Check the 3 Dimensions of Financial Health
Then Get Your Finances Squared Away
- Manage Everyday Money
- Making Ends Meet & Establishing Emergency Funds
- Protect Your Family
- Medical, Life, & Disability Insurance
- Build a Better Tomorrow
- Retirement, College, & Housing
Get rule-of-thumb estimates for what you need to be OK, then decide you’re “OK,” “Not Sure,” or ”Not OK.”
Get an overview showing where you’re “OK,” “Not Sure,” or ”Not OK.”
Then check out those areas where you’re “Not Sure” and square away those areas where you’re “Not OK.”
Get the Help You Need
Then Make a Plan & Get It Done
TO MANAGE EVERYDAY MONEY. The first task in any financial plan.
[ ] To put you in control, use How to Manage Everyday Spending
[ ] To get out from under debt, use How to Pay Down Debt.
[ ] Use Figure Out a Reserve for Unemployment for a better estimate.
TO PROTECT YOUR FAMILY. Life’s full of unpleasant surprises.
[ ] To learn more, use Learn About Medical Insurance.
[ ] Use Figure Out How Much Life Insurance You Need for a better estimate.
TO BUILD A BETTER TOMORROW. Make a plan for what’s coming next.
[ ] For retirement, if under 50 use Figure Out a Retirement Plan (if under 50).
[ ] If over 50 use Figure Out a Retirement Plan (if 50 or over)
[ ] If thinking of moving, use Figure Out How Moving Changes Your Finances.
[ ] To see if refinancing makes sense, use Figure Out “If You Refinance …”
NEED SOMETHING ELSE? Then check out our topic pages:
NOW GET IT DONE. Nothing happens unless you make it happen.
- Print out this checklist & set your priorities. Put what’s urgent at the top of the list, then what’s big or what you can do quickly.
- Make an action plan. Schedule when you’ll get things done. Put reminders in your calendar, enlist a coach, and monitor your progress to stay on-track.
- Then do it. You’ll be done before you know it and have the peace of mind that comes from having your finances squared away.
Quick Estimate Assumptions
- The amount estimated is the amount needed should the higher earner be unemployed for 9 months and collecting unemployment benefits, and you family cuts its spending 10%.
- The estimated amount is the amount needed to maintain your family’s standard of living from now to retirement, assuming your family will need 70 percent of you current income, as there will be one less mouth to feed, with the proceeds held in save investments with an interest rate equal to the rate of inflation.
- Retirement age is for you, with a spouse or partner retiring at the same time.
- Retirement savings assumed to be held in a tax-advantaged IRA or 401(k) account and invested in an age-appropriate low-cost Target Date Fund, charging fees of 0.25%.
- Earnings projected to rise 1) 0.5% a year prior to age 26; ii) in line with the wage scale relative to national average wages (AWI) published by the Social Security Administration from age 26 to age 50, with average wages rising 0.5% a year; and iii) in line with inflation from age 50 to retirement.
- Target retirement income equals 75% of projected income in your 50s, adjusted for saving more or less than 6% of income for retirement (not including employer contributions).
- Target income from savings is equal to target retirement income less projected Social Security benefits. Target savings at retirement is equal to 25 times target retirement income from savings – assuming 4% of savings at retirement are drawn out and used as income.
Paying for College
- Saving to pay tuition, fees, room, and board. The current annual costs, taken from The College Board’s Trends in Higher Education Table 1a, are $39,520 for a private college, $17,860 for an in-state public college, and $10,550 for a public 2-year college. Costs assumed to rise 5.5% a year, or 3% a year above inflation at 2.5% a year.
- Kids are assumed to be 2 years apart, start college at age 18, and take 4 years to graduate from 4-year schools, 2 years from a 2-year school.
- College savings savings are assumed to be held in a tax-advantaged Roth IRA or 529 Plan, invested in a low-cost mutual fund invested 50% in stocks and 50% in bonds. The fund is assumed to earn 6.8% a year net of fees of 0.25%, or 4.3% above inflation at 2.5%.