I get it, it is not for everyone. You could explore my articles, starting with the importance of setting your goals. However, if what you are looking for is a really quick overview, here it is. This is primarily designed for working households with incomes over $75,000.
Budget
The less you save, the longer you work, the more stressful your life.
- You should save between 10% and 30% of your income.
- 20% is perfect. You should enjoy the rest.
- If you aren't saving at that rate now, get there over 3 to 5 years, increasing your savings gradually each year.
- Paying down debt is a form of savings.
- Your employer match (if any) counts too.
- Not familiar with your employer match? Visit with you human resources department or I can guide you.
- Not familiar with your employer match? Visit with you human resources department or I can guide you.
- Your bill payment and savings should be automated.
Checking / Savings
- Keep 2-4 month's cash reserve in a checking account
- Most people don't need a savings account.
- Learn more why in my plan.
Credit
Great credit is a valuable asset.
- You should monitor your credit.
- Strive for a perfect credit score.
- You should use a credit card and pay it off every month.
- Try to keep the same card for several years.
- Two cards is good; you don't need more.
Debt
- The decisions you make with debt will be among the most important in your financial life.
- Get rid of bad debt.
- Keep and use low-cost debt as a tool while building wealth. Note the low-cost emphasis.
Investing
There are simple, low cost approaches to investing.
- Do not "put all of your money in the S&P 500 index". That is not what portfolio theory or the experts say. However, you should use low cost index funds for at least a portion of your portfolio.
- Do not try to trade stocks. The data is against you.
Insurance
Insurance is for you to partially protect from bad things.
- You need health insurance, car insurance, home or renter's insurance, and a personal liability umbrella policy.
- Consider having a $1,000 to $5,000 deductible on most policies.
- You should consider term life insurance with a 10 to 30 year term for 5x to 20x your annual income.
Housing
The key to feeling wealthy is to live in a less expensive house than you can otherwise afford. If you will be in a home for less than 5 years, renting is typically better than buying.
Legal
You must cover the basics.
- You must have a Will, Living Will, and Healthcare Power of Attorney. These should be updated every 3 to 7 years.
- If you are getting married, get a prenup.
Cyber security
Essential to proactively protect yourself.
- You need password protection
- You need credit monitoring
- You need an organized view of your financial picture with alerts.
Advice
Get the advice you need. Only pay when you need it.
- Update your plan quarterly.
- Consider getting personal advice less frequently. Once a year should be plenty.
- Always get advice before making a major financial decision.
- Get advice during every major life event.
- When in doubt, get advice from a fee-for service expert. They can help you think through complex decisions.
How may I help you?