Financial planning: the minimum you should know

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.



The less you save, the longer you work, the more stressful your life.

  1. 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.
  2. Paying down debt is a form of savings.
  3. Your employer match (if any) counts too.
    • Not familiar with your employer match? Visit with you human resources department or I can guide you.
  4. Your bill payment and savings should be automated.


Checking / Savings

  1. Keep 2-4 month's cash reserve in a checking account
  2. Most people don't need a savings account.
    • Learn more why in my plan.



Great credit is a valuable asset.

  1. You should monitor your credit.
  2. Strive for a perfect credit score.
  3. 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.



  1. The decisions you make with debt will be among the most important in your financial life.
  2. Get rid of bad debt.
  3. Keep and use low-cost debt as a tool while building wealth. Note the low-cost emphasis.



There are simple, low cost approaches to investing.

  1. 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.
  2. Do not try to trade stocks. The data is against you.



Insurance is for you to partially protect from bad things.

  1. You need health insurance, car insurance, home or renter's insurance, and a personal liability umbrella policy.
  2. Consider having a $1,000 to $5,000 deductible on most policies.
  3. You should consider term life insurance with a 10 to 30 year term for 5x to 20x your annual income.



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.



You must cover the basics.

  1. You must have a Will, Living Will, and Healthcare Power of Attorney. These should be updated every 3 to 7 years.
  2. If you are getting married, get a prenup.


Cyber security

Essential to proactively protect yourself.

  1. You need password protection
  2. You need credit monitoring
  3. You need an organized view of your financial picture with alerts.



Get the advice you need. Only pay when you need it.

  1. Update your plan quarterly.
  2. Consider getting personal advice less frequently. Once a year should be plenty.
  3. Always get advice before making a major financial decision.
  4. Get advice during every major life event.
  5. When in doubt, get advice from a fee-for service expert. They can help you think through complex decisions.


How may I help you?




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